Banks charges over 7 percent to transfer money internationally

The report by FXCompared.com begins a regular monthly index measuring the effective cost of shifting money through both banks and the money transfer companies that have begun to put pressure on a business previously regarded as a big cash cow for lenders.

The index measures the cost - including fees and the spread to the central market rate at which banks trade currencies with each other - for a range of transaction values and currencies. Those are gathered by shopping expeditions at dozens of Canadian, U.S., Australian and UK banks and brokers.

The new generation of web-based transfer firms have poured cash into advertising highlighting the profit banks take when moving money between accounts in different jurisdictions or currencies.

The results of the study show banks charge three or four times more than such providers for transactions worth the equivalent of 1,000 pounds sterling. The charge drops to less than three times for transactions over 10,000 pounds.

Costs in Canada are noticeably lower than in the United States, where capital and regulatory barriers have made it harder for broker-style operations like Transfer wise or World First to break through.

In the summer holiday months, costs at UK banks were also a quarter less than the U.S. equivalents.

"With all of these fintech-style operations out there, there has been pressure coming to bear on the banks," said FXCompared Chief Executive Daniel Webber. "The UK is the place where the banks have taken the biggest bashing on this issue.

"But we would also stress that the difference does come down the further out the curve one goes on transaction values."

Source : The Fiscal Times

Time: 17:42 GMT

Date: 19/11/2015

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Annual remittances for studies abroad near $500m mark

Over $300 million was sent as outward remittance in just five months (April-August 2015)

India, the world's largest remittance recipient, is also witnessing a sharp rise in outward flows linked to ‘studies abroad’ at a time the foreign education fad has picked up pace.

This is evident from that fact that over $300 million was sent as outward remittance in just five months (April-August 2015) for this purpose compared to $277 million that was sent in the full financial year (12 months) ended March 2015.

A slightly longer-term analysis of data provided by RBI shows that outward remittances for ‘studies abroad’ have actually gone up sharply. For a 12-month period starting September 2014 and ending August 2015, such outward remittances amounted to $492.5 million.

In the same period a year before, outward remittances stood at a paltry $180.7 million. This represents a 172 per cent massive jump in such outflows.

Beside other factors, the penchant for American education is also boosting outward remittances for studies abroad. "Indian student enrollment in US institutes spiked by a massive 30 per cent over previous year leading to sudden increase in outward remittances for studies abroad. Despite this increase, outward remittance under studies abroad will not have any measurable impact on the rupee as it accounts for a small fraction of our balance of payments," said Abhishek Goenka, MD & CEO of forex advisor IFA GLOBAL.

With a large number of students opting for non-American education as well as rising living expenses, remittance firms are also handling large outflows.

For instance, in the first half of the financial year 2015, UAE Exchange handled outward remittances from India to the tune of Rs 544.53 crore for FCDD (foreign currency demand drafts) and Rs 563.91 crore for maintenance expenses of close relatives. This was 62 per cent more than what the organisation had handled as transfers during the same period in 2014.

Said Promoth Manghat, CEO, UAE Exchange "This hints at the renewed vigour of Indians to send money beyond the borders, which is triggered primarily by foreign education in UK, Australia, USA, New Zealand, Russia and the Philippines. Along with the growing tuition fees, the living expenses of these countries are also spiraling, impacting remittances."

A senior official at one of the top private sector banks said: “We have been seeing normal growth in outward remittance business. About 20-25 per cent growth is what we have witnessed. We haven’t seen any sharp jump although there is a spike just ahead of the academic calendar year abroad. Rupee depreciation can also be one of the factors for the jump. From 62 levels against dollar in April, the local currency had moved to about 66 at August end. This means you had to pay 6-7 per cent more in rupees for every dollar sent abroad at the end of August.”

The World Bank in a recent report has mentioned that the Indian government raised the permissible limit on outward remittances from $125,000 to $250,000 (with further allowances for education and medical expenses).

The limit under liberalised remittance scheme (LRS) for resident individuals was reduced to $75,000 from $200,000 in 2013 as a measure to curtail foreign exchange outflow and support the rupee. This limit was later hiked to $125,000.

Source: mydigitalfc

Web:    http://www.mydigitalfc.com/

Date:    17/11/2015

Time:   12:18 (GMT)

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Foreign money switch: the last word information to shifting cash overseas

Demand for services has exploded in the past few decades as Britons have an increasing number of reasons to exchange large sums of pounds into, mostly, dollars or euros.

