Money transfer to Indonesia: Fees, speed, and options

Key takeaways

• Hong Kong businesses can transfer money to Indonesia via bank wire transfers, online remittance services, or a financial platform, and each option comes with different costs, speeds, and documentation requirements.

• The total cost of a transfer depends on three things: The flat fee, the FX markup above the interbank rate, and any intermediary bank charges. Understanding all three lets you compare providers properly.

• With Airwallex, 93% of transfers to Indonesia arrive the same day, with FX rates from 0.2% above the interbank rate and no account opening fees.

Hong Kong ranked as Indonesia’s 6th largest trading partner, and Indonesia holds a significant standing as a member of ASEAN and the Belt and Road Initiative. Currently, the majority of businesses in Indonesia are small and medium-sized enterprises (SMEs), with about 60% of the population aged between 15 and 64, showcasing substantial consumer potential. The demand for money transfer to Indonesia is anticipated to keep rising. This article will provide a detailed breakdown of the various remittance methods, and their associated fees and processing times.

Why use Indonesian Rupiah (IDR) for payments?

Hong Kong companies with subsidiaries or business partnerships in Indonesia often need to make cross-border transfers for various purposes, such as paying supplier invoices, payroll to local employees, or purchasing goods and raw materials. Making payments directly in IDR can help reduce foreign exchange costs and improve operational efficiency. Additionally, using local currency with Indonesian suppliers or clients can enhance trust and confidence in the partnership by leveraging the familiarity of the IDR.The potential for growth in Indonesia's e-commerce market is substantial, attracting many Hong Kong businesses. Utilising IDR for payments to local merchants or logistics companies enhances the company's localisation image. 

How to transfer money to Indonesia: 3 common methods

• Online remittances: Major traditional and virtual banks offer online remittance services so users can send international transfers via computers or smartphone apps. Simply input the recipient's information, the amount, and any other necessary details, and the bank then converts the currency using its exchange rates and applies various fees based on the transaction. While this method is highly secure, ‌FX rates are often less favourable. For SMEs that transfer frequently, these remittance costs can significantly affect ‌profits.

• Bank wire transfers: Banks offer telegraphic transfer (TT) services, allowing remitters to send funds either by visiting a bank branch in person or using online remittance services. Typically, banks use the SWIFT system to transfer money to the bank accounts of Indonesian suppliers or local companies. Bank wire transfers usually take several business days to arrive. Cut-off times matter as well. If you submit a transfer after your bank's daily processing window, it won't start moving until the next business day. 

• Airwallex: Airwallex is an all-in-one financial platform. Users can open a Business Account in just minutes and gain access to an Indonesian business account without incurring any account opening fees. Beyond offering more competitive exchange rates than traditional banks to help you save on costs, nearly 94% of transfers go through local rails instead of SWIFT, and 93% of remittances can be credited the same day, enhancing the relationships between SMEs and local suppliers or clients.

How recipients receive funds in Indonesia

When you send money to Indonesia, your recipient can receive it in a few different ways:

• Bank accounts: The most common method is through local bank account transfers. With an Indonesian bank account such as BCA, Mandiri, BRI, and others, the remitter would transfer the funds directly to that account.

• e-Wallets: Payments can also be received through Indonesian local e-wallets such as OVO, GoPay, Dana, and others. These platforms are linked to bank accounts or e-wallets, making it convenient to receive cross-border remittances.

• Airwallex Global Account: Airwallex, the all-in-one financial platform, offers Global Accounts and streamlines the process of opening an IDR corporate account under your company’s name. This account includes an Indonesian branch code and a dedicated account number so your business can receive funds from various countries or regions seamlessly.

What does a money transfer to Indonesia actually cost?

The real cost of an international transfer isn't just the fee you see upfront. There are three layers to understand, and providers don't always make them obvious.

Understanding FX markup, flat fees, and intermediary charges

Here's what makes up the total cost of a transfer:

• Flat fee. A fixed charge for each transfer, no matter how much you're sending.

