International transfer: Procedures, fees, processing time and method

How do you choose the best international remittance option? Five crucial points to consider

Any business that sets eyes on global expansion has to face the challenge of frequent international transfers. While solutions catered to eCommerce owners and retailers are plentiful, it’s not the case for wholesalers. The nature of wholesaling — big orders and long processing time — makes international money transfers an inevitable headache.

1. Transaction fees and hidden fees

While the business of wholesaling seems lucrative with high transaction volumes, their profit margins are far lower than retailers in reality.  For every international transfer, wholesalers need to absorb the exorbitant bank service charges.  If the transaction involves multiple currencies, they will need to pay another foreign exchange fee, and suffer from a disadvantaged foreign exchange rate (usually 4-5% higher than the interbank exchange rate, the rate that’s shown on Google).  Be prepared for some more hidden charges if you choose to make international remittances through traditional banks. Charges such as foreign transaction fees, additional charges for large transfers, and messaging services will cost you HK$100-$200 per transaction. These fees and charges are eating up your narrow profit margin. They are also dragging your business down, hindering any further expansion.

2. Long processing time for traditional remittances

With high transaction volumes comes big orders and long processing time. Wholesalers usually allow orders on credit to allow time for production. Through SWIFT, traditional banks usually need 24-48 hours to process international transfers. Depending on the complexity of the transaction, it can sometimes go up to 5 working days. Imagine this: you have multiple accounts on credit, a few international money transfers pending, plus a late-paying customer. How catastrophic your cash flow will be!

3. Fluctuating foreign exchange rates

From receiving an order and issuing a quotation, to production and shipment, it will be weeks or even months until the transaction is finally completed. By then, the exchange rates must have fluctuated a good many times. Given the volatile global environment, the rates of major currencies are constantly and dramatically fluctuating. Imagine if you prepared a quotation for a foreign customer based on the market exchange rate at the time, but their local currency depreciated a few weeks later before you could deliver the order, you would be suffering from a devastating loss.

4. Varying remittance limits

Different major banks have varying remittance limits depending on the currency involved. For example, Hong Kong residents have a daily remittance limit of Chinese Yuan (CNY) 80,000 per person when remitting CNY to mainland China. It's important to note that remitters can only transfer funds to their own personal bank account with the same name in mainland China.

Furthermore, banks have limits on transfers to unregistered or registered third-party accounts. Typically, lower limits are applied to unregistered accounts to ensure the security of the remitter's account. Therefore, individuals who frequently transfer or remit large sums of money are advised to register their third-party accounts with the bank in advance so the daily limit is higher.

5. Laborious bookkeeping and payment tracking for international transfers

Global wholesalers deal with orders from different parts of the world. Not only does this involve multiple currencies, regions and foreign banks, but also the variation in order sizes, frequencies, shipment date requirements and transaction durations makes it extremely challenging for any bookkeepers to keep track of. It’s not uncommon for a wholesaler to miss supplier payments or to send a payment reminder to forgetful customers. 

5 common types of foreign transaction fees

1. Additional telegram charges: if the international transfer is complicated, and requires more than one SWIFT code, traditional banks will charge an additional telegram charge. Major banks in Hong Kong usually charge around HK$100.

2. Status enquiry fee: with traditional banks, you cannot find out the progress of your remittance unless you contact the bank. Depending on the channel of your enquiry (IDD or SWIFT), this service will cost you HK$100-$220.

3. Change / Cancel / Return fee: in case you need to make changes or cancel the foreign transaction, you will need to pay for both your remitting bank and the correspondent bank. The charge is about HK$200.

4. Create or change a post-dated remittance: to ensure timely payment, it’s not uncommon for wholesalers to initiate post-dated remittance. This will cost about HK$100, plus all other fees that a foreign transaction will incur.

5. Correspondent bank fee: if your supplier prefers to use a correspondent bank, and ask that you afford the related fees, be prepared to pay an extra of HK$100-HK$300 for this service.

Understanding the process of overseas remittances via traditional banks

You may ask, why does it take so long and why is it so expensive to complete an international transfer with traditional banks?

To answer this question, first, you need to understand how remittance works in traditional banks.

