Small and medium-sized enterprises (SMEs) have to pay by Telegraphic Transfer, whether they import goods from Japan, South Korea, even the United States, and Europe, or pay business service fees. However, for the first time users of Telegraphic Transfer, there will be many difficulties. This article answers all the remittance questions for you so that you can use the overseas wire transfer service more easily. At the same time, compare the wire transfer alternatives on the market to see which is more flexible. Read the full text immediately to learn more!
- What is Telegraphic Transfer?
- What is the process of applying for Telegraphic Transfer?
- How long does it take for the Telegraphic Transfer to arrive?
- Telegraphic Transfer service charge
- Who pays for the Telegraphic Transfer?
- How to inquire about the exchange rate of foreign currency Telegraphic Transfer?
- Telegraphic Transfer vs. Reap: which service charge is better?
Telegraphic Transfer, also known as T/T, is a kind of remittance method in which banks transfer money directly to branches in multiple destinations around the world by telegraph or telex. Different from general transfers, Telegraphic Transfer is mainly aimed at payments of funds from other places. Telegraphic Transfer can do this no matter where the payee is, whether that be mainland China, Japan, South Korea, or even as far away as the United States and Europe. However, most ordinary transfers are local transfers.
When conducting Telegraphic Transfer at a bank, it is generally necessary to provide basic information, such as the account number of the remittance, the currency and amount of the transfer, and the account number of the payee. Taking Hang Seng Bank as an example, customers can submit remittance applications at one of their branches or through personal e-banking. If a Telegraphic Transfer is made through online banking, the “designated remittance payee” shall be registered as an overseas payee through the branch or mail application form; if remittance is made in a Hang Seng branch, the remittance application form shall be filled in and signed for verification.
It should be noted that when applying for remittance from overseas countries or regions, the receiving bank information, such as SWIFT BIC number, is usually composed of 8 to 11 English letters or mixed numbers to ensure that the remittance can be delivered to the correct receiving bank. American bank accounts generally use Fedwire No. / ABANo., while most European bank accounts use an IBAN number. Please check the relevant information before using Telegraphic Transfer.
The Telegraphic Transfer duration is affected by many factors, including how many correspondent banks it has to go through, the bank processing time, the currency type of the remittance, etc. Generally speaking, from submitting the cross-border remittance application to payment, it will take at least one to five working days. In addition, it should be noted that banks set different cut-off times for different currencies. If the application is submitted after the bank cut-off time on the same day, the application will not be processed until the next working day, which will extend the remittance time.
In addition to transaction fees, Telegraphic Transfer applications also involve other charges such as remittance instructions, agency bank fees, etc. We will use Hang Seng Bank as an example to list the wire transfer fees for you in detail:
|Remittance charge items||Required fees|
|Remittance to Hang Seng Bank account in mainland China or Macau (through local branch)||HK$190|
|Remittance to non-Hang Seng Bank accounts in mainland China, Taiwan and Macau (through local branch)||HK$220|
|Remittance to other countries (through local branch)||HKD/local currency: HK$220|
Non-local currency: HK$260
|Remittance to all countries (through e-banking)||HK$65|
|Remittance instructions in Chinese (except for Hong Kong dollar remittance to Macau)||HK$150|
|Remittance that is submitted after 12 pm and will be handled on the same day||HK$40|
|Change or cancel remittance instructions||Service charge: HK$200|
Cable charge: HK$100 (if applicable)
Overseas banking fees (if applicable)
|Transaction inquiry fee||Cable follow-up charges are HK$100, overseas bank charges (if applicable)|
Minimum charge for each inquiry is HK$250
|Agency and receiving bank charges||If deducted from the applicant’s account:|
Remittance of local currency to Australia, UK, Canada, USA: minimum HK$160
Remittance to US dollars to countries or regions outside the United States: US$35
To remit Euro to most major European countries or regions:
EUR 12,500 or less: HK$200
Over EUR 12,500: HK$250
Remittance of RMB to China: minimum HK$20 or HK$100，as the case may be
Remittance of RMB to countries or regions outside China: HK$250
Export Japanese yen to Japan
Remittance to designated bank account and remittance amount of 2.5 million yen or less: HK$200
Remittance to other Japanese bank accounts or remittance amount of more than 250 million yen: minimum HK$350
Others: charged by overseas correspondent bank