• FX markup. The difference between the interbank rate and the rate you're offered. This is often the biggest cost, but it isn't always shown separately because it's baked into the exchange rate.

• Intermediary bank charges. When a transfer goes through correspondent banks, which is common with SWIFT transfers, each bank in the chain may deduct a fee. These charges can be unpredictable and often only show up when the recipient gets less than expected.

When you're comparing providers, look at all three. A low flat fee doesn't mean much if the exchange rate has a significant markup.

Comparing transfer methods

In addition to the above primary methods for sending money to Indonesia, money changers also offer remittance services. However, bank transfers come with several limitations, such as maximum transfer limits, required documentation, specific remittance details, and cutoff times. On the other hand, money changers may have inconsistent reliability and reputation, higher fees, and lower transparency, making them a less recommended option for remitting funds to Indonesia.

Airwallex stands out as a professional and secure all-in-one finance platform. Regulated by the Customs & Excise Department, it ensures high transparency in its remittance processes. Customers can easily track their remittances, and with low costs, nearly 93% of transfers arrive on the same day.

Required documentation for transfers to Indonesia

As a Hong Kong SME or wholesaler, the documents you need to prepare before making a remittance are as follows:

• Business license or Certificate of Incorporation: To prove the legitimacy of your company's operations.

• Proof of transfer purposes: Such as sales contracts or invoices for the goods being sold.

• Recipient identification: Including their identification card or business licence.

• Hong Kong bank account information: Account number, bank name, and SWIFT code.

• Completed remittance application form: Providing detailed information such as the purpose of the remittance, amount, and payer.

Not every transfer will require all of these. Smaller amounts often need less documentation. But if you're making a larger payment or sending money to a new recipient for the first time, having everything ready can speed things up.

Simplify your transfers to Indonesia with Airwallex

Want faster delivery, sharper FX, and fewer surprises? Open an Airwallex Business Account to send IDR payments via local rails, track every transfer in real time, and reduce unnecessary fees. With over 93% of transfers arriving the same day, transparent FX from 0.2% above the interbank rate, and no account opening fees, it’s a straightforward way to pay suppliers and partners in Indonesia with confidence.

FAQs

1. Is it safe to transfer money via Airwallex?

Yes. Airwalex is an all-in-one financial platform, holding a Money Service Operator License issued by the Hong Kong Customs and Excise Department ‌(Licence number: 16-09-01929). Airwallex's systems and procedures comply with the highest global security certifications, including achieving PCI DSS Level 1, SOC 1, and SOC 2 standards. During remittance, multiple identity verifications are performed for additional security.

Airwallex also has a deep understanding of compliance in each region where we operate, with lawyers and compliance officers stationed in the regions to focus on regulatory compliance and combating financial crimes.

2. Can I check the transfer progress at any time using Airwallex?

Yes, you can. Once your business remits through Airwallex, you can check the progress online at any time. Airwallex tracks payment status through webhooks and promptly detects any potential.

3. What are the restrictions for overseas or international remittances to Indonesia?

Indonesia does not have foreign exchange controls, so foreign funds can be freely remitted. However, when remitting from Hong Kong to Indonesia, restrictions are set by different banks. For example, Bank of China requires the correspondent bank recipient to provide relevant documents in order to comply with foreign exchange control and local banking regulations. If IDR is being paid to a non-resident account, and the daily transaction amount exceeds USD $1 million equivalent for each foreign payer, proof of transaction-related documents such as sales contracts and invoices must be provided by the recipient.

With Airwallex and its dedicated local payment network, businesses can conduct one-time or multiple international transfers without any minimum amount restriction, with nearly 93% of funds being credited on the same day at a low cost.

4. How does Airwallex determine the exchange rates?

Airwallex calculates exchange rates based on various factors, including market liquidity and prices from liquidity providers. Airwallex collaborates with multiple financial institutions globally, referencing the interbank exchange rates (which are the midpoint rates between the buying and selling rates in FX transactions) for 90+ trade currencies.