Don’t rely on traditional banks for international remittance!

How much (as a percentage of fund) would you guess it cost to transfer RMB 1,406 from Taiwan to Malaysia using the traditional banking services? In this article I share my expensive lesson on international fund transaction using traditional banks. A staggering 27.46% of my fund of RMB 1,406 was “taxed” by the intermediary. Both the sending bank (in Taiwan) & receiving bank (in Malaysia) said that there it was not possible to find out how the intermediary levy the charges!

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How much (as a percentage of fund) would you guess it cost to transfer RMB 1,406 from Taiwan to Malaysia using the traditional banking services? In this article I share my expensive lesson on international fund transaction using traditional banks. A staggering 27.46% of my fund of RMB 1,406 was “taxed” by the intermediary. Both the sending bank (in Taiwan) & receiving bank (in Malaysia) said that there it was not possible to find out how the intermediary levy the charges!

Used a traditional route for international fund transfer

As my recent trip was sponsored, I was expecting reimbursement from the sponsor for the cost of my trip. To facilitate the process, the sponsoring university in China would pool our group’s reimbursements and let the organizer of the trip, Dr. Yan to do the individual distribution of the fund received.

There was just one issue for me: the organizer and all the rest of the members of our group are based in Taiwan with yours truly being the only one located in Malaysia. Nevertheless my modest claim (after deducting the RMB 500 loaned to me by Dr. Yan to alleviate my having left my wallet at home at the start of the trip!) was RMB 1,406 (about US$202). Dr. Yan’s office was resourceful enough to use one of his bank’s “transaction fee waiver” vouchers  in an attempt to keep the transaction fees down for me.

How much of RMB 1,406 would I get after being transferred to Malaysia?

At Malaysia’s end, previous experience told me that MayBank (Malayan Banking Berhad) would only levy a charge of RM5 (US$1.19)  for the transaction. Of course it would have made from the spread when converting the currency into Malaysian ringgit.

Whopping 27.46% transaction fees!

Based on the exchange rate of RMB 0.59 to RM 1.00, after deducting transaction fees, I was expecting to receive at least RM 750. When the fund finally arrived at my bank, I had a big shock.

From the RMB 1,406 remitted by Dr. Yan’s office, only RM 597.70 equivalent to RMB 1,019.96 arrived at my MayBank account. The meant that a whopping RMB 386.04 or 27.46% of the original RMB 1,406 remitted was deducted as the transaction fees!

No fees levied but banks make from the spread on currency conversion

Both Taiwanese and Malaysian did not levy any transaction fees

I contacted Dr. Yan’s office and his people double checked with his bank in Taiwan to confirm that the amount transferred from Taiwan was indeed RMB 1,406. This was confirmed via the transaction slip sent to me from Taiwan. There was also no fees levied by the Taiwanese bank on the RMB 1,406.

Next, I went to my bank, MayBank to get the full details of this transfer. I was told that MayBank did not levy any fees on the transaction but the transaction report indicated that only RMB 1,019.96 was received at the Malaysian end. I was told by MayBank that they only processed the amount that was received, that is RMB 1,019.96 and it has no idea on what was the transaction fees levied by the intermediary.

I conveyed MayBank’s findings to Dr. Yan’s office which in turn also confronted their bank in Taiwan. The conclusion given by the Taiwan bank was that they had remitted RMB 1,406 and the differential must be the transaction fees (including the spreads for converting from RMB to various intermediary currencies before the final conversion to RM). To make matters more confusing, the Taiwanese bank said that it had no control over how much its intermediary would charge.

Traditional remitting equals to having no idea of the transaction cost

It then became clear to me that for traditional bank remittance from overseas, the customers really are at the mercy of the intermediaries. The remittance cost is not transparent. It thus makes this a very risky and expensive choice to remit money.  And both the sending and receiving banks will wash their hands off should a customer like me getting fleeced by the intermediary (27.46% is a huge amount to levy as a remittance fee).