Generally speaking, local and overseas banks will provide three payment methods for fees related to remittances, which are indicated by the following codes:
- SHA: The remitter pays the local fee, the beneficiary pays the overseas bank charge, and the beneficiary will charge the remittance balance after deducting the overseas bank charge
- OUR: The remitter pays all local and overseas bank charges, and the beneficiary will receive the remittance bank to remit the full amount
- BEN: The payee pays all local and overseas bank charges, and charges the remittance balance after deducting the above charges
A comparative study on the service charge of Telegraphic Transfer in foreign cross border remittance banks
For overseas cross-border remittance, each bank has different handling charges according to the mode of remittance or customer type. The following is a list of service charges for Telegraphic Transfer at several banks for comparison:
|Name of Bank (Telegraphic Transfer processing method)||Remittance service charge||Telegraphic Transfer charge|
|Hang Seng Bank (through local branch)||HKD/Local currency: HK $220|
Non-local currency: HK$260
|If Chinese characters are included, HK $150 will be charged (free of charge for Hong Kong dollar remittance to Macau)|
|Hang Seng Bank (through e-banking)||HK$65||If Chinese characters are included, HK $150 will be charged (free of charge for Hong Kong dollar remittance to Macau)|
|Bank of China (through local branch)||Personal account: HK$210|
Business account: HK$210
|The first 10 Chinese characters or the first 10 English words are exempted; surcharge of HK $100 per transaction|
|Bank of China (through online banking)||Personal account: HK$65|
Business account: HK$105
(Personal account can enjoy up to 30% discount through online banking, and enterprise account can enjoy up to 50% discount)
|Standard Chartered||Priority financial customers: HK$120|
Trade "profit" account customers: HK$140
Preferential treatment for SME customers: HK$160
Personal finance upgraded plan customers: HK$170
Fast and easy financial management, non-comprehensive financial management and SME customers: HK$200
|The Telegraphic Transfer fee is included in the remittance fee|
|Bank of East Asia (through local branch)||HK$150 Electronic network banking service/enterprise electronic network banking service||Telegraphic Transfer to the bank's overseas branch account: HK$100|
Telegraphic transfer to another bank account: HK$130
|Bank of East Asia (through online banking)||HK$200 (or equivalent in other currencies)||Telegraphic transfer to the bank's overseas branch account: HK$100|
Telegraphic transfer to another bank account: HK$130
|DBS Bank||HK$100 (DBS wealth management customers can be exempted)||HK$100|
In addition to Telegraphic Transfer, there are also alternatives for overseas remittance. Reap, a local online platform provides credit card remittance services for small and medium-sized enterprises and individual customers. As long as the credit card is linked to an account, more than 40 different currencies can be transferred, and there is no need to pay for registration. Let’s compare the differences between Telegraphic Transfer and Reap, and see the advantages of Reap.
1) Improving the flexibility of cash flow to handle repayments
As Telegraphic Transfer needs to be directly connected to a bank account, the amount will be deducted directly when the remittance is made. In case of a large amount of transaction, the working capital will be affected. However, you can enjoy up to 58 days interest-free repayment period by using your credit card instead of connecting to your bank account, which gives you more flexibility in handling payments and increases cash flow.
2) Make good use of credit card to earn points
Compared with the direct deduction of money from bank account by Telegraphic Transfer, if you use a credit card to transfer money through Reap, it can be counted as local or online account signing. Our credit card provides high rebate so you can earn points, flight mileage or cash rebate, which can reduce expenses in disguise and save more.
3) Compare and choose the highest exchange rate for you
Reap cooperates with three foreign exchange suppliers in the market. Each transaction is for customers to compare and select the best exchange rate in the market in real-time. Compared with the exchange rate of commercial banks, it is generally more appropriate for remitters to reduce remittance and transfer expenses.
4) Collect money with reach for buyers around the world
In addition to transferring money to overseas customers, Reap users can also make good use of the Reap Collect collection function to collect money from different customers around the world. In particular, for small and medium-sized enterprises with online stores, the Reap online payment does require payment of a monthly fee or setting fee. In addition to reducing operating costs, customers can also use credit card payment to earn points, which subtly attracts customers to pay with credit cards more willingly.
Interested in Reap but have more questions? Contact us immediately, and we will provide the answers for you!