For a remittance to occur, you will need to provide basic information such as remitting bank account number, transfer currency, transfer amount and receiving bank account number. You can choose to initiate a remittance via online banking. However, prior to that, you will still need to fill out the “Outward Transfer Beneficiary Details Registration Application Form” to register the overseas payee at a branch or mail it back to the bank. If you decide to go to the branch yourself to initiate the remittance, you also need to fill out the remittance application form and verify it with your signature. 

Only by completing the above steps will the bank start to process your remittance application. Normally, remittance transfers are done through the SWIFT network. SWIFT is one of the most important details you need to provide to the bank, it serves as a code of communication between banks. Consisting 8-11 digits of characters and numbers, a SWIFT code helps banks to verify each other’s identity, and subsequently make sure the amount is wired to the correct receiving bank.

Worth noting though, banks in the United States normally use Fedwire No. or ABANo., whereas European banks use IBAN. The code of communication between banks varies across different countries and regions, so make sure you get all the information correct before initiating a remittance. 

Why does it take so long to process a wire transfer?

You may already know that it normally takes 1-5 working days for traditional banks to process a wire transfer. You may wonder, under what circumstances can it be within a day?

In fact, the processing time of wire transfers is affected by many different factors. For instance, the number of correspondent banks, the processing time of those banks, types of currency and the bank’s cut-off time. 

It’s important to know that the cut-off time of your international transfer depends on the currency. If you miss the currency cut-off time, even if the branch is still open, the bank will only start the process of wire transfer the following working day, lengthening the process of international remittance. 

Information required for international remittance

When making an international remittance, the following information is typically required :

1. Remitter's or payer's name, account number, remittance currency, and amount.

2. Name of the receiving bank, SWIFT code, and transfer destination.

3. Recipient's account name, account number, and address.

4. Party responsible for bearing the remittance fees.

Airwallex: redefining the norms of international money transfer for wholesalers 

Airwallex can empathise with these challenges that wholesalers have been facing, and is working hard to expedite international transfer in order to create a more efficient infrastructure that’s beneficial to businesses. Through secure and reliable financial technology, Airwallex tackles the challenge of international money transfer one by one.

1. Transaction fees and hidden fees → Low transaction fee, no hidden charges

2. Long processing time for traditional remittances → Complete any international transfer in as quickly as one business day

3. Fluctuating foreign exchange rates → Market-beating rate and instant transfer

4. Laborious bookkeeping and payment tracking for international transfers → Easy-to-use platform to streamline bookkeeping

Sounds too good to be true?

It really is that simple! All solutions start with an Airwallex Global Account. With the Airwallex Global Account, you can collect funds in 12 currencies, and pay suppliers in 30+ currencies. We also charge zero monthly fee, low transaction fee and absolutely no hidden charges. In other words, Airwallex essentially eliminates all four international transfer challenges with just one Global Account.

With Airwallex’s multi-currency account, wholesalers can choose to accept payments in customers’ local currency. This empowers wholesalers to bypass traditional banks, avoiding the unnecessary forced conversion. Not having to worry about the ever-changing exchange rates, wholesalers can also choose to pay local suppliers in the same currency, gaining 100% control of the budget.

By holding an Airwallex multi-currency account, you are essentially holding multiple local accounts across the world. This means that international money transfer is just as easy as local transfer. Airwallex only needs as fast as one business day to process your international transfer requests, allowing you to closely manage your cash flow and avoid any hiccups.

Moreover, Airwallex offers market-beating exchange rates for wholesalers. We only charge a small markup on top of the interbank exchange rate, so your business can remain financially competitive. 

To help you focus on global expansion, and spend less time on tedious administrative work, Airwallex offers a one-stop expense management tool that can automate bookkeeping and save all tax returns and invoices. This user-friendly platform is sure to make your monthly reconciliation a breeze. 

Case study: meat and seafood wholesaler

Speed is the single most important factor in managing a fast-moving meat and seafood wholesaling business.

This is however easier said than done. By sourcing the freshest and highest quality meat and seafood around the globe, wholesalers need to make international transfers and take a gamble on the fluctuating exchange rates. 

Consider this example: a wholesaler based in Hong Kong sources lobsters from Australia and abalones from South Africa. He will need to pay his suppliers in AUD and ZAR on a weekly basis, while accepting HKD from local customers. 

