Friday, February 17, 2012

Banking in Japan #8: International Money Transfers

Getting your money from place to place in Japan is one thing, but what about getting money to and from home? Lucky for you the laws have changed for the better in recent years and there are multiple options available.

Remittance Services
In recent years, the Japanese market has opened up to foreign remittance services such as Western Union and MoneyGram which will act as a middleman for your furikomi (bank transfer). 

In a past post we have already covered the wonderful service that is GoLloyds so we will skip to the other popular money order services.

7 Bank, part of the 7-11 convenience store chain, has partnered up with Western Union to allow overseas remittances via in-store ATMs, mobile phones, and online banking. The catch is that you must first open a 7 Bank account (which is free) before sending money and there is a remittance limit of 500,000 yen a month or 3 million yen a year. Rates vary by amount transferred and rates are lower for South Korea, China, and the Philippines. Luckily, 7 Bank offers services in multiple languages including English.

SBI Remit has similar partnered with MoneyGram to offer a similar service. SBI allows you to use your own bank account to furikomi money overseas much like GoLloyds as well as having tie ups with JP Bank ATMs and Family Mart convenience store ATM in addition to an online service.

Finally, mobile phone provider NTT DoCoMo has developed its own money transfer service, but unfortunately it only works for banks in Brazil, South Korea, China, and the Philippines. Like the above mentioned services, you must register your ID before using it.

International Wire Transfers 
Known as kokusai sokin or kaigai sokin (国際送金 or 海外送金), wire transfers are the tried and true way of getting money from country to country, usually by way of the SWIFT wire transfer network. 

Because of money laundering concerns, international wire transfers are generally made in person at a bank and a valid ID must be shown

However, some big banks such as Mitsui Sumitomo allow you to transfer online provided that you: 
  1. sign up for online banking, then sign up for their currency transfer services (send proof of ID and so on) and 
  2. register the bank accounts you want to send cash to (which can take a business day or more). 
The cost of wire transfers can be pricey if you are only sending a small amount. Typically, banks charge about 2,000 - 4,000 yen for yen denominated (enka date 円貨建て) transfers plus a conversion fee to what ever the receiving currency is (often measured as a percentage of the conversion rate with a minimum of about 2,000 yen). Receiving fees for money wired to you is about 2,000 yen. If you send in a foreign denominated (gaika date 外貨建て) currency, the fee is generally about 4,000 yen. This can differ by institution so ask you bank for details.

One of the trickiest parts of wiring cash is actually bringing money to Japan. Since Japanese banks generally keep everything at the local branch, you will have to figure out if your financial institution uses an intermediary bank or if the branch handles that service. For instance, small local Shinkin Banks (信用金庫) tend to use a national umbrella institution to facilitate international transfers. Therefore, you have to direct that money to the National Shinkin Service Bank but keep the account number of your local account.

One final word of warning... if you receive and/or send out a lot of money to overseas accounts, this may raise a red flag with your bank. Generally your bank will put your account into suspension and request that you come to the branch with an ID to verify your identity. Furthermore, if you request a transfer from back home, make sure the name on the wire matches exactly with the name on your account and alien registration card.

Checks, PayPal, and Postal Money Orders
Checks are generally not issued in Japan outside of very specialised business transactions so if that's your method you might want to consider international postal money orders (kokusai yubin kawase 国際郵便為替) available from JP Bank. These cost 2500 for yen denominated orders and 2000 for orders in US dollars..

Contrary to popular belief, some checks (especially cashier checks) can be cashed at big banks but this often requires a hefty fee as well as several days processing time.

You may be familiar with PayPal, but while it exists in Japan, it isn't very popular. PayPal generally works with credit/debit cards but it can be a good way to settle debts between friends in different countries with minimal costs.

Other Posts in This Series
# 1 The Basics
# 2 Opening an Account
# 3 Savings and Fixed Deposits
# 4 Internet Banking and Net Banks 
# 5 J-Debit and Pay Easy
# 6 ATMs
# 7 Domestic Money Transfers
# 8 International Money Transfers