Sending Remittance Payments to/from Malaysia
What is remittance?
With Malaysia holding a 1,453,954.44 remittance value (USD) according to the world bank, there is clearly a considerable volume of remittance payments being made to and from the country. A remittance payment is a money exchange through a transfer. Using an electronic transfer or wire submission, money is sent from a sender to a recipient.The majority of these transactions are made internationally.
Remittance payments to Malaysia can be made in multiple ways depending on the sender’s and receiver’s circumstances. For example, payment preferences, bank account access, transaction fees and how quick the transaction needs to be.
Remittance payments are usually used in two circumstances:
- Migration: As more people are beginning to study and work abroad, remittances are important for sending money back to family at home.
- Globally connected businesses: In an increasingly globalised world, businesses are forming international partnerships that allow them to connect with suppliers, clients, and employees across the globe. This has led to an increasing amount of remittances being used to pay for business invoices.
When choosing how to send remittance payments, the need to make sure the money is transferred quickly and safely is incredibly important. Choosing the right way to send remittance payments to Malaysia will help to make the process hassle free and more cost-effective, ensuring your foreign currency arrives in time and already exchanged to Malaysian ringgit into the recipient’s account.
How does remittance work?
When a remittance transaction is made, the required funds must be present and available in the sender’s bank account. The recipient’s bank will then process the incoming amount once a transaction is issued by the sender. The money is then subject to banking fees and foreign exchange rates before being available to the recipient in their local currency.
When sending remittances from abroad it is important that it is done properly and any taxation required is applied to the transfer, whether it be from the country of the sender or recipient. This is especially important for businesses remitting payments.
Ways to send remittance to and from Malaysia
There are a couple of options for overseas workers and businesses needing to send remittance payments to Malaysia, and each has advantages and disadvantages.
Bank Wire
This has been the standard for most remittance payments and is something that is used a lot for payments going to recipients in Malaysia. It involves moving funds from account to account using a “wire”. It can be done account to account or from a transfer of cash at a cash office. Bank wires are a safe way of transferring money but have high fees.
Cheques
In a digital age cheques are less and less of a commonality, but in terms of remittances they are still widely used. They have the upside of having a clear paper trail that can be tracked throughout the payment cycle and is the reason businesses like to issue payments this way. But the problem is the potential for human error that can lead to cheques bouncing and causing problems that require constant resolution. This adds to an already long process for clearing cheques.
ACH
ACH is fundamentally a digital cheque that suits businesses very well, especially if scheduling recurring payments is important. The set-up is a one-off task, but it can be tedious, especially when some businesses aren’t willing to give out their banking details. But when set up it is a low maintenance alternative to the time-consuming option of physical cheques.
STICPAY Local Bank Wire Option for Malaysia Based Customers
STICPAY offers a great way to send and receive money easily. Partnerships with local financial institutions in multiple Asian countries, including Malaysia, means STICPAY can offer a cost-efficient and incredibly fast alternative to an international bank wire.
STICPAY’s local bank wire option allows foreign funds to be sent, via STICPAY’s partner banks in your country, to a recipient’s bank account in Malaysian ringgit. Or, vice versa, you can fund your STICPAY account via your local bank account in Malaysia to use those funds online or to send money to another STICPAY user.
By using the Malaysian local banking system, you can save time and money because it eliminates the need for an intermediary bank. Using an intermediary bank would require an extra 2–3 days processing time and higher transfer fees would be incurred.
STICPAY’s local bank wire feature makes remittance payments an easy process for residents of Malaysia. They are straightforward to set up and are easily accessed through the STICPAY app, available on IOS and Android.
Ready to make remittance payments easy?
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Originally published at https://sticpay.com on August 24, 2021.
