Remitting Fees To A Foreign School? Here Is What You Need To Know

Going for your studies abroad? Making international payments can often be frustrating due to complex fee structures and slow processing times.

Here are a few things to consider. 

Look out for the exchange rate used

There are often two costs involved in cross-border transactions: the upfront fee and the exchange rate. “It's important to be wary of "free" or "0 per cent fee" claims, as costs are often hidden elsewhere, typically in the exchange rate. Most people aren’t aware that banks and other providers often set their own unfriendly exchange rates and not use the mid-market rate that you can find on Google,” says SK Saraogi, Head of APAC Expansion at Wise

This means people are unknowingly paying more money than they need to every time they make a cross-currency transaction. Indeed, Wise research has found that Indians paid over a whopping Rs 26,300 crores on foreign exchange fees in 2020, of which roughly Rs 9,700 crores were hidden as exchange rate markups on currency conversions, payments and card purchases.

According to a World Bank report, the global average cost to send remittances is 6.35 per cent of the amount sent. “These costs can vary based on the service used, the destination, and the transfer amount. Banks are often the most expensive, with the same World Bank report estimating bank fees to be an average of 12.66 per cent,” Saraogi. 

Choose a trusted provider

With education on the line, especially with university fees, you want to make sure your payments are completed and received by the date they are needed. It’s also important that the amount received will be the same as you were told without any additional hidden fees eating into the amount.

“That’s why it’s crucial to choose a provider you can trust that will get your money where it needs to go. This means making sure their service is fast, reliable, and that they are regulated to operate in the market. Providers that offer transaction tracking so you can follow your money at every step of the way can also give you greater peace of mind,” says Saraogi. 

Speed of transaction is also something you should consider. “Traditional Banking systems are slow; they take T+2 Days and a lot of to and fro of documents before remittance happens,” says Saravana Bhaskar, Chief Executive Officer, Fairexpay. However, new age fintechs provide much faster remittances. 

What To Do

First, compare online money transfer services. As mentioned, these often offer better rates than banks. Check fees, exchange rates, and transfer speeds. Use comparison websites. Avoid debit/credit cards, they have high fees. 

Look for a provider who is transparent with the costs. “Understanding the true cost of international transactions shouldn’t involve complicated math or unnecessary headaches,” says Saraogi. 

Also, look at services which allow remittance from the comfort of your home. “Our platform is fully digital, allowing you to remit money abroad 24/7 from anywhere in India. You can manage your transactions through our user-friendly webapp or website,” says Bhaskar.