Why on earth send money to the Solomon Islands?
While not exactly a stone's throw away in its familiarity to everyday people, the Solomon Islands is close enough to Australia for money transfers to take place. And that's not because of the hidden treasures in its collection of WWII relics caught between hundreds of small islands! This small nation lives on the shoulder of Papua New Guinea, and barely reaches the 550,000 population mark.
Although it faces a tough set of business challenges, there is steady growth on the horizon as this tiny nation sets about the grim task of rebuilding previous losses due to a flood in April, 2014 that ruined its capital, Honiara. Imports to Australia are currently estimated at A$78.6 million and exports estimated at A$144.9 million according to the Australian Trade Commission. The two countries are also connected through the Solomon Islands and Australia Partnership for Development, and is a reason current and future businesses should take note of this country, especially costs involved in sending and receiving money from the Solomon Islands.
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Is your bank the best bet to send money and receive money from Australia to the Solomon Islands?
Liam an up and coming entrepreneurLiam is an up and coming entrepreneur from Adelaide, Australia. Since hearing about the severe floods in April, 2014, he has had a burning desire to expand his operations to the Honiara area. Liam believes he can assist in boosting the local economy and has for a long time followed the Solomon Islands and Australia Partnership for Development.
Since Liam has experience in the forestry private sector and knows that it is a major contributor to the Solomon Islands economy, he foresees that his best bet would be to transfer funds there. This will enable him to cover his infrastructure cost at a local price point instead of carrying the cost of importing the necessary infrastructure.
To make sure he won't be paying transfer fees that will actually rival his import cost, Liam does some basic cost comparisons with a benchmark amount of A$1,000 on banks and money transfer companies that transfer funds to the Solomon Islands.
|Bank||Money Transfer Company|
|Exchange Rate||1 AUD = 5.409||1 AUD = 5.001|
|Transfer Fee||$18* / $32 **||$15 Depending on where the money is transferred to.|
|Amount Solomon Islands Dollar received for $1000 Australian Dollar||SBD = 5409||SBD = 5001|
|Transfer Time||At least 2 working days||At least 2 working days|
|Transfer Options (i.e. pickup)||*Internet Banking / **Branch or Foreign Exchange Centre||Recipient will have to pick up at agent.|
In this comparison, Liam will be able to receive more SBD by transferring the money between bank accounts, especially if he uses a bank that has branches in both Australia and the Solomon Islands.
How do I compare transfer companies when transferring and receiving money via Solomon Island?
In looking at the various options for doing price comparisons, Liam has discovered a few key variables to use when comparing banks and money transfer companies. This is what he found:
- Exchange rates - Although the above case study data is real data from the marketplace, there is constant variation in what banks and money transfer companies offer. The differences with banks tend to be less volatile, but the difference in money transfer companies can be up to 0.5 in SBD for above data. Be careful of the lure of a lower transaction fee and losing out on the exchange rate that could benefit you.
- Pick up methods - It is important to know that there is a combination of convenience, risk, and customer experience that will form your choice of where you want to pick up your money. Accessing it from a bank account is almost the best combination of all three, but only if the cost of getting the money is worth the spend! When you choose a physical location for your cash pick up, make sure it doesn't stretch into a danger zone of the local area you are visiting.
- Fees - Even though companies and banks do their best to outline fees like transaction and transfer fees, there's always the unpleasant pressure of knowing you might have unexpected fees along the way. When comparing fees, make sure the low fees don't put scales on your eyes for hidden fees in the transferral process.
- Bank to bank benefits - Using a bank like ANZ that has branches in the Solomon Islands means that you can continue using services and processes you are used to and hopefully trust. The benefits of using a bank to bank transferral is having your money available to you in a safe and secure way like internet banking in an account you already utilize.
- Turnaround time - The time it takes for a transfer can be as long as 5 working days or it can be minutes. If you choose a pick up option like Western Union, you will most likely get away with a short turnaround time but have more potential complications like service, logistics and risk. Take note of which companies offer quicker turnaround times so that you are prepared for any emergencies.
- Transfer methods - Sending and Receiving money to the Solomon Islands can be done through simple and familiar processes like Internet Banking and Cellphone Banking or through traditional methods like visiting a branch or Foreign Exchange Centre.
- Transfer options - With money transfer companies like OFX you can transfer money through options that include scheduled transfers, single transfers, forward contracts and currency options. This gives someone like Liam the ability to keep a constant cash flow whilst he is expanding his business operations in Honiara.
- Minimum transfer amounts - This is vital to keep in mind for someone like Liam who is expanding his business operations. No one wants to be caught between an impossible minimum transfer amount and actual available cash flow which is enough for the need but not the transfer.
- Customer service - Unfortunately, customer service too often comes in as a very late afterthought. Great customer services can make a world of difference when your money is a week late and no one can seem to find it. Be careful of buying into cheap fees and low minimum amounts before you've had a look at a company's customer service history.