This is because more people are buying and selling property abroad and need to move the deposit, or the proceeds. There’s also a need for regular sums to be transferred, which could be from a pension or savings moved to help pay bills or an overseas mortgage.

Because of increasing migration, be it from the UK to Australia or Florida or Poland to Britain, there’s also increased demand for smaller payments be made to families.

Here’s the catch. Transferring money between banks accounts in one country is easy, with payments made using a wide array of platforms – over the phone, from a desktop computer or on a smartphone. However, it is not quite as simple when it comes to transferring money overseas.

The alternative is an array of specialist brokers, which makes up the other 20pc of the market, Currencies Direct, Moneycorp, the Post Office, Hifx and the newer, no-frills operations such as Transferwise.

There are several factors involved that are worth thinking about before making the transfer. Fees and exchange rates need to be considered which are significantly different depending on what provider you choose to make your payment. Other things to consider are how much you need to transfer, how quickly you need the money to arrive and whether it is a one off payment or needs to be carried out regularly – all of these carry different costs and will affect how you decide to pay.

What do I need to make the transfer?

To make an overseas payment, you will need:

1.    Your bank details

2.    Recipient’s details – name, address, name and address of bank, country they hold the account in. You will also need their International Bank Account Number (IBAN) and Bank Identifier Code (BIC)

What fees are involved with the banks?

Typically, providers can charge a fee which is made clear. The fees differ depending on what country the payment is being made to (it can be more expensive outside Europe), how much money is being sent and how fast it needs to be received.

Bank 
Fee for European transfers 
Fee for rest of world transfers 
Natwest 
£10 
£22 
Halifax 
£9.50 
£9.50 
Barclays 
£25 
£40 
Nationwide 
£20 
£20 
HSBC 
£0 (if both sender and recipient have HSBC account), £4 if not* 
£0 (if both sender and recipient have HSBC account), £4 if not* 
Santander 
£25 
£25 
RBS 
£10 
£22 (£30 for express payments)

High street bank overseas payments charges

* Online payments

There’s also differences if you make payments online or in branch. For example, Lloyds charges £10 for payments of less than £5,000 and £17.50 on amounts above this if the transaction is made online. However, transfers made in branch or on the phone cost more – a £20 fee for payments below £5,000 and £35 on higher transfers.

In the same way, HSBC customers who make payments into an oversea HSBC account in branch must pay a £20 fee. To any other bank it costs £9 to countries in the EEA (European Economic Area – the EU plus a few other countries) and £30 to those outside.

A less visible “fee” will also apply which is connected to the exchange rate. Not every service offers the same exchange rate, which changes by the second. This marked-up rate often goes unpublished which means it is often referred to as a “hidden fee”.

Your bank should tell you the exchange rate when it is asked, but unless customers ring up every provider for a quote, it is difficult to compare which one is offering the best rate.

Andrew Hagger of MoneyComms says customers tend to look to their bank first as they assume all charge similar amounts. However, this is not the case and Hagger suggests the system is akin to that of an overdraft in that “the tariffs are all different and the customer is bamboozled with rate and fee combinations and doesn’t know which service to choose”.

Hagger added: “I think the key message is to use a specialist foreign currency specialist and avoid the high street banks – it’s just one of many services that banks offer but it’s not their bread and butter and hence their prices are not competitive.”

There may also be a charge to receive the payment – the beneficiary will pay this unless you choose the “sender to pay all costs” option.

• READER OFFER: First transfer free with

How safe is currency exchange?

Deposits held in a bank or building society are protected under European law. They are bound to insure funds up to €100,000.

With other money transfer services, the rules are slightly different. They are not committed to hold deposits in the same way as banks – they are just transferring money which means they are not covered by EU regulation.

The companies may be “authorised” or “registered” by the Financial Conduct Authority (FCA), which are very different things.

An FCA “authorised” service means your funds cannot be “co-mingled” – they must be kept separate from the company’s money for two working days. At the end of this time, the cash must be safeguarded and held in a different bank account. This means that if the company goes bust, your money would be easy to untangle and you should get it back.

Companies that are FCA “registered” do not offer any protection.

You can check which companies are regulated on the FCA .

The list of major currency exchange services that ARE authorised includes: Moneycorp, Western Union, Transferwise, HiFX, Caxton FX, Halo, Currencies Direct and Moneygram.

