International Money Transfer: How does it work and different ways to send money abroad

While travel has caught with convenience, so has the way to send money abroad. Whether you want to transfer money to India from the UK or anywhere, the process of sending money abroad has become easy and convenient. However, you must be mindful of certain factors before initiating a transfer, such as transfer fees, foreign exchange rates, etc. 

Most people who send money abroad confuse outward remittance with international money transfer. Even though there are similarities, you can still find noticeable differences. For instance, outward remittances occurs only when an individual residing in a country sends money abroad to a beneficiary in a different country. Whereas, in international money transfer, there is no such distinction. It simply refers to the transfer of money from a home account to an overseas bank account & vice versa.

How does an international money transfer work?  

There are three main players involved in an international money transfer, such as:

●    The sender

●    The recipient

●    The money transfer service provider

To transfer money to India from the UK or anywhere else, the sender needs to initiate a transfer with a service provider. You can send money abroad through online platforms or cash transfer agencies. To make a transfer, you will need to submit the recipient’s account details along with the transfer amount.

Upon receiving the transfer fees and the transfer amount, the service provider will send your money to the recipient. The recipient will receive the funds in their account or receive cash. Generally, it takes about 2 to 4 working days to transfer the money.

Several ways to make an international money transfer

There are several ways you can choose to transfer money to India from the UK or anywhere else. For instance,

Bank-to-bank transfer

You can send money abroad through your bank. You will have to visit your bank’s nearby branch and request a wire transfer. However, your bank can charge a higher foreign exchange rate and transfer fee, your hard-earned money is safe with them. If the recipient is unable to receive the money, you can always get a refund.

Compared to other options, banks are a bit costlier. Banks usually charge about 11% of the total transfer amount as transfer fees. However, it varies across different banks in India. At times, you may have to pay more to guarantee that the recipient will receive the funds in their account.

Online money transfer service

International money transfer has become easy, convenient, and affordable, thanks to the internet. You will need to find an online money service, create an online account, get your account verified, and provide your details. After creating an account, you can transfer money from your account to any overseas account with ease. The best part is that online money transfer services are transparent. You can avail of low transfer fees and affordable foreign exchange rates.

Cash transfer services

Opting for a cash transfer service is the best option if you do not have an active bank account or wish to pay the recipient in cash. To make an international money transfer, you will need to visit one of the cash transfer services in your area. You will need to fill up a mandatory form and pay the transfer fees and the transfer amount. After making the payment, your service provider will make the transfer. The recipient will be able to receive the funds within just minutes.

Foreign currency demand draft

If you do not have to meet any deadline, it is best to opt for a foreign currency demand draft. This way, you can avail yourself of the best foreign exchange rates and lower transfer fees. It generally takes about 10 to 15 working days to send money abroad. You will need to visit your bank and request a demand draft in foreign currency. You will need to provide your account details and the amount you wish to transfer. The bank will issue a demand draft in foreign currency, which you will need to send to the recipient. The recipient will submit the same to his/her overseas bank to receive the funds.