VietNamNet Bridge – Overseas Vietnamese now tend to remit money to their relatives in Vietnam through unofficial services rather than via banks.

Having been living and working in Hiroshima, Japan, for the last many years, Dinh Xuan Luong from Nghe An Province felt no surprise upon hearing that a Vietnamese had been arrested by the Japanese police for illegal money remittance.

“A remittance ring was discovered last year, and another the year before,” he said.

“Third-party remittance” is a service quite familiar to Luong and many other Vietnamese in Japan. The third parties are those who provide illegal remittance services. They could be individuals or organizations with branches in different localities.

“What would you prefer: third-party services, with simple procedures, low service fees and reliable quality, or bank services, which always require high fees and complicated procedures?” Luong asked.

“Third-party services, therefore, have become very preferable,” he explained, adding that the 200 Vietnamese workers at the factory where he works now remit an estimated VND2 billion to their relatives in Vietnam every month. And he believes that most of them have been using the black market service.

When Luong wants to remit money to his wife in Vietnam, he calls a “third party” he knows. Someone from the remittance ring in Hanoi comes to see his wife in Nghe An Province, and gives her the specified sum of money. Only after the wife confirms that she has received the money, does Luong have to pay the third party in Japan.

The “third parties” are very professional. They do not fear that they cannot get back money from Luong, because they know where Luong works and where his family members live.

When asked how Luong can find reliable “third parties”, he said numerous ads on the remittance services can be found on Internet. He also does not worry about being swindled, as he only needs to pay the service after his wife in Vietnam receives the money.

It is understandable why Vietnamese prefer the illegal service to legal ones. Foreign banks always charge very high service fees. A Japanese bank, which cooperates with many Vietnamese banks, charges 1,000 yen in service for transferring anywhere from 1,000-30,000 yen. As such, the fee is 3.3 percent if customers remit 30,000yen, while it works out to a 100 percent charge for a customer transferring only 1,000 yen.

In other countries, such as Australia, the UK and Russia, professional licensed service providers charge 4-7 percent.

“These are overly high service fees for us, the small merchants,” said Ngoc Lan, a trader in Germany. “We cannot make a profit if using their services”.

Meanwhile, illegal services are much cheaper. Luong said in Hiroshima, where he lives, third parties collect VND20,000 for every sum of 10,000 Yen to be remitted, which is about one percent.

In South Korea, the fee is 10,000-30,000 won for every $1,000 to be remitted, or 0.9-2.8 percent.

Luong believes that, even in countries where the gap between legal and illegal service fees is not large, Vietnamese also prefer “third parties”, because they do not want to waste time proving their sources of money are legal.

VNE