Who provides an overseas money exchange transfer service

Whether you are wanting to transfer money abroad to a friend, or buy an overseas property, there are several companies who offer the service and it is worth speaking to a few before committing to the payment.

1.    Your bank – safe but uncompetitive rates
While it might be easiest option to use your bank to make the overseas payment, it may not be the best. The Money Advice Service suggests it is good for small, regular payments, however there are fees involved which could stack up.
One way to cut costs is to find out if your bank has an overseas branch, like HSBC.

2.    Specialist brokers – best for transfers over £5,000 but shop around 
For those planning on transferring large amounts – moving savings abroad or buying a property – it is worth tracking down the best exchange rate from a specialist broker. Exchange rates change daily, but with FX companies they are easy to compare. It is worth shopping around as even the smallest mark-up could make a large difference. Some of these firms, arguably, offer a more personal service. Customers sometimes get a personal account manager, for instance.

With large sums at stake, be sure you are dealing with an FCA authorised company. A firm that is simply registered will offer no protection. For those who are nervous, find out what your bank is offering and compare. However, Jason Porter, director of expat wealth planner Blevin Franks, says you’re unlikely to get a good rate as banks do not generate sufficient profit from large, one off payments.

3.    Online services – attractive rates but no face to face service
Low-cost, online services are less well known but can charge more competitive prices thanks to lower overheads. This is where you’re more likely to find companies that are only registered and not authorised.

Firms are likely to have transfer limits. For example, Transferwise allows transactions up to £1m whereas FairFx has a limit of £250,000. Regardless of the amount, make sure you establish if the service has the funds you need to transfer before going ahead.

Exchange rate contracts, orders and plans

A forward exchange contract (FEC) or simply, a “forward’ is designed to protect customers against fluctuating exchange rates. This could prove useful when making future payments, such as purchasing a new-build which could require stage payments for 12-18 months while the property is being finished.

The price paid for the currency is agreed on the day and then remains valid for up to two years.

To illustrate why customers might be wise to consider a forward exchange contract, the Financial Ombudsman had this to say: “We recently saw a case where a consumer had sent money in sterling for a house purchase in Australia.

“They didn’t opt to convert the money in advance and were subsequently horrified to find themselves £20,000 short when the money was converted. We didn’t uphold the complaint as the bank hadn’t made an error and had highlighted the options.”

For overseas transfers of more than £5,000 consider a specialist broker for better exchange rates than your bank can offer  Photo: (c) Vasiliki Varvaki

Blevin Franks’ Mr Porter also recommends looking at other options, depending on what you need to make the transfer for.

1.    Spot contract. This allows you to buy or sell currency ‘on-the-spot’ to be paid immediately or on the ‘spot date’, which is usually two business days later. It’s ideal for people who need to transfer money quickly, and enable you to buy foreign currency immediately.

2.    Stop loss order. This type of order allows you to protect your losses if the exchange rate works against you. Customers can set a limit of the minimum and maximum rate they require to make the transaction, which is useful for those who want to make a large transfer but with no time constraints.

3.    Regular payment plan. This plan is suitable for those making regular transfers, like paying an overseas mortgage or moving UK pension payments abroad. The exchange rate can be fixed for two years and is usually offered at a competitive rate. However, once you’ve agreed to the plan, you are locked in. Mr Porter suggests considering anything that might affect your monthly transactions, like mortgage payments.

Marianne Gilmore, director of Moneycorp, said: “There are more flexible alternatives available to expats who expect to see more advantageous rates in the near future, such as a ‘market watch’, ‘limit order’ or a ‘stop loss’, which allow you to exchange once rates reach a previously agreed level.

“However, it is worth noting that a market watch is not a firm order to buy or sell a currency. If the rate you have asked to be watched is reached outside trading hours, you may in fact miss the target rate you are looking out for, unless it is still available once normal next working day office hours resume.

“Limit orders and stop losses are firm orders and can form part of a strategy to target a best-case scenario rate of exchange (limit order), or worst case (stop loss) where you cannot afford for the rate to move any further away from a certain exchange rate. Both are excellent tools and are worthy of serious consideration; a) to potentially achieve an advantageous target rate that is not currently available; and b) to limit downside risk if the rates move adversely against a client. “

Source: The Standard Times

Website: http://www.salemstandard.com/

Date: 16/11/2015

Time: 18:15 GMT 

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How social media is reshaping global money transfer

Social media: Great for sharing pictures, messaging friends and following celebrities, plus, according to one fintech start-up, sending cash around the world.

