Guest Post: Is Western Union A Good Way to Send Money from Japan?

This guest post is written by foreign exchange specialist Peter Lavelle. How to send money home from Japan is a question I've heard asked many times, and Peter has offered to lay out one possibility for us.


Update 6/11/2012: For a much more extensive article about foreign exchange to/from Japan to which Peter contributed, check out Surviving in Japan.

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Expat living in Japan? Then there’s a good chance that you (like other expats) have an ongoing need to send money out of the country. But what’s the best (that is, cheapest and most secure) way of doing so? Well, one of the most famous is Western Union. Is it any good? In this post, I aim to set out the pros and cons of using Western Union to send money out of Japan.

Overview:

If you’re not familiar with the Western Union concept, it’s simple. You wire a set amount from one Western Union-approved location (you must physically be there to do so) to another, where the person picks up the cash (again, in person.)

Though you cannot receive money from Western Union in Japan, it’s quite simple to send it given that the company has partnered with several large outlets. These include Family Mart and Seven Bank.

How does it work?

As of last month (that is, April 2012) you can send money online through Western Union, which removes a huge drawback to the service i.e. you must physically go to the location to send the money.

However, if you choose the old fashioned method of going in person, then the first step is finding your nearest Western Union outpost. You can do that here (if you speak Japanese.)

Once you find a good location, it’s then a matter of registering. Frustratingly, the Western Union services available at Family Mart and Seven Bank (as well as others) are not compatible, so if you want to send money from more than one chain you need to register each time.

Then, whether you’re using Family Mart or Seven Bank, you just need to send the money. There is a diagram How To for Family Mart here, as well as a demonstration of the online service for Seven Bank here (though it is in Japanese.)

Pros and Cons

The chief pro of Western Union is its speed. It guarantees to have the money available for pick up inside two minutes, which compares to the hours and days it sometimes takes using a bank. Hence, if you know someone in a tight spot, you can get cash to them all but instantaneously.

The other advantage of course is that they’re receiving cash: there’s no bank accounts involved.

On the other hand, Western Union is not suitable for big transfers. This is because it has a limit of Y97,000 per transfer (plus Y3,000 fee)meaning it’s best suited to emergencies (that’s about $1,300 dollars.) If you need to send more, you’re better off using an alternative,unless you wish to incur a Y3,000 charge for each Y100,000 you send.

There’s also the point that Western Union does not publicise the exchange rates it uses, which could leave you open to a poor rate.

Last of all, if you’re sending money to yourself, it’s no good, because someone has to be there to pick it up!

Summary

For people willing to make the trip, Western Union offers a fast way to send money out of Japan, without using banks. Yet its lack of transparency regarding exchange rates, as well as relatively small transfer limit, mean it’s best reserved for emergencies.

About the Writer

Peter Lavelle works for foreign currency dealer Pure FX. He’s never been to Japan, but in his line of work has picked up a lot of knowledge about sending money to places. If you’d like to keep up with his exchange rate updates, visit his Google+ page.

The Culture of Money (Part 2)

In the comments section of Part 1, Shaun mentioned that repatriating to England he was surprised at the dirty bills, being used to the largely crisp, clean yenners. I've also been experiencing some money-related reverse culture shock, but of a different nature.

The single dollar bill. I've grown to dislike it.

Japan, the UK, Europe, Canada - all have coins for their one-dollar-like denominations. It's not that we don't have $1 coins in the U.S., it's that they're not popular and thus don't stay in circulation for long. I regularly listen to an NPR podcast called Planet Money, and they sometimes talk about this. Apparently people just don't like the coins; they'd rather have light bills rather than heavy coins.

The solution, of course, is to just ignore public opinion and discontinue the single dollar bill. This is what happened in Canada, and it resulted in successful $1 and $2 coins.

As for me, I don't mind the extra weight so long as the coins aren't huge. $1 coins would be a lot more convenient for vending machines, and it's a lot easier to just quickly stick a few $1 coins in your pocket when you get change than to pull our your wallet and put them away.

In Japan, there are six types of coins: 1, 5, 10, 50, 100, and 500 yen. I've written about how the 500 yen pieces are excellent for saving. Most people, even men, carry around personal bags in Japan, so weighing down your pockets rarely becomes and issue. Many wallets also have pouches for coins (which I don't believe is unique to Japan). And the 100 and 500 yen pieces are so easy to spend that they don't weigh you down long, anyway (the multitude of convenience stores and vending machines help see to that)!

Though I think the U.S. would do well to follow the lead of Japan and so many other countries, I'm not holding my breath. We're still holding on to Fahrenheit and resisting the metric system, after all.

What do you all say? Paper or metal?

The Culture of Money (Part 1)

I was talking to my girlfriend Yoshie a little while ago and she mentioned that she had gotten annoyed just before coming home. I asked her what happened, and she told me about how a client had given her a nice 10,000 yen (~$130) tip tonight (she's a piano player). She then went to a convenience store and bought a few small items to get change. Unfortunately, the clerk gave her back dirty-looking 1,000 yen notes. I chuckled and when she asked me why, I could only say that in the U.S. most people don't really care about the condition of the cash we get as we're just going to spend it soon anyway.

