Kind of Yes, Kind of No
Posted: Mon Apr 02, 2012 5:39 pm
Thats really really an over simplistic answer. First there are no real international banks that have transparent banking with the USA. There isnt a Bank you can open an account in the USA that would have a Branch in beijing that you could walk into, depositt RMB and then use Bill pay or a debit card. Lots of people have tried and they either end up costing more in time and or money then just sending a wire to begin with.
BOA use to have a branch in HK that you could do that, but it was really just an internal wire. HSBC clims you can do it, but again its just an internal wire (with reduced costs) but you have to have all kinds of premium accounts and fees that would cost the same as a regular wire would, plus HSBC isnt as common in the States. Chase has a similar set up but you have to have a brokerage account and commercial checking account. You can deposit cash in China into your brokerage account, in escrow and then request a dispersion of funds and have those funds credited to your checking account, but its a convoluted process.
Basically there are three ways to send money back to the states:
1) Wire Transfer
2) Transfer Services
3) Mail
A wire transfer is a bank to bank transfer of funds. Their are two types tele-fax and electronic. With a telefax wire The initiating bank (in china) calls the wire/international banking office for your bank in the USA with your banking info, and then follows up with a fax of the transaction. Basically its a contract between the banks to move the money from one bak to another. Its the oldest type of wire transfer there is and can be really slow (5 days to a month), depending on the relationship and reputation of the bank, you may get the money credited to your account before it "settles". An electronic transfer uses (in the USA) the ACH (Automated Clearing House, which is the retail component of CHIPS and FEDWIRE. FEDWIRE services government securities and the Federal reserve. CHIPS services commercial corporations and non government commercial paper. They dont really matter as locally its the ACH your bank deals with. The ACH is the same entity that handles your checks. So when you write a check it gets turned into an electronic transaction, its the ACH that handles that) and a similar processor in the foreign country.
In China there are three processors EIS (Electronic Interbank System), EFT (Electronic Funds Transfer System) and LCH (Local Clearing House). EIS and LCH are owned by People's Bank of China (which is "THE" big bank owned by the Chinese government). EFT is owned by the smaller (still chinese government owned) commercial banks: Industrial and Commercial Bank of China, Agricultural Bank of China, Construction Bank of China, and Bank of China. All those dont really matter because at the retail point they all use CNAPS (China’s National Advanced Payment System).
So in an electronic wire the banks talk to their clearinghouses and the clearing houses talk to each other. The important thing for you to know in an electronic wire is where and when is the "settlement" day/time. The settlement day time determines the exchange rate, and the where determines whos exchange. That is going to determine how much money goes into your account.
Wire transfers have the benefit of reliability, security and accessibility (because the money ends up in your account which is a place you can then do something with it). The draw back though is cost (they are typically the most expensive) since you get charged by the sending bank and receiving bank. A wire transfer can cost between $20 and $50 when all the fees are paid. They also arent convenient. Since you have to go to the bank during business hours, and will also need to go during the time the foreign account representative is there. Since you will want someone who 1) speaks english 2) Knows how and can access the wire services for that bank branch. It might shock you that you can only do that at certain times of the day or week.
2) Transfer Services you know these already. Western Union, Money Gram, and PayPal. Instead of using banks directly these companies have their own network of offices and agents across the globe. You can walk into a 7-11 (yes lots of these are in china) in Beijing that acts as an agent for Western union and "send" the money to a grocery store in Florida whos a western union agent (In China Walmart/Trustmart is becoming popular for this). Costs are usually cheaper ranging as low as $7 to about $25, with the average around $15. The benefits are that its FAST, usually within 10 minutes to an hour the money is available. Its also cheaper per transaction. The disadvantages are that 1) Someone like a family member or trusted friend has to pick up the money (meaning going there, waiting in line, and then taking it to your bank and depositing it in your account). 2) The daily/transaction limits are small, usually between $300 and $1000 per transfer. Meaning if you have to have 2,500 every month to pay your mortgage and student loans. That means someone has to make 3 trips on 3 different days to pick up the money an deposit it in your account.
