What factors you must compare before signing up with online money transfer services to India

Indians living in USA have access to more than 20 online money transfer services to India. These services compete to innovate, provide better exchange rates and offer unique services to please their customers. With so many services available, one must understand what factors to evaluate and then compare them. In this post we will explain what factors you must compare before signing up.

1. Exchange Rate Types

LockedIn and Indicative are the two type of exchange rates offered by online money transfer services to India. LockedIn exchange rates provide guarantee to you on how much money the receivers will get in Indian rupees. This allows you to review the final amount receiver would get and then submit money transfer request.

On the other hand, Indicative exchange rates provide a rough exchange rate you would get. You must submit money transfer request without knowing the final amount received in Rupees. The money transfer service will decide the final amount later based on various opaque factors.

Few years ago most of the money transfer services to India were offering only Indicative rates. But these days all major services offer Locked-in exchange rates.

While evaluating an online money transfer services to India you must make sure that they support Locked-in exchange rates for better experience.

2. Exchange Rates

No two online money transfer services to India offer same exchange rates on any day. Though the international forex market provides one exchange rate at any given time, each services chooses their own rate.

So you must compare exchange rates offered by all major money transfer services to India and understand the details. To compare exchange rates you can visit Coziie Remittance and at a glance understand exchange rates offered by all online money transfer services in a single page.

While checking the rates you must not fall for high exchange rates offered for first time money transfers.  Several money transfer services to India offer considerably high rates just for the first transaction.

3. Transfer Fee

If any of your friends ever told you about a money transfer service that does not charge transfer fee then don’t believe them. Every online money transfer service to India charges fees; very few of them transparently tell you while all others opequely.

We are not saying that your friend is lying but the friend would have been a victim of  “No Transfer Fee” marketing. Several money transfer services offer “No Transfer Fee” option but they actually charge fee in an indirect way. They cut into the exchange rates offered to you and charges fee indirectly.

So while evaluating a money transfer service, make sure you understand the real fee they charge by thoroughly going through their fee & exchange rate details.  The only money transfer service that offers very transparent fee details is TransferWise and they charge a flat fee of 0.82% to India. We hope rest of the online money transfer services to India catches up with TransferWise and start offering transparency in fees.

4. Transfer Time

A decade or so ago, one would need to wait for several weeks for completion of online money transfer requests to India from USA. Nowadays online money transfer services to India offer near instant transfers to 3-5 business days transfers.

Based on some research it looks Transfast is the first service to offer instant money transfers and other services like Xoom, ICICI Money2IndiaRemitly, etc  started offering quick transfers for the past few years. Generally these quick transfer services deposit money instantly or in couple of hours.

The instant money transfer options offered by money transfer services comes with a lot of gotchas. For example ICICI Money2India services offers instant deposits to ICICI bank accounts only. If the receiver does not have ICICI bank account in India, then you are out of luck in using ICICI Money2India for instant transfers. So is Xoom, which offers instant deposits 365 days a year to only PNB and HDFC bank accounts.

The quick money transfer options are good when the receiver is in pressing need for money in India. But you may want to choose slow service for better exchange rates whenever possible. The exchange rates offered for quick transfers are lower than the exchange rates offered for slow transfers. For example Transfast offers around 30 paise more per dollar if you opt for slow service. That translates to around 600 Rs more money on receiver’s pocket when you transfer 2000$.

5. Transfer funding options in USA

The three options available for funding your online money transfers to India are – ACH Deposits, Debit Cards and Credit Cards. The ACH transfer is the most preferred one as it does not attract hefty fees like Debit/Credit card transfers. A ridiculous amount of fee is charged for Credit & Debit card based transactions, while many services waive off  transfer fees if you transfer more than 1000$.

Having said that you may want to have all options available to fund your transactions while choosing the service. Though it is expensive and not advisable to use Credit card, you may want to have the option where there is a pressing need for extra funds.

6. Money receiving options In India

The common options available for receiving money in India are through bank deposits, cash pickups, cheque/demand draft deliveries. While almost every online money transfer service to India offers bank deposits, several of them offers cash pickups.

India is still heavily cash based economy and several receivers in India does not have a bank account. So picking up cash is still the best option for them. Due to this, many new money transfer services are investing heavily to setup cash pickup locations across India.

The Cheque/Demand draft delivery is offered by few services like Axis Bank and ICICI Money2India. When bank deposits or cash pickups is not a good option, you may choose to send a Cheque or Demand Draft.

Depending on your needs make sure the money transfer service to India supports the options you like.

7. Customer Support

A good customer support comes in long way and helps you when you get into trouble while transferring money to India. For most of the situations you may not required to get in touch with customer support. But when money transfers are either blocked or delayed for a long time then you need good support to sail through the bad days.

While traditional Indian banks who offers online money transfer services are not known for good support, the USA based startups tend to provide better support. You should go through the online reviews and read them to understand the support customers get when they are in need.


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