True, there may be occasions that call for crisp bills in the U.S., but generally I've found the Japanese to be much more particular and conscious of their cash. There are special money envelopes that you can buy as you might buy Hallmark cards in another country, with ribbons and kanji to indicate different occasions, from weddings to funerals. And it is common custom to go to the bank and get fresh, crisp bills for such gifts, especially for weddings, as the fresh, new money is hoped to bring good luck upon the fresh, new couple. Though we do give cash gifts in the States, the Japanese are much more ceremonious about it, perhaps partly due to the fact that people don't use personal checks in Japan. I imagine it would be a little difficult to gussy up personal checks as gifts, but then I probably shouldn't underestimate the originators of tea ceremony and Hello Kitty.

Don't lack the (financial) discipline!

For someone like me, owing tens of thousands of dollars in student loans, working in Japan has its advantages. The exchange rate has been quite favorable for a while now, with the the dollar valued at only around 80-85 yen in recent months. Compare that to the standard $1 = 100 yen formula that for years most American ex-pats have adopted for simple mental accounting calculations. Small wonder it's been relatively easy to keep up with my payments.

I find, however, that the nature of Japanese currency also helps me save. One of the easiest ways to save money, I find, is to collect coins. When I first arrived in Japan, I was inundated with coins. In America, you have four standard denominations: pennies, nickels, dimes, and quarters. In Japan, though, six are used: 1, 5, 10, 50, 100, and 500-yen pieces. So as you might imagine, you get a lot of change. This is especially true considering that Japan is still a mostly cash-based society. Credit cards aren't the norm. What can one do but get an adequately large jar?

Once I realized the futility of trying to spend all my coins, I got a couple jars. First, I decided not to spend 500 yen pieces unless absolutely necessary. That means every time I spend less than 1000 yen (the smallest bill denomination), unless I'm paying with small change (rare), my change includes one 500 yen piece. As soon as I get home, this is dumped in a jar. Over the course of about half a year, I managed to save about 120,000 yen this way (almost $1,500). It's roughly the same as never spending $5 bills.

If you're looking to save some money and maybe want to challenge yourself, I highly recommend this practice. Get a jar or some other container and start putting aside all your 500 yen pieces (or $5 bills). You can do this indefinitely, but it also works well if you want to save up for a certain period of time in order to buy something. A friend of mine saved for about half a year and collected enough to buy himself a MacBook that he'd been wanting.

It takes a bit of discipline, but after a while it will become habit. Now I cringe a little inside whenever I see someone spending a 500 yenner, no joke. I'm loathe to use them, and don't do so unless I'm in a pinch with no other cash.

Golden yenners

Japanese yen come in both coins (玉, tama) and bills (札, satsu). The coin variety includes 1, 5, 10, 50, 100, and 500-yen pieces. In America, coins of a higher denomination than 25 cents have never really caught on. We've had 50 cent and $1 coins introduced, but no one really seems to use them. I think that's a shame.

In Canada, Loonies and Toonies (one and two Canadian dollar coins, respectively) are widely used. In Europe, there are one and two-euro coins, as well. Britain has the 1-pound coin, and of course Japan has the 100 and 500-yen coins. What is it about Americans that we can't succumb to the allure of the high-denomination coin? I mean, holding a fistful of 500-yen pieces is like grasping a small hoard of pirate gold. Who doesn't love pirate gold?

Coins are easier to handle than bills (although I suppose their cumulative weight is the flip side of that) and they are also cheaper for the government (and therefore us) to make. Coins wear out much more slowly than bills, and thus have to be replaced and recirculated much less often. It also makes Coinstar much more exciting - in America I could usually expect one or two hundred bucks from a couple big jars of coins. A couple weeks ago I deposited a jar of yen and got the equivalent of about $350 for it! But despite these benefits, America lags behind in the coinage arena.

One of my favorite aspects of the high-value coins are how easy they are to spend or not spend. I'm sure I'm not the first to blog about this, but I am a subscriber to the practice of saving 500-yenners. About half a year ago, as close as can remember, I began dropping all my 500-yen coins into a little box. Over the months, I've conditioned myself never to spend them. It's gotten to the point where I inwardly wince when I see other people drop a 500-yen piece. And it's been paying off. To date, I've saved just under 70,000 yen - that's around $700.

I do find myself wrestling with the question of what to do with the money when I do decide to cash it in, though. Do I invest it? Spend it on a vacation? Get myself some fancy gadgets? Only time will tell...

Just another random thought 11/26/09: Buy American!

There comes a time in (almost) every young man or woman's life when he sets out on his own and assumes responsibility for himself: bills, food, housing - all of that good stuff. It was an interesting experience to jump to this stage of life and simultaneously into a foreign country. Although to be fair, I have had help with things like my apartment lease.

One characteristic of growing up and becoming responsible is learning how to manage your money. You start to notice things you never really gave much thought to in the past, like how much different brands of milk cost and which pack has more cherry tomatoes in it. As such, I've tended to inadvertently buy a lot of American produce. Often imported American (or Australian) meat is cheaper than domestic Japanese stock. The same is true of some fruits and vegetables. Today I bought a head of American broccoli for 68 yen. The Japanese ones were almost 100 yen more! Fine by me - I like buying stuff from home. Suckers...!