Better to use remittance service provider that are transparent in their fees


I made a check with MoneyGram’s website to see  if we were to transfer an equivalent of RMB 1,406 in US dollars (i.e, US$ 202) from Taiwan to Malaysia, with receiver paying the transaction fees what kind of scenario would happen.

MoneyGram’s transaction fees plus spread are reasonable

As shown above, if we were to use MoneyGram, I would be getting at least RM 770.49 from the RMB 1,406 or US$ 202 that were to be remitted with a fees of only US$ 15 (or RM63 or RMB105).  Thus with a exchange rate of RMB 1.00 = RM 0.59, this means I would have received RMB 1,305.92. The overall remittance and conversion cost in this case would be around RMB 100.08 or just 7.12% of the amount transacted.

Western Union

A check with Western Union shows that for a similar amount in US$, the cost of transaction would be around US$10. But since Western Union also make from a spread on conversion, for US$192, at US$1 =  RM3.8539, I would only get RM739.95 or equivalent of RMB 1,254.15 Thus the overall remittance and conversion costs would actually be RMB 151.85. The total remittance cost would have been 10.80% of the amount remitted.

Western Union’s spread is wider than MoneyGram’s

In both MoneyGram and Western Union cases, regardless of the total cost of the transfer of fund, the costs were pretty transparent. And even with the higher spread on currency conversion, Western Union would only have an overall cost of around 10.80% of the sum to be transferred. Of course the best choice would have been MoneyGram which has an overall cost of 7.12%.

Lesson Learned

  1. Never use traditional banks for international remittance.
  2. Zero “transaction fees” for international remittance is a misnomer. There is a spread when currencies are converted at the sending and receiving ends. This is how banks make their money!
  3. Intermediaries for traditional bank remittance (aside from MoneyGrams and Western Union) do take big cuts out of your total amount to be transferred overseas!
  4. Make sure the remittance service gives you a transparent total fees before committing to any overseas remittance.

In my case, since both Dr. Yan and I have WeChat China Wallet, it would have been better that we had explored this route where virtually there would be no cost of transaction. The only problems are: Dr. Yan needs to load his WeChat China Wallet with sufficient funds and at my end, I could only spend the amount in my WeChat China Wallet in China!

My tulmutous experience with WeChat Wallet

This article shares the author’s tortuous path towards getting WeChat Pay sorted during his trip from Malaysia to China when he left his entire wallet at home, with only RM15 to his name!

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At the start of my recent business trip to Guangzhou, China, I discovered that I committed the grievous of all errors that a seasoned (overly organized by my wife’s definition) traveller would not have done –  I left my wallet with all my cash, debit and credit cards at home! The only money I had was fifteen Ringgit Malaysia (RM15) that I kept in the casing of my mobile phone just in case I needed small amount of cash should I forget to bring my wallet when I was outside the house.

The start of the panic!

I was able to sail through immigration etc. because I had my passport with me and this was the only document (aside from the boarding pass) that I needed. Worse, I only discovered my predicament AFTER this process. By then, my wife who dropped me off in her car had arrived home from KL International Airport (KLIA). Even if she could fetch me the wallet, there would be a lot of persuading on my part to be allowed by the authorities to get through all those layers of security to meet my wife. And the clock was ticking, there was no certainty that my wife would be able to get to the airport with my wallet in time. Panic began to set in!

Transferring fund into WeChat Wallet

Then I remembered a friend from China telling me that he was able to live cashless relying only on his WeChat wallet for a week. I immediately contacted my wife to snap photographs of all my credit and debit cards and Whatsapp-ed these to me. This would allow me to “charge” up my WeChat wallet with some cash that I could use. Well that was the salvage plan.

As I already had my WeChat wallet set up and my identity verified (via a elaborate process involving snapping photographs of my MyKad and credit card), I thought adding a debit card where I could draw some cash would be a breeze. However, the debit card was only useful to you in this case if you have had authorized it to carry out  internet transactions which I did not do for my MayBank debit card nor was I had any luck with my Affin Bank card. But luckily, my Public Bank debit card did have this feature switched on and I was able to upload RM500 to my WeChat Wallet. But when I tried this wallet on, all the duty-free shops (that accepted WeChat Wallet) could not transact the payment. One of the shop assistants kindly suggested that this could be due to their system being set only to accept WeChat wallet of China visitors. Thus there might still be hope for me to be able to use my WeChat wallet in China!