How will you send money from Australia to the Solomon Islands?
Keep in mind that many people aren't necessarily all that aware of the relations between Australia and the Solomon Islands. This means that not all banks and money transfer companies will support the Solomon Islands Dollar. Below you can find a couple of banks and companies that will support an individual like Liam in transferring his money.
- Banks - These banks will allow you to send money to the Solomon Islands: ANZ, Commonwealth Bank, Westpac, National Australia Bank, Bankwest, Citibank, HSBC, Suncorp, and St. George Bank.
- Money transfer Services with a cash pickup - Western Union and Moneygram allow cash pickups and you can view some of their pickup points further down.
- Money transfer Services with online transfers, including banks - Westpac, Currency Online, National Australia Bank, HiFX, ANZ, Commonwealth Banks, HSBC, Compass Global Markets, St. George Bank and Suncorp.
- Cheques - Some of the banks above allows you to send an International Draft which is a cheque that will be recognized in the foreign currency.
How will you receive money from the Solomon Islands in Australia?
One of the biggest challenges for Liam will be to transfer any capital gains or profits he has made to his investment accounts in Australia. Because of the lack of infrastructure in Honiara, his options seem to be limited to either working with money transfer services like Western Union and Moneygram and carrying a continuous transfer cost. Or, to set up another bank account with ANZ and carry ongoing banking fees even when he isn't active in the Solomon Islands.Back to top
Be Prepared! Emergency transfers in the Solomon Islands
It is vital to know your options for emergency cash flow when you are in a foreign country. Liam has built up a successful business because he also knows the value of being prepared.
- Money transfers with a cash pickup in less than one hour - Western Union and Moneygram.
- Credit cards - Liam has found that credit cards can be accepted at larger institutions like resorts and restaurants but most probably at a high cost.
- Travel cards - ANZ offers a travel card that Liam can keep for emergency funds but knows he will withdraw cash at a higher cost.
Know your area - Cash pickup points in the Solomon Islands
|Address||Hilltop Budget AccommodationWest Kola Ridge, Po Box 1202, Honiara,||Le PharmacyChina Town, Honiara,|
|Opening hours||N/A||Monday-Friday, 08:00-17:00, Saturdays, 09:00-14:00 and Sundays, 11:00-13:00.|
|Address||Bank of South PacificSolomon IslandsPo Box 37, Honiara, Guadalcanal,||Cathliro Commodities DevelopmentPo Box 4, Wings Minimart Chinatown, Honiara, 000|
|Opening hours||Monday-Friday, 08:00-17:30.||Monday-Friday, 08:00-18:00 and Saturdays, 08:00-17:00.|
|Address||Hilltop Budget AccommodationRanadi, Oba Building, Honiara, Guadalcanal,||Liua S TradingOpp K.g. Vi School, Prince Philip Highway, Honiara,|
|Opening hours||Monday-Friday, 08:00-16:00, Saturdays, 09:00-15:00 and Sundays, 10:00-15:00.||Monday-Saturday, 08:00-18:00 and Sundays, 09:00-14:00.|
|Address||Bank of South Pacific - HoniaraNational Provident Fund Building, Mendana Avenue 721, Honiara, 21222||Westpac Bank SamoaNational Provident Fund Building, Mendana Avenue 721, Honiara, 21222|
|Opening hours||Monday-Friday, 9am - 4pm||Monday-Friday, 9am - 4pm|
Tips for picking up cash in the Solomon Islands
According to institutions like ANZ Banking and the Australian Trade Commission, the Solomon Islands is still classified as a relatively poor nation. Although not a definite, crime and harassing foreign visitors tend to walk closely with those desperate conditions. Make sure the area you pick up your cash – which will most probably be in the surrounding areas of Honiara - hasn't got a reputation of danger attached to it.
Honiara will be the place you get most of your business related services so it is handy to get a map of the area that you can carry with you. If possible, also carry with you the tracking code of the transfer and proof of the amounts transferred.
We also recommend visiting the Australian Trade Commission's overview of the Solomon Islands to understand the local context.Back to top
What will you need to send and receive money from the Solomon Islands?
For most money transfer services, including banks, you will most often need some or all of the following:
- The recipient’s full name, address and where necessary, account details (includes necessary SWIFT BIC).
- An account with the service you are using e.g. registering with OFX or setting up a bank account with ANZ. With a bank, this will require the standard personal details for opening an account which includes identification and proof of address.
- As a recipient you will need to provide proof of ID when doing cash pickups and proof of the transfer e.g. when using Western Union, the Money Transfer Control Number.
- Tracking codes and proof of the amounts transferred are handy to have with you as well.
Once you’re sure all of this is sorted, you’re ready to engage in the established relations between the Solomon Islands and Australia!