International Money Transfer

Transfer Speed: The speed at which the money that has been sent out is reflected in the receiver’s bank account plays is important and implies if the method used will incur a low or high money transfer fee. The faster the speed, the higher the rates. In most cases, a timeframe of about 48-72 business hours should be considered ideal for money sent out from India through appropriate online channels, and a few days for cheques and demand drafts.

Exchange Rates: The foreign exchange rate is the value of a currency compared to another foreign currency. The core value depends on the fluctuation of international markets and usually consists of a small part that the bank charges for its services rendered which usually differs from bank to bank or platform to platform. It is important to note that even a small difference in the exchange rate can make a significant difference if the amount to be sent out is large.

Overhead Charges: While transferring money, very often a transfer fee is also charged on the money order. This can either be fixed or a percentage of the amount that is being transferred. Foreign conversion tax and service tax are also levied in some cases, depending on the currency and the amount, for each of the entities involved in the transfer process.

Bank Drafts and Cashier's Cheques are available at various bank outlets across the country and can be physically purchased in the currency of the location that you're sending money to. Bank drafts and cheques are cheaper as compared to other international money transfer services, and are considered safer as they are traceable in case the cheques or the drafts do not reach the destination account on time. These, however, take long durations to reach the recipient and hence are ideal if there is no hurry for the transfer.

Offline money orders were extremely popular before online wire transfers were introduced. In this mode, money orders can be deposited into a bank account or cashed at any of the check cashing locations. They make for a safe and affordable option while availing international money transfer service that is faster than bank drafts and cheques.

Making an international money transfer online is one of the simplest methods to send money abroad. The process simply requires the destination account details, such as IBAN or SWIFT code of the recipient bank, account holder information, etc. and can be completed from the comfort of your home. It is the closest in terms of providing instant international money transfer services to people who are in immediate need. This method is significantly faster than the methods discussed above since it excludes the use of intermediary banks, which results in incurring heavy taxes and high exchange rates for the fast service, thereby making this method quite expensive.

Online wire transfer is a kind of online international money transfer service that includes the use of intermediary banks to send money overseas. While this makes the process a bit slower, it also reduces the amount of overhead charges for every transaction drastically and that is the reason why wire transfers are considered an ideal option by many. There are various financial institutions through which a wire transfer can be booked, such as banks, authorized money exchangers, online platforms and more.

The first step when preparing to send money internationally is an ID check of the customer, which is a legal requirement due to financial regulations. Most commonly, an ID check is only done once for first-time users, but it depends on the agent (bank, individual, etc.) or the platform that is chosen.

Most ID checks are done electronically which takes less time and makes the process a lot quicker and easier. However, this too will depend on the agent (bank, individual, etc.) or the platform that is in question.

Once the customer’s ID is checked, and a preferred method to transfer the money is chosen, the next step requires blocking the currency exchange rate. Depending on the currency that you’d be paying in your home country, and the currency that you’d want the receiver to accept the money in, the latest currency exchange rate is provided.

As mentioned before, this rate fluctuates with the market and changes at every instant. The rate that you might see would not be the same when you would actually process the money transfer, thus making the lock-in of the exchange rate a necessary step. Once the exchange rate is blocked, you can move ahead in the process.

Once the currency exchange rate is blocked, all the details regarding the international money transfer order are shared via email. You are also provided with a pre-defined duration of time, usually 1-2 days, within which the payment needs to be made or else the locked-in rate is lost. Banks usually require the funds to be in your account already. As soon as the ‘money is sent in’ or the payment is made, the order gets processed.

The bank or the company will then convert the money that is sent to them into the currency you need and then send it to the destination bank account. Processing times depend on the bank or the company that has been chosen, and also on the intermediator banks. An online wire transfer done through popular banks in India usually takes anywhere between 3 to 7 days for the funds to reflect in the destination account.