USD accounts and payments: efficiently and swiftly transfer funds to the United States

Kirstie Lau3 minutes
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USD accounts and payments: efficiently and swiftly transfer funds to the United States
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The US dollar (USD) serves as a widely accepted international currency for cross-border transactions. In the past, people typically relied on traditional methods, such as banking services or remittance institutions, to send money from Hong Kong to the United States (US). However, with the rapid evolution of the global market, it has become crucial for businesses to grasp the knowledge of promptly and effectively remitting funds to the US in order to seize overseas opportunities in international trade and cross-border commerce.

Requirements and uses of USD accounts

Apart from conventional banks, many virtual banks now offer services for opening foreign currency accounts. Additionally, most corporate accounts in Hong Kong banks also allow for foreign currency transactions and management.

Taking the opening of a commercial bank account as an example, applicants are required to provide identification documents, proof of address, a valid Business Registration Certificate, along with other relevant documents based on the type or the company (such as sole proprietorship, partnership, or Hong Kong-registered limited company). For commercial bank accounts, certain banks may have minimum deposit requirements.

USD accounts allow businesses or individuals to store, manage, and transact in US dollars directly, eliminating the need for currency conversion into other currencies. This reduces the risk associated with fluctuating market exchange rates. For businesses that operate in multiple regions and  frequently deal with international trades, an USD account streamlines the payment processes and enhances the efficiency of fund utilization.

Types of remittance that uses USD as payment

1. Remittance with USD as the source currency

Remittance with USD as the source currency refers to the transfer of funds from one account (such as business or personal account) to another, where the funds are denominated in USD. This form of remittance typically involves international or cross-border transfers and is commonly used for service payments and trades related to USD.

Thanks to the widespread acceptance of USD in the international financial market, this remittance method effectively addresses currency conversion challenges across countries, making fund transfers more convenient. It is important to note that transfers with USD as the source currency may be affected by fluctuations in the foreign exchange market and exchange rate, which can result in additional costs such as currency conversion fees or bank charges.

2. Remittance with USD as the target currency

Remittance with USD as the target currency refers to the process of converting the source currency (such as Chinese Yuan, Euro, or other currencies) into USD and then transferring it to a designated USD account. This method of remittance is primarily used for cross-border transactions, especially in cases where there is a need to make payments in USD or transfer funds to the US. However, it is important to note that there may be exchange fees involved, and the transaction is subject to regulation by local banks and laws.

Precautions for making payments and remittances in USD to the US

  • Legal and related procedures

There are no specific foreign exchange controls in the US. Businesses can transfer funds legally as long as they adhere to the relevant laws and regulation of the US and local remittance banks.

  • Information of the recipient

Before making a remittance, it is crucial that you have the recipients’ account name, account number, address, the name of their bank, and its associated SWIFT code.

  • How long does remittance usually take?

Traditional wire transfers often take longer and are subject to the operating hours and cut-off times of both banks involved. Typically, this process takes anywhere from 1 to 5 business days.

  • Canceling a remittance and refund

While it is possible to cancel remittances in principle, it's important to note that transaction fees are typically non-refundable and additional cancellation fees may apply. On top of that, certain banks specify that the success of a remittance cancellation request depends on the status of the transaction and the processing conditions of the recipient bank.

  • Maximum amount for remittances to the US (commercial account vs. personal account)

Banks commonly set transfer and remittance limits for security reasons. If you need to make frequent cross-border transfers or send large remittances, it is recommended to pre-register the recipient's account with the bank and increase your remittance limit. Typically, commercial accounts have higher transfer limits compared to personal accounts.

Common ways to transfer money to the US

1. Wire transfers

Sending money to the US via bank wire transfers is one of the most popular methods. These transfers rely on the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system, which allows banks to facilitate the process. By providing the unique SWIFT code of each bank involved and paying the required fees, funds can be electronically transferred to the US. Additional charges may apply if intermediary banks are involved in the transaction.

2. Automated Clearing House (ACH)

ACH is a cost-effective payment method widely utilised in the US.  It serves both as a means of receiving funds (ACH Credit) and making payments (ACH Debit). When businesses opt for ACH transfers through a local bank account in the US or through electronic payment tools, funds are directly credited from the company's bank account and debited to the recipients’ bank account.

3. Airwallex

By choosing Airwallex, businesses can instantly open a USD account online in Hong Kong. The process is simple, with no registration fees or monthly charges. Airwallex Global Account empowers you to send and receive USD and other foreign currencies at any time, from anywhere. 

With the balance in your account, you can effortlessly make USD transfers, eliminating unnecessary currency conversion fees and remittance charges. Furthermore, you can hold onto foreign currency funds until it reaches your desired exchange rate before converting them into local currency, thereby maximising your profits.

Open a global multi-currency account for free in Hong Kong

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Kirstie Lau
Senior Associate, Growth Marketing

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