The company that I work for, 37coins, is incorporated in California. We are in Bangkok now, and soon we are going to Manila. Of course, as a Korean citizen, I don’t have a bank account in the States. All my bills are connected to my Korean bank account.
Payroll is coming. What should I do?
Jonathan, one of our co-founders, wants an efficient way to pay my salary. Doing an international wire from US to Korea costs the company 27USD! (Don’t worry, I actually get paid more than $300 a month. I’m worth it^^)
Not only does the US bank charge a fee to SEND the money, but my Korean bank will also charge a fee for me to RECEIVE the money. Oh, don’t forget that currency rate is different sending and receiving; because, banks earn profit from the exchange process as well.
I didn’t care about this issue before joining this team. Using a bank has been just a common thing. But things have changed, so now I should look for other options. How about Bitcoin? Of course with a 37coins’ SMS wallet, I can easily send and receive bitcoin.
Before trying to get my salary in bitcoin, I was curious how much money the banks will take from me (To be honest, I would rather say “how much the banks will rip me off”). So I sent an inquiry to the Korean bank about the fees they charge for the international remittance. I emphasized this sentence, “Please tell me exactly and specifically what kinds of fee will be charged and how much it will cost”. I got an email from their customer service and here is the summary:
- When a customer receives money from the bank in overseas (regardless of the amount), 10USD of the international wire transfer fee will be charged by XXXXbank Korea.
- If your XXXXbank Korea account is set by the Korean Won, the sell rate of the point when the company transfer money will be applied (Why currency chart is hard to understand? Why is the buy rate and the sell rate different for cash or remittance? For whom and for what? Anyway, all the time when I send and receive my money with banks, I lose my money. That is the one thing I can understand very clearly).
- The currency conversion rate is different from bank to bank.
- We can’t answer about the fees of opposing side’s bank (Can you believe it? I will never know how much will be charged by the other bank, unless I inquire directly).
- Customer can get an exemption of 10USD international wire transfer fee with our ‘xxx global remittance’ service (But still there will be another fee from the opposing bank. Also in this case, money will be converted by Reuters currency at the opposing bank. And most of the time, it makes a loss. This is my money, but everything is still vague).
Time is a money.
Fees are not the only problem. With international wire transfers, you never know when the money will arrive. Time is money. So now we both lose money via fees and lose money from a lost time.
When Jonathan tried sending a part of my salary from the company’s bank account to my Korean account, none of us could estimate how long it would take. He processed the remittance at 9am on Saturday, and the money arrived at my Korean bank account the next day noon (both Bangkok local time).
There are many factors that affect the amount of time required for the money to arrive, such as:
- Business day (banks generally don’t process payments on weekends)
- Holidays (you have to consider both countries’ holiday. Because even though today is not a holiday in Bangkok and the States, October 9th is a holiday in Korea. Korean bank people won’t work, for sure)
- Working hours
- Time difference
- Number of mediation banks
- Partnership between banks (I was lucky because the company’s American bank and my Korean bank have a partnership and an agreement. In terms of international remittance using a bank, it was pretty quick. Generally, my situation between banks is the best that it can get. It can obviously be much worse.)
So the results of this little experience are:
- A 27USD fee for the company to SEND
- A 10USD fee for me to RECEIVE. I received 309,158KRW (290.351USD, XE Currency Converter) into my Korean bank account.
- Took more than 24 hours.
- International banking is complicated and confusing. I am not going to understand what happens between banks: exactly how much I will receive, how much I will lose and how long it will take unless I do deep research. Maybe I need to get a friend that works for a bank.
Next, I will experiment with getting paid in Bitcoin. Let’s see how it works. Let’s compare with the old-fashioned remittance. It might just blow your mind. Let’s see.