3) Bank by mail. Many banks in the USA including smaller state banks, credit unions and online banks offer this method though no one uses it very often. Basically, you go to your bank (or post office) in beijing and get an official check (or bank draft) put it in an envelope and mail it to your banks "Bank by Mail Address". The bank gets the check and then you wait for the check to clear, and the money is credited to your account. The benefits are that its cheap, and doesnt require someone in the states to act as your liaison. This can be the cheapest way as a bank draft cost about $1 and international postage is about $.50. The problems are that its VERY slow. First class international mail can take a month or longer to arrive. You can send it EMS or DHL if you want it to get there faster but its much more expensive (between $15-$30) and its also far less secure. Mail with money in it tends to get lost, and getting the money refunded from the chinese bank can take a long time. You also have to wait for the check to clear, which can take 10-30 days. (In all fairness I have to say Ive known people to do the bank by mail approach using cash (USD), though I wouldnt recommend it).
So basically it depends what your needs are. My advice is:
Your better off dealing with the People's Bank of China in Beijing as they just have a better work flow and relationship, with USA banks. Likewise your better off with a bigger bank in the USA (Chase, BOA, Wells Fargo, etc) then a state run bank or credit union. You want banks (USA and China) that have
1)an English speaking customer service number and preferably an international banking department. English PC/Online banking is a nice plus (in China).
2) An IBAN (International Bank Account Number) which may be different then the ABA (American Banking Association) account number, (which you see more off with smaller state banks and credit unions then the large national banks).
3) a SWIFT code. Which is used by the various clearing houses to identify various banks. This is in addition to your banks "routing number" used in the Federal Reserve American Banking System.
4) A compatible PIN number. ATM machines in China typically use 6 digit pins. Foreign machines (most of them with Peoples Bank of China) will accept 4 digit pins. Some will accept two zeros and then your 4 digit PIN. Some wont accept PINS that start with 0. You also want an ATM debit card that uses as many processors as possible, most ATMs accept Plus, Cirrus & Masestro, which are common to all the big USA banks.
5) Most people do a lot of their banking by ATM. As a foreigner the only time your likely to go into the bank to see a teller is to 1) convert currency, 2) cash travelers checks, and 3) Wire money. China is a pretty large cashed base society, and while you an use your ATM card at some stores (such as Watsons, Ren Ren Lu, Trust mart, most people use cash). You may qualify for a credit card, depends on your school and how much money you make. It will either have a low credit limit, or else you typically have to wait a year before you can apply.
6) Exchange Rates: remember when i was discussing the settlement date? You basically want to find out how soon and where the banks settle their wires. The sooner the settlement date to the transaction date the better, as the exchange rate is less likely to vary as much. Chase settles in Germany, BOA in New York. Of course you should also shop around for the lowest account fees and transfer/transaction fees.
BOA use to have a branch in HK that you could do that, but it was really just an internal wire. HSBC clims you can do it, but again its just an internal wire (with reduced costs) but you have to have all kinds of premium accounts and fees that would cost the same as a regular wire would, plus HSBC isnt as common in the States. Chase has a similar set up but you have to have a brokerage account and commercial checking account. You can deposit cash in China into your brokerage account, in escrow and then request a dispersion of funds and have those funds credited to your checking account, but its a convoluted process.
Basically there are three ways to send money back to the states:
1) Wire Transfer
2) Transfer Services
3) Mail
A wire transfer is a bank to bank transfer of funds. Their are two types tele-fax and electronic. With a telefax wire The initiating bank (in china) calls the wire/international banking office for your bank in the USA with your banking info, and then follows up with a fax of the transaction. Basically its a contract between the banks to move the money from one bak to another. Its the oldest type of wire transfer there is and can be really slow (5 days to a month), depending on the relationship and reputation of the bank, you may get the money credited to your account before it "settles". An electronic transfer uses (in the USA) the ACH (Automated Clearing House, which is the retail component of CHIPS and FEDWIRE. FEDWIRE services government securities and the Federal reserve. CHIPS services commercial corporations and non government commercial paper. They dont really matter as locally its the ACH your bank deals with. The ACH is the same entity that handles your checks. So when you write a check it gets turned into an electronic transaction, its the ACH that handles that) and a similar processor in the foreign country.
In China there are three processors EIS (Electronic Interbank System), EFT (Electronic Funds Transfer System) and LCH (Local Clearing House). EIS and LCH are owned by People's Bank of China (which is "THE" big bank owned by the Chinese government). EFT is owned by the smaller (still chinese government owned) commercial banks: Industrial and Commercial Bank of China, Agricultural Bank of China, Construction Bank of China, and Bank of China. All those dont really matter because at the retail point they all use CNAPS (China’s National Advanced Payment System).
