Remitting money with Reap: Step-by-step guide, handling fees and risks

What is Reap?

Reap is an online payment and financial platform founded in Hong Kong in 2018. It issues the Reap Card, a corporate credit card supported by Visa, to small and medium-sized enterprises and startups. The card is equipped with various functions such as expense analysis and real-time spending alerts, and allows enterprises to define employees’ spending categories and limits. It helps businesses to better manage their finances.

With the alternative payment method Reap Pay, businesses no longer need a commercial bank account to pay local or overseas suppliers/ employees. They can also cover expenses not payable by credit card, such as rent. However, proof documents are required for each transaction.

Reap has served 20,000 clients with its remittance service, supporting over 15 major currencies such as Euro, Pound Sterling, Singapore Dollar and Hong Kong Dollar to over 220 countries and regions through Swift and local payment systems. However, Reap announced that they will only accept the Reap Card for Reap Pay services starting September 2, 2024, rejecting personal/ corporate credit cards. This means Reap Pay users no longer can enjoy any rewards from other credit cards.

Steps to remit money with Reap

To create an account on Reap, the company must be legally registered in Hong Kong and provide the company name and the business registration number. Other important information includes:

• The legal names and dates of birth of the board members, beneficiaries, or significant controllers

• A copy of the Hong Kong Identity Card (for Hong Kong residents) or a copy of the Singapore National Identity Card (for Singaporean nationals) or a copy of the personal information page of the passport (for non-Hong Kong residents/ Singaporean citizens). 

• Additional documents may be required, such as business registration certificates, annual declaration forms, etc.

After opening an account, you’ll be able to use the Reap Pay credit card payment service to pay anyone with a bank account, even if the recipient is not a Reap user.

If you want to use Reap Card as the default credit card for Reap Pay, you must deposit enough funds into the account to serve as a credit limit. When applying for a Reap Card, you must indicate your preference of the currency for settlements in advance, i.e. USD or HKD. Each company can only choose one settlement currency and cannot change it later. Companies with more bills in USD are suggested to select USD for repayment as transactions in other foreign currencies will incur a 2% foreign exchange fee. In the same sense, companies with more HKD bills should choose HKD. Virtual currencies* would work for both scenarios. 

* Virtual currencies are USDC and USDT

A step-by-step guide to remit money via Reap Pay:

1. Before remitting the money, connect Reap Card and Reap Pay, or directly deposit funds into your Reap account

2. Fill in your remittance details such as the recipient’s account information, bank account name, bank code, account number, and receiving currency. Then, choose whether to send a payment notification to the recipient

3. Then, select the payment date (It usually takes 3 working days; For urgent payments, you can use the express transfer feature which comes with additional handling fees)

4. Upload supporting documents (invoices, receipts, lease agreements)

5. Fill in credit card information

6. Review and confirm the entered information to complete the remittance

Please note that Reap Pay has a daily cutoff time at 5pm Hong Kong time. Remittances made after the cutoff time will be processed on the next working day.

Employees may also use the Reap Card to pay for business expenses, follow these steps:

1. Companies should deposit sufficient funds* into the Reap account in advance to establish a credit limit

2. Employees can then use the amount stored in the Reap Card to shop online

3. For physical store purchases, employees can connect the Reap Card to their electronic wallets or request a physical card from Reap

4. Companies will receive a monthly statement and must settle the payment before the provided due date

* The funds must come from the bank account registered on Reap during the account opening process. Funds from personal bank accounts will be declined.

Reap’s charges and remittance handling fees

Reap does not charge an account opening fee, but using Reap Pay incurs multiple remittance charges. To ensure there are sufficient funds in the Reap account, users have to deposit a sum of money into Reap Pay before remittance and this comes with a 0.8% handling fee. If you connect with a Reap card, the fee can go up to 1.8%. Additionally, cross-border and local remittances incur charges of US$25 and up to US$5 respectively. Currency exchange fees are calculated during the transaction.

Although the Reap Card does not have an annual fee and doesn’t charge handling fees for local transactions. A 2% handling fee will be charged if you conduct overseas transactions in currencies other than the local currency. ATM withdrawals also come with a 2% fee.