AliPay is of no use

I did not give up. Next, I installed AliPay app and managed to add one of my credit cards to the system. But I faced the difficulty of verifying my identity. I was instructed by the app to upload a photograph of my passport to let AliPay’s people verify my identity. But this would take a few days (today, six weeks later, I am still waiting for an update from AliPay!). Thus AliPay was not a solution for me.
[Later, I Googled and found out that AliPay can only verify a bank card if it is issued by a bank in China!]

You need your physical credit card to access the airport lounge

I was hungry and remembered that one of my credit cards allowed me two free use of the airport lounge per month. So off I went in search of this lounge.

“Sorry sir, we do need the physical card to swipe and charge even if we can proof your identity with your passport”, was the reply I received when I presented my Whatsapp-ed copy of the credit card. Needless to say, my plan to use the lounge to get some food was in tatters. With my meager cash of RM15, I therefore could not take a chance to buy breakfast! I was looking forward to a proper meal on the plane! Hungry!

Free WiFi at Guangzhou Baiyun airport saved the day

To cut a long story short, I did not have to rely on my Wechat wallet for this trip. Guangzhou Baiyun airport provides free WiFi (you need to register to use). With this free WiFi, I did not have to switch on my mobile data roaming that would have cost me RM38 the instant I enabled it!

In this case I could use my WeChat identity to log on to Baiyun Airport’s WiFi. I was able to WeChat message the organizer of this business trip, Dr. Yan who happened to be at the airport early to meet the rest of our group. A loan of five hundred Renminbi (RMB 500) cash was promptly provided by Dr. Yan. This solved my cash problem as all transport and accommodation for the trip were arranged and sponsored by our host.

[I must add that, prior to that day, both Dr. Yan and I only communicated via WeChat. We’ve never met! I also was supposed to make my own way to the host university from Baiyun Airport about 100 km away, thus I would need to have at least RMB100 cash. There was no certainty that my Didi app which was linked to my credit card would work. It might not be a travel option. I did have the flight number of the rest of my group travelling from Taipei. If I did not meet Dr. Yan, and my WeChat Wallet did not work, my last resort would have been to camp outside the arrival gate with a placard to find them. Again, I had never met any of my group members before! It turned out that my luck was a bit better. Not only I could find Dr. Yan, he allowed me to hitch a ride to the host on a bus he arranged for the members from Taiwan.] 

Make sure you have a credit card verified travel booking app

As I had to stay an extra night in Guangzhou compared to my other group members, I promptly searched for a night’s accommodation on Trip (an app I used to book the flights for this trip). As Trip has already had my credit card details (and verified these when I booked my flights), I had no problem getting my room at a small apartment-hotel near the Baiyun airport.
[Travel tip: always have at least one of your favourite travel booking apps on your mobile phone and make sure it has all your credit card details. You never know when you will need it as in my case!]

Guangzhou’s Metro accepts WeChat pay too, but must have internet to work

To satisfy my curiosity, when I made my way to my hotel, I tried to use WeChat wallet on the Guangzhou Metro. A very nice young lady staff tried her best to help me to WeChat pay my fare. Then we discovered that Baiyun airport’s WiFi signal was too weak at the Metro station. I was not going to pay RM38 data roaming charge to carry this experiment to fruition. I went on to pay for the RMB2 fare by cash. I did have to go to another counter to have my RMB100 changed to smaller denominations that the ticket machine could accept.
[Travel tip: always carry some smaller denomination Renminbi, say in RMB10 at least for public transport etc.]

How to set up WeChat Wallet for China

WeChat Wallet comes in different versions. This, I found out when I was enlisted by my old pal, SM Liew who was experimenting with WeChat’s Red Packet feature. Red Packet allows WeChat users in China to send small “hong bao” (red packet) to their friends on WeChat anywhere in the world. To get your China version of WeChat Wallet enabled, all you need is a small Red Packet from someone with a WeChat Wallet for China. The moment you accept and open the Red Packet, your China wallet is enabled!