So in an electronic wire the banks talk to their clearinghouses and the clearing houses talk to each other. The important thing for you to know in an electronic wire is where and when is the "settlement" day/time. The settlement day time determines the exchange rate, and the where determines whos exchange. That is going to determine how much money goes into your account.
Wire transfers have the benefit of reliability, security and accessibility (because the money ends up in your account which is a place you can then do something with it). The draw back though is cost (they are typically the most expensive) since you get charged by the sending bank and receiving bank. A wire transfer can cost between $20 and $50 when all the fees are paid. They also arent convenient. Since you have to go to the bank during business hours, and will also need to go during the time the foreign account representative is there. Since you will want someone who 1) speaks english 2) Knows how and can access the wire services for that bank branch. It might shock you that you can only do that at certain times of the day or week.
2) Transfer Services you know these already. Western Union, Money Gram, and PayPal. Instead of using banks directly these companies have their own network of offices and agents across the globe. You can walk into a 7-11 (yes lots of these are in china) in Beijing that acts as an agent for Western union and "send" the money to a grocery store in Florida whos a western union agent (In China Walmart/Trustmart is becoming popular for this). Costs are usually cheaper ranging as low as $7 to about $25, with the average around $15. The benefits are that its FAST, usually within 10 minutes to an hour the money is available. Its also cheaper per transaction. The disadvantages are that 1) Someone like a family member or trusted friend has to pick up the money (meaning going there, waiting in line, and then taking it to your bank and depositing it in your account). 2) The daily/transaction limits are small, usually between $300 and $1000 per transfer. Meaning if you have to have 2,500 every month to pay your mortgage and student loans. That means someone has to make 3 trips on 3 different days to pick up the money an deposit it in your account.
3) Bank by mail. Many banks in the USA including smaller state banks, credit unions and online banks offer this method though no one uses it very often. Basically, you go to your bank (or post office) in beijing and get an official check (or bank draft) put it in an envelope and mail it to your banks "Bank by Mail Address". The bank gets the check and then you wait for the check to clear, and the money is credited to your account. The benefits are that its cheap, and doesnt require someone in the states to act as your liaison. This can be the cheapest way as a bank draft cost about $1 and international postage is about $.50. The problems are that its VERY slow. First class international mail can take a month or longer to arrive. You can send it EMS or DHL if you want it to get there faster but its much more expensive (between $15-$30) and its also far less secure. Mail with money in it tends to get lost, and getting the money refunded from the chinese bank can take a long time. You also have to wait for the check to clear, which can take 10-30 days. (In all fairness I have to say Ive known people to do the bank by mail approach using cash (USD), though I wouldnt recommend it).
So basically it depends what your needs are. My advice is:
Your better off dealing with the People's Bank of China in Beijing as they just have a better work flow and relationship, with USA banks. Likewise your better off with a bigger bank in the USA (Chase, BOA, Wells Fargo, etc) then a state run bank or credit union. You want banks (USA and China) that have
1)an English speaking customer service number and preferably an international banking department. English PC/Online banking is a nice plus (in China).
2) An IBAN (International Bank Account Number) which may be different then the ABA (American Banking Association) account number, (which you see more off with smaller state banks and credit unions then the large national banks).
3) a SWIFT code. Which is used by the various clearing houses to identify various banks. This is in addition to your banks "routing number" used in the Federal Reserve American Banking System.
4) A compatible PIN number. ATM machines in China typically use 6 digit pins. Foreign machines (most of them with Peoples Bank of China) will accept 4 digit pins. Some will accept two zeros and then your 4 digit PIN. Some wont accept PINS that start with 0. You also want an ATM debit card that uses as many processors as possible, most ATMs accept Plus, Cirrus & Masestro, which are common to all the big USA banks.
5) Most people do a lot of their banking by ATM. As a foreigner the only time your likely to go into the bank to see a teller is to 1) convert currency, 2) cash travelers checks, and 3) Wire money. China is a pretty large cashed base society, and while you an use your ATM card at some stores (such as Watsons, Ren Ren Lu, Trust mart, most people use cash). You may qualify for a credit card, depends on your school and how much money you make. It will either have a low credit limit, or else you typically have to wait a year before you can apply.
6) Exchange Rates: remember when i was discussing the settlement date? You basically want to find out how soon and where the banks settle their wires. The sooner the settlement date to the transaction date the better, as the exchange rate is less likely to vary as much. Chase settles in Germany, BOA in New York. Of course you should also shop around for the lowest account fees and transfer/transaction fees.