Complete Comparison of Overseas Remittance Methods


3 min read

For many, international remittance has never been an easy task. How should we choose our own way of global money transfer? What are the differences between them? Read on to find out more about the various methods of overseas remittance, and pick the one that suits you best!

International Remittance via Banks: First Choice for Large Sums

International remittance via banks, also known as wire transfer, is a method of remittance between banks through telegraph/telex. The biggest advantage of wire transfer is that wherever the recipients are, banks can always remit the amount to their respective accounts. In addition to wire transfer, there are also mail transfers and demand drafts. Nonetheless, as wire transfer is the fastest among them, it is still the most popular choice. That said, the handling of wire transfer involves banks, during which each of them charges a different handling fee, making the overall cost of wire transfer higher and more complicated. Compared to other means of international remittance, wire transfer usually charges a lump-sum instead of a percentage of the remittance amount.

If you are remitting a larger sum of money and not in a hurry, wire transfer is still a fair choice. Want to know more? Feel free to take a look at our earlier article on wire transfer.

Online Credit Card Payment and Collection Platforms:
Quick and Easy

Wire transfer can be complicated, as you may have to visit a branch to verify the transaction or fill out a wire transfer application. Online platforms, however, eliminate these hassles. Reap is more convenient than other online payment and collection platforms because it only requires the payee's bank account to transfer funds from the payer's credit card to the payee's account, and the payee does not need to have a Reap account. Moreover, overseas remittance via Reap only takes 3 to 5 working days, which is easier and more convenient than other online existing platforms that require the payee to have a registered account at the same time. What’s more, Reap charges less.

For example, Paypal's cross-border remittance service charges 4.4% + a fixed fee based on currency, while Reap only charges 2.6% for remittance to overseas, coupled with the credit card spending rewards, which makes it even cheaper in effect. If you are in a hurry to remit money or wish to use a credit card to pay your bills, you may consider Reap.

Do keep in mind that Reap does not support bank deposits and payment invoices are required. Having a credit card, therefore, is a prerequisite for Reap. In this case, you can take Transferwise into consideration, a platform that allows you to transfer funds to banks as quickly as a few seconds without providing any invoices/receipts. There is no certain rate for the handling fee-basically, the more you transfer, the cheaper it is. Anyhow, nothing is perfect. If you’d like to pay by a credit card or debit card, Transferwise will charge an additional handling fee of HK$263.85 per HK$10,000 on top of a transaction handling fee, not to mention its very low limit for credit card and debit card payment- only a maximum of HK$20,000 can be transferred regardless of the remittance currency. Besides, Transferwise is using its own exchange rate, compared to Reap which uses the exchange rate of 3 foreign exchange (forex) companies and selects the best one among them, Transferwise is likely to be more costly.

Furthermore, the platform’s logic in handling remittance can be confusing, whereas Reap is clear and easy to follow-how much money you remit equals to the amount the payee can receive, since the handling fee is processed separately. In contrast, Transferwise first deducts the handling fee and additional charges from your remittance, converts the remittance into foreign currency next and then transfers it to the recipient's account. Simply put, using Transferwise is proven more difficult than Reap to calculate the amount received by the payee. So, if you are choosing Transferwise, this serves as a gentle reminder to carefully check the actual amount received by the payee to avoid disputes or misunderstanding.

E-Wallet Remittance: Connect to Western Union

If you only need to transfer small amounts across borders, or if the recipient does not have a bank account, then you can consider using Tap & Go's international remittance service in partnership with Western Union. Western Union is available in over 200 locations worldwide, and the recipient does not need to have a local bank account, with no handling fee to pay via Tap & Go with Western Union. However, you can only transfer a maximum of HK$7,500 per transaction, which is more suitable for small amounts of remittance.