I repeated the same procedure successfully with my son recently by sending him a RMB0.50 Red Packet, from the RMB1.00 I received from SM Liew! Of course, my son had to get his identity verified and his WeChat wallet linked to one of his debit cards first.

WeChat Wallet Malaysia version does not like rooted phones!

With RM500 inside my WeChat Wallet and having failed to use this at KLIA duty-free shops which accepted WeChat wallet, I wanted to see if I could withdraw my money to my bank account. The moment I click “Withdraw”, I was hit with this message. “Withdrawal is not supported on jail-broken or rooted mobile phone.

Rooted phone not allowed!

A call to WeChat Malaysia’s call centre was made (on Oct 09, 2018) but I was told to screen capture the message and use the feedback system to complain to WeChat. I was promised a two-business days response, that was four days ago (this article was written on Oct 13, 2018)! I have not heard back from WeChat Malaysia since.

Feedback to WeChat, 2-business days turnaround is not true!

With this information, I can speculate that my rooted smartphone was the cause of my failure to make a payment with WeChat wallet at KLIA’s duty-free shops. So, is my RM500 stuck at my Wechat Wallet forever?

[3 hours after I published this article, WeChat Malaysia finally responded to my feedback, citing Bank Negara (Malaysia’s Central Bank) rule that rooted mobile phone cannot be used for fintech transaction as the reason. Perhaps someone from WeChat Malaysia DID read this article?]

[With the latest update (version: V6.7.3), WeChat Wallet Malaysia seemed to have “re-allowed” rooted phones to work. I was able to initiate a withdrawal from my WeChat Malaysia wallet. If the transaction can be completed, I will update it here  Two working days were all it took for the transaction to withdraw RM400 from my WeChat Malaysia wallet to my bank account to be completed.]

WeChat’s multiple device sign in, a get-around for rooted phones!

Unlike Whatsapp, WeChat does allow multiple mobile devices to access it. But you can only do so one at a time. This means if you access WeChat on a spare mobile phone, yoru existing WeChat app will be signed out on the main phone. I had installed WeChat on my Amazon Kindle tablet before and using “username and password” option to sign in, I was able to access my WeChat Wallet for Malaysia and the offending message above did not come out. I can now withdraw my fund from this wallet by accessing WeChat using my Kindle!

Lesson learned and shared:

  1. Don’t forget your wallet when you travel, especially to overseas destinations!
  2. In case you have left your wallet at home on your trip, you should always keep one of your credit cards in your checked-in luggage [it may be worth paying the extra RM25 tax a year for this!].
  3. Always have a passport cover. Have a small cards holding wallet or just a small Ziploc bag to house some cash and one of your credit cards or debit cards inside. Keep this Ziploc bag with your passport all the time. But remove this Ziploc bag whenever you face the immigration officer (whether at home or abroad) to avoid confusing the good official who may take this as a bribe!
  4. Don’t rely on WeChat Wallet for your China trip unless you are going to have
    a) Cash uploaded to the wallet and
    b) mobile data roaming or a local SIM card.
    You cannot make use of your WeChat wallet if you do not have access to the internet in China! And it is very difficult now to get a SIM card in China.
  5. If you want to use WeChat Wallet in China, make sure that you have your WeChat Wallet for China enabled and find a way to upload RMB into it first. Of course you must have access to the internet while you are in China.
  6. Have at least one travel booking app installed in your smartphone. Make sure this app has verified your identity and your credit card. Even if you do not have your credit card with you, this app can still be used to make your bookings (like I did with Trip).

If you need to learn more and get updated with the latest discussion on WeChat Wallet for China, do check out this thread on Tripadvisor. For Americans, there is a fintech site, Swapsy which provides free transaction for swapping US$ for RMB on WeChat Wallet platform. Swapsy only works if you have a US ID card, so it is of no use to those without a US ID.