Chinese migrant workers are using Singapore banks to send money home after a crackdown by Beijing last year affected transfers handled by some remittance firms here.
DBS Bank and OCBC Bank say remittances to China surged around 60 per cent or more in the first two months of the year, compared with the same period in 2023.
UOB did not give details on China transfers but noted that digital remittances to its top five destinations and China "experienced double-digit growth" in the first quarter of 2024.
The crackdown reportedly froze around 670 remittances totalling $13 million made from an undisclosed number of firms here, including Samlit Moneychanger.
It is not clear if all the funds have since been released by the Chinese authorities.
The affected transfers were made by remittance companies that engaged third-party agents instead of banks to keep transaction costs low.
The Monetary Authority of Singapore (MAS) said in December 2023 that the 670 cases represent "a very small proportion" of remittances to China, but it suspended the use of such non-bank and noncard channels from Jan 1 to March 31, 2024 to minimise risks to consumers.
The measure worked, with the MAS noting on March 27 that there have been no new reports of frozen remittances since Jan 1. However, it has extended the ban until Sept 30.
This means transfers must still be done through banks or card network operators like UnionPay International.
Licensed payment service providers and remittance agencies can also remit money to China if they do so through a bank or a card network operator.
Remittance agencies say there has been some confusion among their customers who thought they could not use these remittance companies to send money home.
Mr Jed Huang, chief executive of Zhongguo Remittance, said licensed players can carry out transfers, but they must abide by MAS regulations and send the money through bank and card channels.
Customers can see if their remittance agent is licensed by checking the directory of the Remittance Association Singapore, which lists all licensed players.
While there are around 80 licensed remittance companies, many Chinese workers "do not dare to go to these agencies now", said a Chinese worker in her early 40s who has been employed in Singapore for 20 years.
The woman, who spoke to The Straits Times on condition of anonymity, said she went to a remittance agency because she felt more secure entrusting her money transfers to someone who spoke Mandarin, as she does not know English.
Remittance agencies also offered more favourable exchange rates than banks, she added. "The difference was as much as 10 cents to 20 cents (for every $1 exchanged)." The woman made the switch to DBS after her funds were frozen for a week last year.
She found the process daunting at first, but it became easier after a visit to a DBS branch to set up her account.
A Chinese expatriate in her late 50s, who wanted to be known only as Madam Zhou, said she always sends money via DBS because "this is the easier and safer way".
Madam Zhou typically sends "less than $10,000" whenever she remits money home, usually a few times a year.
She acknowledged that bank exchange rates are not as favourable as those offered by money changers, but this mode gives her peace of mind.
Chinese workers and expatriates can remit money with DBS Remit on the bank's app to a recipient's bank account in China or Alipay Wallet.
Ms P'ing Lim, regional head for ecosystem and cross-border transfers at DBS Consumer Banking Group, said remittances home from the bank's Chinese migrant worker customers more than doubled in the first two months of 2024, compared with the same period a year ago.
Money transfers by these workers comprised about half of the total volume of all remittances to China.
Ms Lim added that total remittanc...
DBS Bank and OCBC Bank say remittances to China surged around 60 per cent or more in the first two months of the year, compared with the same period in 2023.
UOB did not give details on China transfers but noted that digital remittances to its top five destinations and China "experienced double-digit growth" in the first quarter of 2024.
The crackdown reportedly froze around 670 remittances totalling $13 million made from an undisclosed number of firms here, including Samlit Moneychanger.
It is not clear if all the funds have since been released by the Chinese authorities.
The affected transfers were made by remittance companies that engaged third-party agents instead of banks to keep transaction costs low.
The Monetary Authority of Singapore (MAS) said in December 2023 that the 670 cases represent "a very small proportion" of remittances to China, but it suspended the use of such non-bank and noncard channels from Jan 1 to March 31, 2024 to minimise risks to consumers.
The measure worked, with the MAS noting on March 27 that there have been no new reports of frozen remittances since Jan 1. However, it has extended the ban until Sept 30.
This means transfers must still be done through banks or card network operators like UnionPay International.
Licensed payment service providers and remittance agencies can also remit money to China if they do so through a bank or a card network operator.
Remittance agencies say there has been some confusion among their customers who thought they could not use these remittance companies to send money home.
Mr Jed Huang, chief executive of Zhongguo Remittance, said licensed players can carry out transfers, but they must abide by MAS regulations and send the money through bank and card channels.
Customers can see if their remittance agent is licensed by checking the directory of the Remittance Association Singapore, which lists all licensed players.
While there are around 80 licensed remittance companies, many Chinese workers "do not dare to go to these agencies now", said a Chinese worker in her early 40s who has been employed in Singapore for 20 years.
The woman, who spoke to The Straits Times on condition of anonymity, said she went to a remittance agency because she felt more secure entrusting her money transfers to someone who spoke Mandarin, as she does not know English.
Remittance agencies also offered more favourable exchange rates than banks, she added. "The difference was as much as 10 cents to 20 cents (for every $1 exchanged)." The woman made the switch to DBS after her funds were frozen for a week last year.
She found the process daunting at first, but it became easier after a visit to a DBS branch to set up her account.
A Chinese expatriate in her late 50s, who wanted to be known only as Madam Zhou, said she always sends money via DBS because "this is the easier and safer way".
Madam Zhou typically sends "less than $10,000" whenever she remits money home, usually a few times a year.
She acknowledged that bank exchange rates are not as favourable as those offered by money changers, but this mode gives her peace of mind.
Chinese workers and expatriates can remit money with DBS Remit on the bank's app to a recipient's bank account in China or Alipay Wallet.
Ms P'ing Lim, regional head for ecosystem and cross-border transfers at DBS Consumer Banking Group, said remittances home from the bank's Chinese migrant worker customers more than doubled in the first two months of 2024, compared with the same period a year ago.
Money transfers by these workers comprised about half of the total volume of all remittances to China.
Ms Lim added that total remittanc...
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The Straits Times (Digital) - 1 Issue, May 03, 2024