Singapore-based Fastacash believes social media is the key to making international money transfers faster and cheaper.

The three-year-old start-up has launched a remittance app called XOPO, which allows users to make cross-border payments via social networking websites including Facebook, Twitter and WeChat.

Fastacash claims its app is the first to allow users to send and receive money around the world via more than one social network.

"Everyone talks about the sharing economy but what people are not doing via these networks is sharing economics. They share videos and photos, but they are not sharing real economics such as money," Vince Tallent, chairman and chief executive of Fastacash, told CNBC in a phone interview.

"So we want to bring transaction capabilities to these communication networks. By making international transfers a social activity, not only are we disrupting how billions of dollars are moved across borders, for the first time people will be able to transact in the same way as they communicate, with no barriers and boundaries," he said.

At the moment, social media giant Facebook allows peer-to-peer (P2P) payments via its Messenger app for free, while China's dominant messaging app, WeChat, charges a fee of 0.1 percent for spending and transfers over 20,000 yuan ($3,141) per month between its users. However, both networking sites only allow payments to be made between users based in the same country.

In the case of XOPO, senders will need a debit card and a smart device. Once the app is downloaded onto the device, the sender can select a recipient to make payment to via any of the social media channels they are connected by. XOPO charges a flat fee of $4.52, regardless of the transaction size.

Recipients can receive money in their bank accounts or choose to collect them from the offices of Xpress Money, a global money transfer company which has partnered with Fastacash to provide the new service.

According to World Bank estimates, more than 90 percent of fund transfers are sent to family members, who are usually connected on social networking websites. This connection between senders and recipients gives social media with a huge potential to disrupt the remittances market, analysts say.

"In the U.S., social networks and messaging apps such as Snapchat and Facebook Messenger have been rolling out P2P payments but so far these have been limited to payments within the same country," Jack Kent, mobile director for IHS Technology, told CNBC via an e-mail interview.

"Given the scale of the international remittances market and the reach that social networks and messaging apps have, it makes sense for remittance companies to try to take advantage of such apps."

But the issue of security stood out as a major concern among consumers who spoke to CNBC.

"I use social media such as Facebook very often so the concept [sounds] convenient but I am not sure if I want to try because I am worried if my money can reach my family safely," said J.M. Caspillo, a healthcare worker from the Philippines who moved to Singapore three years ago. Caspillo sends home about 20,000 pesos ($425.31) a month via a remittance center.

IHS's Kent agreed. "Security can be a concern for all mobile financial services and is a challenger for international remittance. Partnering with the necessary financial institutions is vital," the London-based analyst said.

But Fastacash believes that its partnerships with well-established financial institutions such as Singapore's biggest bank, DBS, will help instill confidence in consumers. The fintech company previously collaborated with the Singapore lender on the bank's "DBS Paylah!" app. DBS Paylah! is a mobile wallet that allows fund transfers using a mobile phone number.

"Security is of utmost importance to us and the way we address that is we ensure partnerships with tier-1 brands such as DBS, ICICI Bank and Xpress Money. These partners have been moving money around the world for years and they are regulated by regulatory bodies. Having trusted payment brands like these is critically important for us," Tallent said.

For now, the XOPO app is only available in the U.K., where users have had the ability to send funds to countries including India, Nigeria, Pakistan and the Philippines since October 28.

According to Fastacash, the U.K. is the world's fourth-largest source of remittances, behind the U.S., Saudi Arabia and the United Arab Emirates with annual cash outflows estimated at over $25 billion.

In addition, the U.K.'s status as "one of the leading fintech hubs in the world" makes it an important market, Tallent said.

Fastacash aims to make the remittance app available in countries including the U.S., Canada and Australia. While the start-up declined to reveal a timeline for Asia, Tallent said the roll-out of the service in this part of the world, in particular China, was just "a question of time."

 Source: CNBC

Author: See Kit Tang

Web: http://www.cnbc.com/

Date: 13/11/2013

Time: 17:02 GMT

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Western Union Appoints Elizabeth G. Chambers Chief Strategy and Product Officer

The Western Union Company WU, -2.54% a leader in global payment services, today announced the appointment of Elizabeth G. Chambers to the newly-created role of Chief Strategy and Product Officer. Chambers will play an integral role in positioning Western Union to accelerate the realization of its strategic growth plan.