In summary, remitting money on Reap involves various handling fees and this poses high costs for small and medium-sized enterprises that conduct transactions frequently. Reap’s remittance costs are relatively higher compared to other third-party remittance platforms in the market. Meanwhile, Airwallex does not charge any handling fees for remittances, and their exchange rates are as low as 0.2% on top of the interbank exchange rate, making its service more cost-saving for most small and medium-sized enterprises.

Points of consideration of remitting money through Reap

One of the points of consideration of remitting money through Reap is the fluctuation of exchange rates leading to increased remittance costs. Since Reap’s exchange rates are based on the market rate at the time of transaction, remitters may not get the most favourable exchange rates. Besides, remitting money through Reap involves multiple handling fees, which could impact the total cost of remittance. Moreover, it requires 3 working days to complete a remittance, which may be inconvenient for small and medium-sized enterprises that are still gaining confidence from their collaborating suppliers.

Other remittance methods on the market

Other than Reap, which is a comparatively innovative remittance approach, there are still a vast number of remittance method options on the market: Traditional banks: Provide safe and reliable telegraphic transfer services. Businesses can remit money online or at branch locations. Banks typically provide remittance services for over 10 major currencies. However, as telegraphic transfer must go through the SWIFT system and involves intermediary banks, handling fees are charged. Additionally, the exchange rates are higher, and there are cutoff times for processing remittances. They normally take 1 to 5 days to complete a remittance.

Money changers: Aside from currency exchange, money changers also provide overseas remittance services. Although most of them claim to offer attractive exchange rates and low handling fees, they may charge additional costs for large transfers. Their processing times are also comparatively longer than other remittance methods. Remitters should carefully choose reputable money changers.

All-in-one financial platform Airwallex: Airwallex provides safe, efficient transfer services that come with no hidden charges. Users can open a multi-currency account that supports remittances in over 60 foreign currencies and can receive payments in more than 180 currencies. There is no minimum transaction limit and the exchange rates are as low as 0.2% on top of the interbank exchange rate. 85% of remittances can be credited on the same day.

Comparing transfer services on Reap and Airwallex

Frequently asked questions

1. What are the benefits of using Reap for remittances?

The remittance process is simple and secure. It supports multiple currencies and provides real-time transaction status notifications, allowing users to stay informed about the progress of their remittances. However, Reap’s remittance fees are relatively high and their exchange rates may not be as competitive as other options on the market. This can impact businesses’ overall cost of currency conversion.

2. Does Reap’s remittance service support corporate credit cards?

Reap Pay only accepts corporate credit cards registered as Reap Cards from September 2, 2024.

3. Is it secure to remit money using Reap?

Yes. Reap is regulated by the Hong Kong Customs and Excise Department and holds a Money Service Operator (MSO) license (License Number: 19-08-02816).

4. Are there limits on remittances with Reap?

There are no minimum or maximum limits on remittance amounts with Reap, as long as a sufficient amount is deposited in the Reap account to cover the bill payment.

Sources:

Information on Reap was retrieved as of October 2024, from below sources. Information provided is for reference only. Please refer to the official website of Reap for the most up-to-date details.

1. https://support.reap.global/zh-CN/articles/701376

2. https://www.linkedin.com/company/reapglobal/about/

3. https://reap.global/zh-CN/about-us

4. https://reap.global/reap-pay

5. https://support.reap.global/zh-CN/articles/701696

6. https://reap.global/reap-pay

7. https://support.reap.global/en/articles/1306432

8. https://support.reap.global/zh-CN/articles/703616#guide_to_corporate_documents_hong_kong

9. https://support.reap.global/zh-CN/articles/698432

10. https://support.reap.global/zh-CN/articles/701568

11. https://support.reap.global/en/articles/1197440?utm_source=linkedin&utm_medium=social&utm_campaign=pay&utm_term=50off&utm_content=video#reap_pay_fees_breakdown

12. https://support.reap.global/en/articles/698560

Disclaimer: We wrote this article in 2024. The information was based on our own online research and we were not able to manually test each tool or provider. The information is provided for educational purposes only and a reader should consider the specific requirements of their business when evaluating providers. This research is reviewed every six months. This publication does not constitute legal, tax, or professional advice from Airwallex nor substitute seeking such advice, and makes no express or implied representations / warranties / guarantees regarding content accuracy, completeness, or currency. If you would like to request an update, feel free to contact us at [email protected]. Airwallex (Hong Kong) Limited is regulated by the Customs & Excise Department and holds a Money Service Operator license (MSO License No. 16-09-01929).