Through the traditional international remittance model, this wholesaler will need to exchange HKD for AUD and ZAR every week, absorbing the cost of both bank service fees and international transfer fees to pay his suppliers. Due to a processing time of 24-48 hours, he often pays in advance to secure the order. In case of uncontrollable factors affecting sales performance, his cash flow will be doomed. 

On a flip side, if he had chosen Airwallex, he would be able to bypass traditional banks with Airwallex Global Multi-Currency Account, saving up to 99% bank fees and enjoying the market-beating exchange rates that Airwallex offers. Most importantly, his profit margin would have been significantly improved. 

That’s not all. Airwallex can complete any international money transfer in as fast as one business day, meaning that this wholesaler would never need to make advanced payments, and could more effectively manage his cash flow.

Case Study: Electronic supplies and gadgets wholesaler

Despite the longer lead time of electronic supplies and gadgets, they are more durable and higher in value. With exchange fees charged based on the amount of the transaction, wholesalers need to endure the painful cut in their profit margin.

Let’s say a wholesaler imports laptops from the USA, where the minimum order is 50 units, each costs US$500. Each transaction will at least cost US$25,000 (~HK$195,800).

If done through traditional banks, this international transfer would have cost the wholesaler a minimum of US$250 due to disadvantaged exchange rates (bank rates are 1-3% higher than interbank exchange rates). The wholesaler also would need to pay other service fees and hidden charges. Needless to say, the profit margin would be looking narrower than ever.

Airwallex offers low transaction fees that help wholesalers save up to 99% of international transfer fees. Together with our competitive exchange rates, wholesalers can effectively lower their costs and improve their profitability.

Choose the best international money transfer service for your business

Consider these 3 factors before you send money internationally.

1. Compare transaction fees and exchange rates

All service providers charge and markup differently. It’s wise to choose a provider that communicates the transaction fees with clarity and transparency, or you may fall prey to a scam. Do check their customer reviews before you decide on a money transfer company too. Also worth mentioning is that fees may vary depending on the country or region of the receiving bank. Get a better understanding of the fees you will need to pay by contacting the company directly.

2. Choose between Airwallex, wire transfer, credit card or debit card transfer

There are different ways to initiate an international transfer, so you will want to choose a method that allows you to complete the transaction with low fees, high speed, wider global coverage, and better customer support.

3. Be mindful of transfer limits

It’s common for money transfer service providers to set a transfer limit, some also have a daily limit or annual limit, which may cause inconvenience to wholesalers. Pay attention to the various limits imposed to your account, as they may vary based on the currency or the location of the receiving bank.

Safely expedite international transfer with Airwallex 

Sign up for a free Airwallex Global Multi-currency Account today. It only takes 5 minutes to submit documents (e.g. your ID and Business Certificate) and you can enjoy our fast and secured international money transfer services. Avoid unnecessary bank charges, take advantage of our competitive exchange rates, and claim back your lost profits! 

System security is our top priority. In order to ensure the safety of your transactions and funds, Airwallex has implemented a comprehensive set of security measures that makes sure no one can get access to your funds except yourself. We also work with over 60 banking partners around the globe to ensure smooth, fast and safe transactions. 

FAQs on international transfers

Is sending money internationally safe by Airwallex?

Yes, sending money internationally is safe with Airwallex. Airwallex is a licensed and trusted platform for businesses to transfer money internationally. Airwallex allows businesses to send money in bulk internationally and safely, as quickly as same-day.

Are there fees when sending money internationally with Airwallex?

Most money transfer services charge an upfront fee and an exchange rate markup per transfer. Some services may charge just one or the other. 

However, Airwallex charges zero transaction fees, and a small markup as low as 0.2% above the interbank exchange rate when you conduct international transfers in foreign currencies.

Why choose Airwallex to transfer money internationally?

For 4 simple reasons: 

• Airwallex can complete international transfer as quickly as within the same day

• You can collect funds in 12 currencies and make payments in 30+ currencies 

• Airwallex charges zero transaction fees, and only a small markup as low as 0.2% above the interbank exchange rate

• Our customer support teams work around the clock to make sure you get the best out of our platform.

What’s not to like?

Learn more about how Airwallex helps wholesalers save cost today. Watch our demo to find out more.