Estimated reading time: 9 minutes
Sending money to Vietnam can be a complex task, especially for expats. With a wide range of options available, it is essential to consider various factors when choosing the right service. With the evolution of digital apps and fintech, international banking has entered a new era. This article aims to compare and detail the foreign services provided by Xoom, Wise, Remitly, Western Union, Bunq, and Instarem. Additionally, it will describe the services offered by Vietnamese companies. By exploring these options, we can determine the best way for expats and Vietnamese citizens to send money to Vietnam.
Money Transfer Services for Expats
When comparing foreign services, several factors come into play, including exchange rates, fees, transfer speed, and reliability. Let’s take a closer look at the services offered by each company.
This is part 2 of a 2 part series on transferring money in and out of Vietnam.
Xoom: Xoom, a Paypal service, is a popular option for sending money to Vietnam. They have partnerships with Vietcombank and various jewelry shops, allowing recipients to withdraw money by presenting a code along with their passport. Xoom’s service provides convenience and flexibility, making it a viable choice.
Wise (formerly TransferWise): Wise is renowned for its competitive exchange rates and low fees. It offers fast and secure transfers to Vietnam, ensuring that your money reaches its destination promptly. Wise is widely trusted for its transparency and reliability.
Remitly: Remitly is another popular choice for sending money to Vietnam. They offer competitive exchange rates and a user-friendly platform, making it easy to transfer funds. Remitly also provides different delivery options, including direct deposit and cash pickup.
Western Union: Western Union is a well-established company with an extensive network worldwide. They offer multiple options for sending money to Vietnam, including bank transfers, cash pickups, and mobile wallet deposits. Western Union’s wide accessibility makes it a convenient choice for many.
Bunq: Bunq is a digital bank that offers international money transfers. While their services are not specifically tailored to Vietnam, they provide a reliable platform for sending money globally. Bunq is known for its innovative features and user-friendly interface.
Instarem: Instarem is a digital cross-border payments platform that offers competitive exchange rates and low fees. They provide secure and quick transfers to Vietnam, making it a suitable option for sending money.
These services can also be useful for Vietnamese citizens. Andy, a Vietnamese citizen from Ho Chi Minh City, explains how he takes advantage of Xoom: “My relatives send me money from time to time via Xoom service. Xoom has some agreement with Vietcombank and some jewelry shops. They send me a code. With it and my passport, I can go and withdraw money at a VietcomBank counter or at the jewelry shops.”
Vietnam money transfer services
Apart from these foreign services, there are local Vietnamese providers that offer their own unique services:
Momo: Momo is a popular mobile wallet in Vietnam that allows users to transfer money to other individuals, pay bills, and make online purchases. It provides a convenient way to send money domestically within Vietnam.
VNPT: VNPT is a leading telecommunications company in Vietnam that offers various financial services, including money transfers. Their services are widely used within the country, providing a reliable option for local money transfers.
Napas: Napas is the National Payment Corporation of Vietnam, responsible for facilitating electronic payments in the country. While not solely focused on money transfers, Napas plays a crucial role in enabling secure and efficient transactions within Vietnam.
Vietnam Banks and Money Transfer Risks
Vietnamese banks have certain measures in place to monitor the transfer of money into Vietnam. These measures are primarily aimed at ensuring compliance with regulations, preventing money laundering, and maintaining financial stability. Here are some ways Vietnamese banks monitor money transfers into Vietnam:
Anti-Money Laundering (AML) Regulations
Vietnamese banks adhere to strict AML regulations to detect and prevent money laundering activities. They implement Know Your Customer (KYC) procedures, requiring customers to provide identification documents and information about the source of funds. Banks also conduct risk assessments and employ transaction monitoring systems to identify suspicious activities.
Vietnamese banks are required to report large or suspicious transactions to the authorities. The State Bank of Vietnam (SBV), the country’s central bank, sets thresholds for reporting cash transactions and electronic transfers. Banks submit transaction reports to the Financial Intelligence Unit (FIU) of Vietnam, which analyzes the data and investigates potential cases of financial crime.
Vietnamese banks collaborate with international financial institutions and comply with international standards to combat money laundering and terrorist financing. They exchange information with foreign counterparts and cooperate in investigations related to cross-border transactions.
Cross-Border Transfer Monitoring
Vietnamese banks closely monitor cross-border transfers, especially larger transactions. They verify the legitimacy of funds and scrutinize the purpose of the transfer. Banks may request supporting documents or additional information to ensure compliance with regulations.
Vietnamese banks adopt a risk-based approach to monitor money transfers. Higher-risk transactions or customers undergo enhanced due diligence procedures, which may involve additional verification steps and documentation requirements.
Vietnamese banks leverage technological solutions, such as transaction monitoring systems and artificial intelligence, to analyze patterns and detect potential suspicious transactions. These systems can flag unusual activities or transactions that deviate from established patterns, prompting further investigation.
