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Send Money To Indonesia

Indonesia is the largest country in South East Asia, with a sizable part of its population working and living abroad.  Migrants come from with villages as remote as East Lombok, one of the districts in eastern Indonesia with a high dependency on remittances.

Most of the overseas Indonesians live and work in Malaysia (35%). Others are in Saudi Arabia, UAE, Singapore, Bangladesh, Netherlands, Australia and other countries around the world. Current data from the Indonesian National Agency for the Protection and Placement of Migrant Workers (BNP2TKI) puts the number of migrant Indonesian workers at 4.5 million.

A majority of the emigrants work in the domestic sectors in the respective host countries and close to 70% of them are women. The families they have left behind are mostly subsistence farmers who depend hugely on remittances especially when their crop fails or disasters hit.

In 2017, a total of $8,997 million was sent to Indonesia. Close to 40% of this came from Saudi Arabia, 25% from Malaysia, and 8.6% from the United Arab Emirates. Despite the crucial role diaspora remittances play, the World Bank established that many migrant workers still use risky channels to send money to their families. Part of the reason is that most of them are now aware of the formal remittance service providers available.

This guide seeks to shed light on the various formal channels Indonesians in the diaspora can use to send money home, the information they need, and the crucial factors to bear in mind when sending money home. For this and more, let’s dig in.

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How To Send Money To Indonesia

Sending money to Indonesia is simple and easy. Follow these steps to get started.

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Sign Up and Deposit

Sign up with the provider and deposit the amount you want to transfer.

Transfer Money

As soon as you're ready, you can start sending money online.

Ways To Send And Receive Money In Indonesia

There are multiple ways to easily send and receive money in Indonesia but these will largely depend on the provider you decide to use. Below you will find everything you need to know about sending and receiving money. 

Sending Money To Indonesia
Receiving Money In Indonesia

Ways to Send Money to Indonesia

Instead of sending money through account mediators, there are formal ways you can transfer funds to your family back home. What is even more attractive is that these channels cost less, are secure, and take lesser time to get your money across.

As part of Project Greenback 2.0. initiated by the World Bank, several sector players such as Indonesia’s Central Bank, BNP2TKI, Indonesian Financial Service Authority (OJK), and local governments have come together to promote formal remittance channels. Below are the ways you can send money to Indonesia.

International Wire Transfers

Indonesia has 115 commercial banks that are fully licenced under the Banking Act to participate in the payment system. Rural banks are about 1,620 but are restricted as to the type of transactions they can execute. As long as the recipient has an account with a bank that can handle international transfers, you can directly deposit to their account.

Apart from international banks such as the Bank of Tokyo Mitsubishi, HSBC, Standard Chartered Bank, Citibank, PT Bank Commonwealth, and the big national banks, transfers to other banks in Indonesia may take a much longer time. This is caused by several factors among them the intermediary banks involved in the delivery of the funds.

Wire transfers can take anywhere between 3 to 5 days to get to the recipient accounts. In most cases, fees are paid by the sender, but in some cases, the recipient may be charged landing fees by the receiving bank.

The rate of financial inclusion in Indonesia is estimated at 65%. However, disaggregated data shows that many people living in rural areas in provinces such as West Nusa Tenggara, hardly access formal banking services.

Online Money Transfer Services

As a member of G20, Indonesia is a key supporter of the initiative to cut down on remittance cost to 5%. As the remittance market becomes attractive, lots of money transfer service providers are setting up shop in Indonesia.

In October 2016, Transferwise launched in Indonesia, allowing its customers worldwide to send money directly to Indonesian rupiah (IDR)-denominated bank accounts.

In December 2016, WorldRemit and Xpress Money entered into a partnership to offer instant cash pickup transfers in the country. Together, they have over 11,000 cash pickup locations in Indonesia, thanks to their partnership with Bank Rakyat.

Towards the end of May 2018, Transfast partnered with POS Indonesia, the country’s postal service, to offer money remittance services to Indonesia for the millions of its diaspora customers.

Others money transfer services such as Xoom, OFX and WorldFirst also provide online money transfer services to Indonesia. These providers are usually fast, affordable, and secure. All you need is to sign up for a transfer account, input the recipient’s details, pay for your transfer using a debit, credit, or direct bank debit and send.

You can make your transfer on the website or through the provider’s mobile application and track it on its way to the recipient.

In-Store Transfer Services

Western Union and Money Gram are among the oldest money transfer operators that allow you to deposit money at an agent in the sending country and transfer to your family. You can choose to send your money online or let agents handle the process for you.

You can also begin the process online and complete it in-store. Both providers have mobile apps to make the transfer process quicker and simpler. As of June 30, 2018, Western Union had over 14,000 pick up locations in Indonesia.

Mobile Money Transfer

For the 200,000+ Indonesians working and living in Singapore, the realtime mobile money remittance service launched by Singtel and Telkomsel in March 2017 opens lots of possibilities. The SingCash service allows its customers to send money from Singapore to their families in Indonesia through a disbursement network coverage of 4,500 PT Pos Indonesia’s cashpoints.

Mobile Top Up

You can give your family and friends the gift of talk time by topping up their mobile phones with airtime. Xoom has partnered with 10 carriers in Indonesia to give you the opportunity to send airtime directly to your family and friends. The carriers supported include Axis, Ceria, Esia Bakrie Telecom, Indosat Ooredoo, Smartfren, Telkomsel Kartuas, simPATI, and Three mobile.

