Coinbase (wire transfer)

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You work in China, and get paid in Chinese currency pennies chart.  So how do you send US dollars in your bank account back home quickly and cheaply?

Short answer: PayPal, with Bitcoin running a close second.

Longer answer: keep reading.

Using myself as a real life example. here are the options, ranked from most expensive to least.

  • Bank wire transfer: $15-30 in fees, 2-3 business days for final credit
  • Western Union transfer: basically the same
  • Withdraw cash from an American ATM, using Chinese bank debit card: $7-10 in fees, very quick, but requires physical presence in the USA at the time
  • PayPal: 4% in fees, two websites, 1-2 business days for final credit
  • Bitcoin: 1-2% in fees, three to four websites, 3-4 business days for final credit

The hands-down winner in my case has been #4 for the last four years. Today I tried #5, to test one of the presumed advantages of Bitcoins and similar crypto-currencies — that they make moving money across national borders easy and cheap.

But, if speed is not an issue, the volatility of Bitcoin prices relative to fiat currencies can offer an advantage PayPal cannot.

Bank wire transfers

My contract allows me to take 70% of my monthly pay out and send it home. When I first came to China, the only option I had was to wire money from my Chinese bank to my American bank. It was a laborious process, requiring me to fill out a long form and to have a Chinese resident present to facilitate the exchange and transfer. A Chinese national ID is necessary for wire transfers, at least at my bank here in Jishou.

I had to transfer money from my account to my Chinese friend’s account. Next, it would be converted to dollars in the bank’s computer system and then wired via SWIFT to my US account. The wire fees were $30 total ($15 at each end), and the money took about 2-3 business days to land in my US account.

The whole process was a bit of a pain. It would take about 30 minutes to complete, and I had to drag along a Chinese friend to the bank each time.

I found another way, as you will see.

Western Union

My bank in the USA does not accept Western Union wire transfers, so for bank-to-bank transfers, Western Union is not an option.

For the sake of comparison, I checked online for their fees. Sending $300 (about 1800 RMB) would cost about $15 (90 RMB). Here’s a table from the Western Union-China website showing the fee schedule.

Two banks in China allow you to send Western Union transfers using online banking. Mine is not one of them. The fees are the same, no matter how you send the money, so there is no financial advantage to using online Western Union services in China.

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