Cooperation with Regulatory Authorities
Vietnamese banks work closely with regulatory authorities, including the SBV and FIU, to stay updated on regulatory changes and receive guidance on compliance. Regular audits and inspections are conducted to ensure banks are adhering to the prescribed rules and regulations.
It is important to note that the specific monitoring practices may vary among different banks and financial institutions in Vietnam. Additionally, regulations and monitoring practices are subject to change as authorities adapt to evolving financial crime risks and international standards.
If you require more detailed information on the specific monitoring practices of Vietnamese banks, reach out to the State Bank of Vietnam or individual banks directly for the most up-to-date and accurate information.
Using Bitcoin in Vietnam
The use of Bitcoin and other cryptocurrencies in Vietnam is a topic that has evolved over time. Let’s explore the current state of Bitcoin usage in Vietnam:
The State Bank of Vietnam (SBV), the country’s central bank, does not recognize Bitcoin and other cryptocurrencies as legal tender. In 2018, the SBV issued a statement declaring that cryptocurrency-related activities, including issuance, distribution, and use for payments, are not legally recognized and may be subject to penalties.
Despite the lack of legal recognition, cryptocurrency exchanges have operated in Vietnam. However, in April 2018, the Vietnamese government enacted regulations that required cryptocurrency exchanges to register with the authorities and comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements. This move aimed to enhance transparency and prevent illicit activities.
While not legally recognized, cryptocurrency trading has taken place in Vietnam through peer-to-peer platforms and international exchanges. Vietnamese individuals and entities have been involved in trading Bitcoin and other cryptocurrencies, often using online platforms and over-the-counter (OTC) transactions.
As cryptocurrencies are not considered legal tender, their use for everyday transactions, such as buying goods and services, is limited in Vietnam. Traditional fiat currencies, primarily the Vietnamese Dong (VND), are the accepted means of payment within the country.
The Vietnamese government has issued several warnings about the risks associated with cryptocurrencies. These warnings emphasize the speculative nature of cryptocurrencies, potential price volatility, and the lack of legal protections for users. The government advises caution when engaging in cryptocurrency-related activities.
While cryptocurrencies face regulatory restrictions, there is growing interest in the underlying blockchain technology in Vietnam. The government has acknowledged the potential of blockchain for various sectors, including finance, supply chain management, and government services. Initiatives exploring blockchain technology and its applications have emerged in the country.
It is important to note that the situation regarding cryptocurrencies can evolve, and regulations may change over time. If you are interested in using or investing in cryptocurrencies in Vietnam, it is advisable to stay updated on the latest legal and regulatory developments and seek guidance from legal and financial professionals who are knowledgeable in this area.
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So, What is the Best Way to Send Money to Vietnam?
Determining the best way to send money to Vietnam depends on various factors, including cost, convenience, speed, and reliability. Here are some popular options to consider:
- International Money Transfer Services: Services like Wise (formerly TransferWise), Xoom, Remitly, and Instarem offer competitive exchange rates, low fees, and fast transfers. They provide user-friendly online platforms or mobile apps for easy money transfers to Vietnam.
- Bank Transfers: Transferring funds directly from your bank account to a Vietnamese bank account can be a reliable option. However, banks often charge higher fees for international transfers, and exchange rates may not be as favorable as specialized money transfer services.
- Online Payment Platforms: Platforms like PayPal and Skrill allow you to send money internationally, including to Vietnam. These platforms provide ease of use and can be convenient if both the sender and recipient have accounts.
- Cash Pickup Services: Companies like Western Union and MoneyGram offer cash pickup services in Vietnam. The sender can initiate a transfer online or at a physical location, and the recipient can collect the funds in cash from designated pickup points in Vietnam.
- Mobile Wallets: Mobile wallet services such as Momo and VNPay are popular in Vietnam and allow for domestic money transfers. These wallets often offer additional features like bill payments and online purchases within Vietnam.
When deciding the best option for sending money to Vietnam, it is essential to consider the following:
- Exchange Rates: Compare the exchange rates offered by different providers to ensure you get the most value for your money.
- Transfer Fees: Consider the fees associated with each service. Some providers offer lower fees or even fee-free transfers for certain transactions.
- Transfer Speed: If speed is crucial, look for services that offer fast transfers, typically within minutes or a few business days.
- Convenience: Consider the convenience factor, such as the availability of online platforms, mobile apps, or physical locations for initiating transfers.
- Safety and Security: Opt for reputable and regulated service providers to ensure the security of your funds and personal information.
- Customer Support: Consider the availability and quality of customer support in case you encounter any issues during the transfer process.
It is recommended to compare multiple options, taking into account the specific transfer amount and your individual requirements. This way, you can choose the service that offers the best combination of cost-effectiveness, convenience, and reliability for your needs.
Please note that exchange rates, fees, and service availability may change over time, so it is advisable to check the latest information from the service providers directly before making a decision.