What is Needed to Send Money to Indonesia

After you register for an account and get verified, you are free to send money to Indonesia. However, at the time of transfer, you’ll be required to provide more information to facilitate the movement of funds. Though the information may vary from one provider to another, the following is a typical list of what is needed.

  • A government issued-ID document. Depending on the country you are sending from, you can use a passport, social security card or driving license.
  • The recipient’s name as it appears on their legalised documents
  • The address and phone number of the recipient
  • If you are sending directly to a bank account, the recipient bank details (bank name, branch and account number)
  • The amount of money you want to send and the transfer payment method

Depending on the bodies that regulate the money transfer service provider you are using, you may be asked for more information.

Best Ways To Send Money To Indonesia

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Top Provider
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13,579,881
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Fees: 0
Rate: 13,579.88125*
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First 3 Transfers Free
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12,542,406
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Rate: 12,656.31250*
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3-5 Days
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3-5 Days
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Amount Received
12,462,021
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Rate: 12,587.90000*
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3-5 Days
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3-5 Days
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Internationally renowned bank
Current Mid-Market Rate: 1 USD = 13682.5 IDR
* Some rates may be indicative.

Common Reasons for Sending Money to Indonesia

Based on transaction narrations given to the various money transfer service providers, overseas Indonesians have lots of reasons for sending money home.

Basic Consumption

Remittances support close to 30% of expenditures in remittance-receiving households. Food items take the lion’s share (53%) of family expenditure budgets. Household durables, transport, and rent are the other expenditure items.

Education

About 6% of remittances to Indonesian households is allocated to education. Funds for tuition fees and school-related costs are normally sent regularly at the beginning of the term.

Investments

Thanks to initiatives by the Investment Coordinating Board (BKPM), many Indonesians in the diaspora are increasingly sending money home to invest in real estate, businesses, and financial assets in the Indonesia Stock Exchange.

Emergencies

During emergencies such as the 2018 earthquake that caused flooding, deaths and destruction of property particularly in the city of Palu on Sulawesi Island, remittances increased in frequency and size. Also, remittances are usually sent in response to emergencies at the family level such as sicknesses and accidents.

House Renovations

Many Indonesians in the diaspora send money for house constructions or renovations. This is mostly the case for immigrants coming from poor households as they prioritise the basic needs before making investments in businesses.

Social Contributions

Funerals, engagements and weddings can be such an expensive affair in Indonesia. Families reach out to their diaspora friends and relatives for support. In most cases, social contributions are sent together with family support funds.

Why Send Money with a Money Transfer Service?

With the features discussed in the preceding sections of this guide, it makes sense why money transfer service providers are mostly preferred by diaspora Indonesians sending money home.

Geographical Spread

Whether through bank partnerships or independent agents, money transfer providers have such a wide disbursement network coverage in Indonesia. Cash pickup locations and mobile deposits, in particular, penetrate deep into rural areas where formal banking services are not readily available.

Multi-Currency Support

The Indonesian rupiah is classified by the foreign exchange business community as an exotic currency. That notwithstanding, most providers support the IDR irrespective of where you are transferring funds from.

Speed of Transfer

Typically cash pickups and mobile wallet deposits are instant. Bank transfers take 1-3 to be delivered. Speed is vitally important, especially when transferring funds for emergencies.

Ease of Set up

Money transfer service providers are known for their ease of set up. Signing up for an account, choosing the transfer payment method, and the payout channel takes a very short time. You can also use the provider’s mobile application to make our transfer.

Exchange Rates

Money transfer providers differ in the rates they give. Some of them such as Xoom and WorldRemit charge a margin above the mid-market rates. Others such as TransferWise charge 0% margins. This gives you more Indonesian rupiahs (IDR) per unit of the sending currency.

Low Transfer Fees

Again, some providers like OFX charge $0 fees for their transfers while others like Azimo charge their recipients about 3.5% in transfer fees depending on the remittance corridor. These fees make it affordable to transfer small amounts on a regular basis to your family.

Things to Consider When Sending Money to Indonesia

Before you pay for your transfer and press the ‘Send’ button to your family and friends, think of the following factors.

  • Taxation -Indonesians in the diaspora classified as tax residents at home are required to pay personal income tax on their global income. Where there is a double tax agreement, they will not be subjected to tax twice. Recipients of remittances are not taxed as this is not considered taxable income.
  • Currency Law – In a bid to stabilise the Indonesian rupiah, Bank Indonesia issued Regulation No 17/3/PBI/2015. This regulation among other things requires that all cash and non-cash transactions including electronic transfer of funds within Indonesia must be settled in rupiah.
  • Foreign Currency Savings and Deposits – Banks such as PT Bank HSBC Indonesia offer this type of account. It is denominated in various foreign currency options such as USD, EUR, CHF, GBP, YEN, NZD, AUD, HKD, SGD, CAD, and CNY. It is an excellent product if you want to hedge against exchange rate fluctuations. It is also a perfect fit for people sending or receiving money regularly from overseas.

When sending money to Indonesia, you have lots of formal and legal options to use. Don’t fall prey to the risky, informal channels that end up charging you more with no assurance that your money will be delivered. 

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Looking to Send Money Somewhere Else? 

Sending money anywhere else in the world is as easy as sending money to Indonesia. If you’re looking to send money to another country, here is the list of the most popular destinations.

Jonathan Merry

Jonathan is the founder and editor of MoneyTransfers.com. Jonathan is highly experienced in the currency transfer market, having previously worked in the FX trading industry, alongside being an avid traveller. Using his knowledge he identified a need for transparency and further education to help people save money on their money transfers, leading to the creation of MoneyTransfers.com