Fintech vs. Banks in India: Best way to do international money transfer 

Apr 05, 2024

It is easier to connect digitally with business partners across the world. All that is required is a powerful payment mechanism and strong digital marketing skills.


Additionally, people choose to work as freelancers, or flexible workers, these days. They can work for businesses in any part of the world. It is possible only with the best international money transfer option.


With multiple available options to receive international payments in India, it becomes difficult to find the best international money transfer option. In this article, we will discuss the best option for international money transfers. 

Receiving international payments in India


Numerous financial services can assist you to receive international payments in India. However, there are advantages and disadvantages to each in terms of expense and type of service.


The best option for international money transfers is through a bank transaction, which happens when the source of a cash transaction initiates a bank wire from their financial balance to yours.


Almost all Indian banks and money transfer services offer bank transactions, which are a safe way to receive international payments in India.


If the sender uses the SWIFT network to send money abroad and then charges network fees, bank transactions frequently become expensive. If the recipient wants money, this is the best international money transfer way to do it.


For the fastest, easiest, and cheapest methods to receive international payments in India, senders frequently choose traditional currency exchange services like Small World and MoneyGram.


These are safe ways to track your cash transactions and deliver them to your location with complete security. Many people prefer to manage their financial transactions with a mobile wallet rather than a bank account.


Although they can occasionally be used to receive international payments in India, mobile wallets are more commonly used as a means of payment. Most of the time, mobile wallets are used to manage and spend money.


They can also be used to make purchases instead of using bank cards or cash. They work with encryption innovation, keeping your bank subtleties and card data protected from outsiders.


The well-known portable wallets in India incorporate Mobikwik, Freecharge, Paytm, and Google Pay. According to the guidelines of RBI, there is no limit on these for sending and receiving international payments in India. 

Fintech vs Traditional Banks in India: For processing international business payments


The best international money transfer options include Fintech and traditional banks in India. The traditional ways to receive international payments in India are mentioned below. 


1. State Bank of India (SBI)

State Bank of India is the largest traditional bank in India. If you have a bank account in SBI, you need to know how to receive international payments in India.


When considering SBI the best international money transfer option, there are several different fees to consider:


The transfer fee is a small fee that is paid to the bank to cover the expense of processing the transfer. The exchange rate markup is a percentage charge that is included in the bank's telegraphic transfer (TT) selling card rate.


The agent and beneficiary bank charges may be initiated by the beneficiary, which means that they might get less money than you expected them to.


Fee for wire transfer: For transfers of up to 10,000 rupees, remitters in India who set up direct deposits must pay a fee of fifty rupees. There is a fee of 100 rupees for deposits exceeding 10,000.


The margin of exchange rate: State Bank of India charges a transparent exchange rate margin of 0.125 percent to receive international payments in India.



Exchange rate of SBI 


A 3% exchange rate markup on Rs. 50,000, i.e., 1,500 more. A 3% exchange rate markup on INR 100,000 charges Rs. 3,000 more. A 3% exchange rate markup on 500,000 INR charges 15,000 INR more.


Through the SWIFT network, SBI receives international payments in India and deposits funds into accounts abroad with banking partners worldwide.


Although SWIFT payments are dependable, processing times can exceed five days, depending on the particular bank. 



2. ICICI Bank

This traditional bank is another best option for international money transfers. It ensures the safety & security to receive international payments in India.


For international transactions, ICICI bank issues EMV chip debit and credit cards and Europay Mastercard. The cards have encrypted data in a microchip.


It is difficult to steal this data from the chip. ICICI bank ensures protection against skimming. Two-factor authentication, like OTP, is not required to receive international payments in India. 



Charges 


• Markup charge - 3.5% + GST


• ATM Cash Withdrawal Charges Abroad – Rs. 125 + Goods and Services Tax


• Balance Enquiry Abroad – Rs. 25. It also charges GST



3. HDFC Bank

HDFC Bank is one of the best options for international money transfers. Customers have a diverse range of HDFC ATM branches and networks.


It has digital channels for the ease of customers that include Mobile Banking, Phone Banking, and Net Banking.


Ease of transaction makes HDFC count under the best international money transfer options. Another pro of this traditional bank is that contactless payment is possible in this bank. 



