High fees, exchange rate uncertainty common gripes of Singapore residents sending money overseas: Survey

SINGAPORE – High fees and issues calculating exchange rates are common complaints of Singapore residents using digital channels to send money overseas, according to a recent survey. 

It found that in most Asia-Pacific markets, 40 per cent to 50 per cent of respondents indicated that they had been offered a free transfer when sending cash, cheques or money orders, only to find out there were hidden fees.

Nearly 30 per cent of respondents in Singapore said fees were too high, and 21 per cent had issues calculating the exchange rate. Meanwhile, 14 per cent said a pain point was the need to visit a physical location to send money.

Payments giant Visa surveyed nearly 45,000 remittance senders and receivers across 20 countries, including 2,500 respondents in Singapore, from December 2023 to March 2024.

Ms Adeline Kim, Visa country manager for Singapore and Brunei, said the problem for remitters is twofold: Fees are high, and there is a lack of transparency.

“That 1 per cent or 2 per cent that a foreign domestic worker ends up paying could actually be quite significant for them... Exchange rates could also be opaque. It’s quite easy to do a Google search today and compare that exchange rate to what the remittance provider is charging you,” she told a briefing on July 10.

Nearly 70 per cent of Singapore residents surveyed prefer to send money via digital apps, and 45 per cent said they use digital channels but from a physical location. DBS, PayPal, Western Union, Paysend and Wise were the top five payment providers used for sending money in Singapore. 

In many countries, the entry of fintech players is spurring traditional financial institutions to reinvent themselves and improve in areas such as transparency, security and the cost of transfers, said Ms Kim.

Singapore’s large foreign workforce and its market’s diverse financial transactions support the growth of international money movement from the country, she added. “Besides the foreign workforce sending back money to their families, we are also seeing growth in the creator economy, where money is paid from social platforms to content creators.”

More than 85 per cent of Singapore residents surveyed send money abroad at least once a year, with about 40 per cent doing so once a month or more. Half of the residents surveyed sent $1,500 or more to another country in 2023. 

The

top five places residents sent money to were China,

Australia, Canada, Malaysia and Japan, noted the survey. Travellers’ use of multi-currency wallets fuelled transfers to Japan.

Nearly 25 per cent of Singapore residents surveyed plan to send more than $13,000 in 2024, likely for education. “Across the Asia-Pacific, this is one of the highest amounts in remittance spent within a year,” said Ms Kim.

Regular remittances – for example, to support family living abroad – and meeting unexpected needs were the two biggest forces driving money transfers abroad of Singapore residents surveyed. These were followed by transfers to remitters’ own accounts or for investments.

Helping others in need was also a key reason why residents here transfer funds overseas. Nearly 50 per cent of those who send money to improve future prospects said they found it important to support the lives of people in crisis, and were also providing economic resources to their native countries.

Meanwhile, residents here received money from overseas mainly from their own accounts and for investments, and during special occasions and holidays.

Reasons for remittances vary between countries. For example, in China and India, about a quarter of respondents surveyed said they sent money to improve future prospects, higher than all other Asian markets.

Visa has seen a twofold increase in digital remittances in the region over the last two years. In terms of the frequency of remittances, 99 per cent of respondents in China sent money at least once a year, followed by India and Singapore, both at 86 per cent.

Digital apps were the top choice for sending and receiving money, followed by digital remittances from a physical location. Roughly three-quarters of remittance users in India, the Philippines, China and Singapore have used an app-based digital payment method to send or receive money internationally.

Convenience and safety seem to be at the top of people’s minds when it comes to moving money, especially in the Philippines, India and Singapore.