Strategies to Reduce Expenses and Prevent Delays in International Money Transfers

With the rise in overseas education, travel, and family remittances, international money transfers have become a common aspect of personal finances. Nevertheless, cross-border payments often incur higher costs and complexities compared to domestic transactions, influenced by exchange rate variances, intermediary fees, and regulatory mandates.

Harsh Sinha, Chief Technology Officer at Wise, emphasizes that individuals can reduce expenses and avoid delays by prioritizing pricing transparency and compliance prior to executing a transfer.

Look beyond the headline fee
Sinha points out that the foreign exchange (FX) margin frequently serves as the most significant hidden charge in international payments.

“Many providers impose a margin over the exchange rate and pair it with fixed costs. Consequently, individuals often incur higher charges than expected, and the receiver ends up with less than planned,” he explains.

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He suggests that opting for services that transparently show both the fee and the exchange rate upfront can assist customers in grasping the total expenses before finalizing a transaction. Choosing the mid-market exchange rate rather than an inflated one ensures that more funds reach the recipient, he adds.

Compare options instead of defaulting to banks

Sinha urges consumers to compare various providers rather than depending solely on traditional bank wires.

Referring to a 2024 Wise study in India, he notes that for corridors like GBP, EUR, and USD, Wise was in some instances over 30% less expensive than several major banks for typical transfers from India.

Experts advise that comparing the total payable amount—including exchange rate and fees—can aid individuals in recognizing significant savings, especially for recurring remittances like tuition payments or family support.

Plan transfers efficiently

Sinha mentions that on some platforms, percentage-based fees decrease for larger transactions. Optimizing payment planning instead of conducting multiple small transfers can help minimize overall costs, as long as users remain within the applicable limits.

Follow regulatory requirements carefully

Outward remittances from India are regulated by the Foreign Exchange Management Act and the Liberalised Remittance Scheme framework set forth by the Reserve Bank of India.

Sinha stresses that completing identity verification in advance is essential to avoid delays. To send money from India, users must fulfill full KYC requirements, which include Aadhaar, PAN, and video verification.

He also notes that rupee transfers must be financed from a personal Indian bank account held in the sender’s name, and the name should correspond with the account details on the transfer platform.

Entering accurate beneficiary details and selecting the appropriate purpose for the transfer also helps avoid extra compliance checks.

Experts further highlight that Tax Collected at Source (TCS) might apply to certain outward remittances under LRS guidelines, and customers should review the final amount, including applicable taxes, before completing the transaction.

Keeping confirmation emails and transaction reference numbers can aid in tax reporting or future verifications, he states.

Assess safety and delivery timelines

On newer digital platforms, Sinha advises users to consider regulations, safeguarding practices, and transparency about delivery timelines.

Wise is authorized in the jurisdictions it operates, including by the Reserve Bank of India, and separates customer funds from company funds for safety, according to Sinha. He mentions that the platform provides estimated delivery times prior to confirmation, and that most transfers on major corridors are completed within 24 hours.

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