Exchange rates and charges of HDFC Bank 


HDFC bank charges a margin to the rate to receive international payments in India. Because of the margin rate, international transactions become more expensive for customers.


It charges an extra penny for converting international payments to Indian currency. For $ 500, it charges INR 500 per transaction.


If the transaction amount is more than $500, INR 1000 is charged for every transaction. It also includes hidden charges. 18% of the total amount is taken as commission and fees.


If you transact more than 7 lakhs in a year, HDFC collects 5% TCS (Tax Collected at Source). Also, 0.5% TCS is collected if a transaction is initiated internationally for educational purposes.



4. Axis Bank

Another best option for international money transfers is Axis Bank. Customers can receive international payments in India by following some steps. It can be received through telegraphic/wire, cheques, and demand drafts.


Remit Money is a feature offered by Axis Bank to receive international payments in India. It has no limit in terms of transactions. Also, Remit Money can be used regardless of having a customer account in Axis Bank.


One of the drawbacks of Remit Money is that it doesn't facilitate business payment. Only individual accounts can receive international payments in India. It usually takes 2 working days to initiate payment with Remit. It also facilitates instant payments. 



Fees


Axis Bank does not charge fees on Remit Money to receive international payments in India. Although, banks do charge hidden markup. The bank charges 0.25% of the Indian currency. It also charges an amount for courier services. 

Fintech players for international payments


1. Volopay

Volopay is the best option for international money transfers. It doesn’t require customers to have several transfer accounts to receive international payments in India.


Customers can save with Volopay because it charges low remittance fees and conversion fees. It also allows you to track your payment through a real-time dashboard. 



2. PayPal

Paypal is one of the well-known names to receive international payments in India. However, it also demands conversion charges. Customers need to open an account with Paypal.


It further charges transfer fees from the customers. Individuals should choose PayPal only after ensuring that the charges suit them.




3. Instamojo

It is one of the best international money transfer options. Instamojo provides a seamless experience of payment gateway and links. It does not charge a maintenance fee, annual fee, or commitment.


The only drawback is that it facilitates only domestic payments. Multi-currency alternatives are not available in Instamojo. Payment can be processed only in Indian currency.


Customers should have direct contact with Instamojo to receive international payments in India. 




4. Payoneer

Customers have the options to pay in every currency. It makes Payoneer one of the best international money transfer options for customers. Once it is completed, customers can transfer it to their accounts in the form of Indian currency.


However, you need to pay 2% extra than the market exchange rate to receive money in your account. Also, you need to pay the transfer fees. 

Factors to consider before choosing an international payments solution for business


Some factors should be considered before choosing the best option for international money transfers. The important factors are mentioned below. 


Ease of use

One of the major considerable factors to receive international payments in India is the ease of use.


The payment gateway should be simple to integrate with the company’s website. If the payment gateway is complex, it won’t be considered the best international money transfer option. 




The time it takes to receive money

Before choosing the best option for international money transfers, check the time it takes to receive payment abroad.


Sometimes, you may have an urgency to receive international payments in India. It is important to ensure that the selected payment gateway assists you with instant payment mechanisms. 



Limits on funds

If you’re operating a large-scale business, you should ensure that your payment gateway has no limits on funds.


It is because business owners are required to pay funds for investments and growth prospects. Therefore, make sure that limits suit your business. 



Fees

The best option for international money transfers is one that doesn't demand hidden charges from the customers.


The hidden markup fees should be lesser to receive international payments in India. If the traditional bank or fintech charges higher fees, individuals will receive less payment abroad.




Security

While dealing with financial data, it is essential to consider its safety. The payment gateway should be safe & secure.


It should maintain safety standards while receiving international payments in India. The best option for international money transfers is one that doesn’t compromise the safety of financial information. 

Pick the best international money transfer option as per your needs


While choosing the best international money transfer option, the above-mentioned factors should be kept in mind. Security and fewer hidden fees should be ensured while receiving international payments in India.


The individuals can choose either from traditional banks or from the fintech service providers. Both have their advantages and disadvantages.


The best option for international money transfers depends on the requirements of the customers. To conclude, individuals must always look for the best option for international money transfers as per their preferences.