How to Send Money from Japan to Australia

Ever been stuck trying to send money from Japan to Australia? It’s a common problem for expatriates, students, and even businesses operating across these two major economies. The process can seem daunting, but with the right knowledge, it’s simple and efficient. By the end of this guide, you'll not only know how to send money between these countries but also discover the most cost-effective and fastest methods available.

The Journey Begins with a Search: Which is the Best Way?

Imagine this: You're sitting at a café in Tokyo, needing to send $1,000 AUD to a friend in Melbourne, but you’re overwhelmed by the sheer number of options. This isn’t the 90s where bank wire transfers were the only solution. Today, we have a multitude of digital services that make sending money internationally more straightforward and cheaper. But which one is best? That depends on factors like transfer speed, fees, and exchange rates. By carefully comparing these, you can save significant time and money.

1. Understanding the Basics: Exchange Rates and Fees

When sending money internationally, two main factors will affect how much your recipient actually receives: exchange rates and transfer fees. Every service offering international money transfers between Japan and Australia will make its money either by charging a flat fee, a percentage of the transfer amount, or by manipulating the exchange rate (offering a lower rate than the real market value).

Let’s break it down:

• Transfer fees can range anywhere from 0% to upwards of 3% depending on the provider.
• Exchange rates also play a crucial role. For instance, if the current rate for 1 Japanese Yen (JPY) is 0.012 AUD and the transfer service offers you 0.0118 AUD, you’re losing out on a portion of your money.

2. Fastest Methods to Send Money: Speed vs Cost

If speed is your number one priority, there are several services designed to transfer money almost instantly. Western Union and MoneyGram, for instance, allow near-instant transfers, but they come at a higher cost. On the other hand, TransferWise (now Wise) and Revolut offer a middle ground with fast transfers (often within a few hours to a day) and far lower fees.

3. The Pros and Cons of Using Banks

Traditional bank transfers remain a reliable method for sending money internationally, but they’re far from the cheapest or fastest option. For example, MUFG Bank in Japan offers international wire transfers, but these often come with higher fees (around ¥3,000-5,000 JPY per transaction), and their exchange rates are typically less competitive.

If you opt to use your bank, consider these pros and cons:

• Pros: Secure, familiar, and widely accepted.
• Cons: Higher fees, slower processing times (up to 3-5 days), and less competitive exchange rates.

4. Digital Payment Platforms: A Game Changer

Today, digital services like Wise, Revolut, and PayPal dominate the space, and for good reason. Not only are they easy to use, but they often offer the best exchange rates and lowest fees. Let’s take a deeper look at some of the top players:

• Wise (formerly TransferWise): Known for its transparency, Wise shows you the exact fees and exchange rate upfront, so there are no hidden surprises. Fees range from 0.35%-1.5% of the transfer amount, depending on how fast you need the transfer to be. Typically, money arrives within 1-2 business days.

• Revolut: Another major player in the international money transfer market, Revolut offers zero-fee transfers up to a certain limit, though their free tier comes with slower processing times. It's perfect for smaller transfers and personal use.

• PayPal: While convenient for those already using it for online purchases, PayPal charges higher fees (around 2.5% of the amount sent) and doesn't offer the best exchange rates. However, it’s incredibly easy to use and widely accepted.

5. Understanding Currency Fluctuations: Timing is Everything

International money transfers are subject to fluctuations in currency exchange rates. Sending money at the wrong time could cost you significantly more than you intended. For example, if you’re transferring money when the AUD is strong against the JPY, you’ll get more value for your yen. Several services allow you to “lock-in” rates to prevent future losses from rate changes. It’s worth keeping an eye on exchange rates if your transfer is not urgent.

6. Tax Implications and Legal Requirements

When transferring larger sums of money, you may need to be aware of the tax laws in both Japan and Australia. For example, Japan has strict anti-money laundering regulations, and transfers over ¥1 million JPY will likely require additional documentation to prove the source of the funds. In Australia, amounts over $10,000 AUD may trigger reports to financial regulators.

Step-by-Step Guide to Sending Money from Japan to Australia

Let’s walk through a practical example using one of the popular services: Wise.

1. Set up an account: You can register for a Wise account on their website or through their mobile app. It’s free and takes just a few minutes.

2. Enter transfer details: Input how much JPY you’re sending and the AUD equivalent. Wise will display the exchange rate, fees, and the amount your recipient will receive. This transparency makes it easy to compare with other services.

3. Recipient’s details: Provide the recipient’s name, Australian bank account number, and BSB (Bank State Branch code).

4. Verify identity: For large transfers, Wise may require you to upload identification documents such as your passport or driver’s license for verification.

5. Send the money: After verification, you can fund the transfer via bank transfer, debit, or credit card. Wise will process the transaction and notify you once the money reaches your recipient’s account.

Avoiding Common Pitfalls

Many people make mistakes when sending money internationally, such as:

• Not comparing providers: Always shop around before choosing a service. Fees and rates can vary significantly.
• Ignoring transfer limits: Some services impose limits on how much you can send in a single transfer or within a certain period. Make sure your service can handle the amount you need to send.
• Failing to factor in delivery times: Always check the estimated delivery times, especially if your transfer is time-sensitive.

Final Thoughts: Which Method Should You Choose?

If you’re sending small amounts frequently, Wise and Revolut are likely your best bets due to their low fees and good exchange rates. For larger, one-time transfers, traditional bank services might offer the security and peace of mind you need, despite their higher fees.

The method you choose ultimately depends on how much you’re sending, how fast you need it to arrive, and what fees you’re comfortable paying. Whatever you decide, by staying informed and using the right tools, you can ensure your money reaches its destination safely, quickly, and at the best possible rate.