Large transfers: an overview to the procedures, limits, time needed and handling fees

Kirstie Lau3 min
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Large transfers: an overview to the procedures, limits, time needed and handling fees
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Businesses often have to transfer large sums of money or send payments to different recipients together in one transaction (i.e. batch transfer) when paying overseas suppliers. However, as every bank typically imposes transfer limits, businesses may have to make separate applications if they have to make large transfers to a single account within a day. This article will walk you through the procedures and limitations of large transfers, as well as the time and fees required.

Large transfer limits of local banks

Local banks usually set two different daily limits on the total amount of money to be transferred to non-registered and registered payees. Users can adjust the amount of the limits through online personal banking services. Those who have to remit money to overseas accounts should also take note of banks’ limits on telegraphic transfers. Here’s a summary of the online transfer limits of a few major local banks:

Registered payees Non-registered payees
HSBC HK HK$3,000,000 HK$400,000
Bank of China (Hong Kong) HK$1,000,000 HK$400,000
Standard Chartered Hong Kong HK$1,000,000 HK$300,000
Hang Seng Bank HK$1,500,000 HK$400,000

*As of 23 March 2024. Information provided is for reference only. Please refer to the official bank websites for the most up-to-date details.

What’s the difference between large value and small value transfers?

Before the emergence of the “Faster Payment System” (FPS), Small Value Transfer Services were in place in banks to ensure the security of accounts by imposing a daily maximum transaction limit. But after the launch of FPS, some banks have replaced their Small Value Transfer Services with “Non-registered Payees Transfers”, while some still maintain the service, which allows payments to non-registered payees without the need to undergo additional security verification procedures for each transaction.

If a user wants to increase the daily transfer limit of the Small Value Transfer Service beyond that of “Non-registered Payees Transfers”, he/she will have to register the information of the payee, including bank account number, mobile phone number, FPS identifier, email address and credit card number. Once registered, the transfer limit can be increased.

Default transfer limits of local banks

The default transfer limits for local bank transfers refer to the maximum daily total transfer amount. Users can adjust the limit by applying through online banking services.

Setting limits for large transfers

Setting limits for large value transfers is comparatively complex. If a payer is transferring online, he/she will first have to register the payee. Then go to the transfer settings of the online banking platform, select the settings of large value or “registered payees” transfers and then adjust the limit.

Things to consider for large-value interbank transfers

Maximum limits are imposed for online large-value interbank transfers. If the anticipated transfer amount exceeds the default limit, the payer should register the payee in order to increase the transfer limit. If the newly set limit is still insufficient, the payer may have to split the transfer into multiple transactions, which could increase administrative costs for businesses. In such cases, the payer may consider handling the transfer physically at branch offices using promissory notes or money orders.

Challenges in remitting funds to overseas suppliers

Remitting funds to overseas suppliers through bank telegraphic transfers often involves complex procedures. The remitter has to fill in the information of the recipient (such as bank identifier code, local bank code or international bank account number). Additional information may be required depending on the destination country. Countries like mainland China, Egypt, India and Malaysia require the remitter from overseas to specify the purpose of the remittance.

Other than major banks, some overseas banks (intermediary banks) may also charge fees, which could be deducted from the remittance or paid by the recipient. The cost varies according to whichever overseas bank is chosen by the remitter. 

Large wholesale payments and urgent high-value payments

When wholesalers collaborate with overseas suppliers, they often purchase goods in bulk to save on transportation costs. However, various forms of transfer, amount restrictions, and time limitations often require early and multiple payments, resulting in time-consuming and inconvenient processes.

Placing orders and making large transactions with wholesale suppliers

Due to the time and monetary costs of transportation, businesses usually place orders in bulk with overseas suppliers. If the transfer amount exceeds the daily remittance limit, the payment may have to be split into multiple transactions on different days, or handled at branch offices using money orders.

Handling fees of bank transfers

Telegraphic transfer fees vary depending on whichever bank is chosen for the remittance. Major local banks charge a fixed handling fee ranging from HK$50 to HK$200. However, as foreign exchange rates of local major banks are higher than the interbank rates, it usually indirectly results in higher handling fees for larger remittance amounts.

Uncertainty factor: Same-day crediting

It is generally difficult for bank transfers to be credited immediately on the same day. It takes up to 5 working days from the application of the remittance to crediting.

Third-party large value transfer platforms

The Faster Payment System (FPS) is a cross-bank electronic payment platform launched by the Hong Kong Monetary Authority in 2018. All bank account holders can register as an FPS user using their phone number, email address and Faster Payment System Identifier (FPS ID). However, FPS currently doesn’t support overseas transfers. Businesses that have to remit funds to overseas suppliers still have to rely on other third-party large value transfer platforms, such as Airwallex.

With an Airwallex Business Account, you can remit with over 60 different currencies to more than 150 countries and regions. The global account allows you to seamlessly make and collect payments in your preferred currency. When making a transfer on the platform which maintains high security standards, the remitter has to fill out the information of the payee such as bank account number. The platform can complete the remittance as quickly as 1 working day, ensuring safety, efficiency and zero hidden charges.

Cross-bank transfers Airwallex
Exchange rate Determined by each bank, generally higher than interbank exchange rates Interbank exchange rate for 60+ currencies to 150+ regions
Handling fees Ranging from HK$50 to HK$200, additional fees may apply for telegraphic transfers involving intermediary banks 0.2% above the interbank exchange rate (no additional remittance fees or intermediary bank charges)
Transfer speed 1 - 5 working days As quickly as 1 working day
Open a global multi-currency account for free in Hong Kong

FAQs

Are there tax implications for large transfers to overseas suppliers?

Depending on the country or region of the supplier, importers may be required to pay value-added tax (VAT) and other consumption taxes when making payments to overseas suppliers. As import tax rates vary across countries and regions, importers should confirm the corresponding rate before making a payment. If the overseas supplier is registered for China’s business tax special invoice, the VAT can be exempted.

Do I have to provide my tax identifying number for large transfers?

Depends on the transfer platform. It is common that a tax identification number is required if a large transfer is made to an overseas supplier. It is not necessary when a large transfer is made to a local company.

Is there foreign exchange rate risk in large transfers?

Yes, some third-party transfer platforms usually charge a fixed percentage added to the foreign exchange rate, while the calculation of bank exchange rates is also linked to the interbank exchange rate. When the transfer amount increases, the handling fees may increase due to fluctuations in the interbank exchange rates. Therefore, remitters should pay attention to the exchange rate when making a transfer to minimize losses resulting from currency exchange.

Is there a risk to fund safety in large transfers?

If the transfer shall be conducted online, the remitter is suggested to use a third-party transfer platform with high security standards. He/she should also double-check that the information of the payee, such as bank account numbers, is accurate before confirming the transaction.

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Kirstie Lau
Senior Associate, Growth Marketing

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