Cheaper way to send cash to Beijing

Citizens offers deal for Chinese New Year
By Robert Weisman, Globe Staff  |  January 12, 2007

Citizens Bank, capitalizing on its parent company's stake in Bank of China, has rolled out a service making it cheaper and easier for Chinese-American customers in Boston and elsewhere to send money to relatives in China before the Chinese New Year.

Under the "Remittance plus" program, customers with checking accounts at Citizens Bank, which is based in Providence, will be able to send up to $1,000 a day to China for a $10 fee through Feb. 18, the Chinese New Year. Recipients in China will receive notification of the gifts through text messages on their cellphones and be able to withdraw the money from Bank of China branches there.

"Presents are a very big part of the Chinese culture," said Robert M. Mahoney , the Boston-based executive vice chairman for Citizens Financial Group. "In the weeks before the Chinese New Year, over $1 billion in cash is sent from the United States to China."

Gift givers have typically used Western Union or a larger money center bank, often paying higher fees. On the receiving end, it can take up to a month to withdraw the money from a bank in China, said Jun Wang , president of the New England Chinese Information and Networking Association in Boston.

Because Citizens parent company, the Royal Bank of Scotland Group PLC, led a consortium buying 10 percent of the Bank of China for $1.3 billion in August 2005, money transferred from Citizens Bank customers in 13 states will be able to be withdrawn from Bank of China branches within 24 to 48 hours.

For consumers, the remittance program is the first tangible fruit of the alliance -- in which the Royal Bank of Scotland Group itself owns about 5 percent of Bank of China -- but it won't be the last, Mahoney said. He said Citizens plans to offer hundreds of thousands of Chinese students in its coverage area products such as credit and debit cards, and checking and savings accounts, also in partnership with Bank of China, that nation's second-largest bank.

In the business market, "there's not a manufacturing company in America that's not thinking about China," Mahoney said. "They're thinking about buying from China or selling into China. There's only three or four banks in the United States that can help them do that because of Chinese partnerships, and now we're one of them."

Other banks competing to serve companies doing business in China include Wells Fargo, Citibank, and HSBC. On the consumer side, Bank of America Corp., which offers a no-fee SafeSend program for Mexican customers nationwide, is running a pilot program for Chinese cash transfers from 110 branches in the San Francisco area. That program is being run in partnership with China Construction Bank.

"We're in the process of evaluating it" before deciding if it will go national, said Bank of America spokeswoman Diane Wagner .

Citizens for its part, is offering the service from its 1,700 branches, including about 50 that serve large Chinese-American populations in the Boston, Philadelphia, and Chicago areas. For the Chinatown branches in those cities, Citizens has set up promotions including signs, kiosks, brochures, and local ad campaigns.

The branches also are offering customary red gift envelopes for customers who want to give Chinese New Year cash gifts locally. The $10 fee is a promotion that will only last until Feb. 18, however. After that, the remittal fee will increase to $30, though the bank will continue to offer rapid release of the transferred money in China and send instant messages to cellphones served by China Mobile and China Unicom.

Those features should prove popular in the Chinese community, said Wang, who was born in Shanxi province in northern China. Wang said he sends cash to his parents and brother in China twice a year. The gifts represent a wish of good luck, he said. "Traditionally, when I send money to my brother in Beijing, it would probably take one month before he can cash out the money," he said.