Informal Channel: An alternative for Remittances and International Money Transfers between China and African Countries

Abstract

Foreigners in different countries rely on different remittance channels for sending and receiving money. This paper analyses the privileged remittances channels that foreigners use in China to send money to their home country and to receive money in China. This paper explores foreigners’ choices of remittance channels in China and the reasons for their choices. On the other hand, the paper aims to highlight the barriers and difficulties foreigners in China experience when sending and receiving money through a formal institution. To the best of our knowledge, this paper is the first to investigate the remittance channels used by foreigners in China; this is the innovation of this study. Using a questionnaire, we collected data from 105 foreigners living in different cities in China; and used descriptive statistics to analyze the data. Findings show that foreigners in China willing to use formal remittances channels face several barriers and therefore rely on informal channels to carry out their transactions of sending and receiving money. To render the formal remittances channels accessible for every foreigner, banks and formal Money Transfer Operators (MTOs) in China should promote English service for foreign customers and deal with computer system problems that reverse names and surnames. In addition, they should deal with the problem of restrictions for some nationalities, reevaluate the transaction amount limits, and offer less complex administrative procedures.