 She will facilitate the alignment of investment priorities across the organization and drive cross-functional synergies, as the company pursues its omni-channel strategy to enhance and grow its consumer retail, digital and B2B businesses. “We are thrilled that Elizabeth will be assuming leadership of this important role within our organization,” said Western Union President and Chief Executive Officer Hikmet Ersek. “She brings an excellent track record of omni-channel development and brand transformation to the Western Union team. Her expertise in developing market-leading products and partnerships will be critical as we execute on our strategic vision.” Chambers will report to Ersek. Chambers has 30 years of business experience that spans financial and professional services, corporate strategy and marketing in a global, multi-business context, as well as start-ups and turnarounds.

 Most recently, she has been a board director and advisor to financial institutions, and served as Chief Marketing and Business Development Officer at Freshfields Bruckhaus Deringer, the international law firm. Prior to that position, she held a range of senior marketing roles at Barclays plc, including as Chief Marketing Officer of retail and commercial banking and Barclaycard. Her tenure at Barclays was marked by a string of market-leading product innovations and partnerships, as well as digital channel development and brand transformation. Before joining Barclays, Chambers held C-suite level strategy, marketing and new business development roles at Bank of America, the Reader’s Digest Association and Bingham McCutchen. Earlier in her career, Chambers was a Partner in the Financial Institutions and Organization practices at McKinsey & Company. While at McKinsey, Chambers co-authored the “War for Talent” study, published in Fast Company, the Harvard Business Review and several other publications, including the McKinsey Quarterly. “Western Union is well positioned to transform the money transfer and payments experience for its global consumers and business customers, and I am excited to help them advance their client focused-strategies,” said Chambers.

 “I am attracted to the Western Union brand because of its world-class infrastructure, geographic reach and risk management capabilities, and its commitment to innovative application of technology to deliver faster, more effective ways of moving money across borders. I am confident that Western Union’s outstanding brand, technical backbone, and customer understanding will be the keys to delivering industry-leading products and accelerating growth.”

 About Western Union The Western Union Company WU, -2.54% is a leader in global payment services. Together with its Vigo, Orlandi Valuta, Pago Facil and Western Union Business Solutions branded payment services, Western Union provides consumers and businesses with fast, reliable and convenient ways to send and receive money around the world, to send payments and to purchase money orders. As of September 30, 2015, the Western Union, Vigo and Orlandi Valuta branded services were offered through a combined network of over 500,000 agent locations in 200 countries and territories and over 100,000 ATMs and kiosks, and included the capability to send money to hundreds of millions of accounts. In 2014, The Western Union Company completed 255 million consumer-to-consumer transactions worldwide, moving $85 billion of principal between consumers, and 484 million business payments.
 For more information, visit www.WesternUnion.com

Source: Market Watch
Web: http://www.marketwatch.com/
Date: 13/11/2015
Time: 09:19 GMT

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Telecash subscribers to receive money instantly

Telecel Zimbabwe has announced that it has been granted authority by RBZ to receive incoming international remittances directly into subscribers’ Telecash wallets and will be working with Mukuru to immediately avail the service to its customers.

Plans are also at an advanced stage to include Western Union as a partner.

“Zimbabwe has a huge diaspora community which looks after family and friends locally and this new international remittance licence will have a huge impact on the convenience our Telecash subscribers experience while receiving money from outside our borders,” said Telecel’s Head of Mobile Financial Services, Arthur Matsaudza.

“The licence to receive incoming international remittances has been granted to us following Telecel’s compliance with the strict regulations and requirements that are in place to ensure the security of depositors’ funds and to prevent financial crimes like money laundering,” Mr Matsaudza said.

Already, Telecel and Mukuru have integrated their systems so that diaspora funds can be accessed instantly when they are deposited by the sender. The integration of Telecash and Mukuru systems means that people sending money from across the border can initiate payment from outside Zimbabwe by simply providing a Telecel subscriber’s telecash registered mobile number and the money will be deposited instantly and directly into the receiver’s mobile wallet.

“We urge people to register their Telecel numbers on the Telecash platform to be able to enjoy this instant service,” Arthur Matsaudza said.

Telecel CEO, Mrs Angeline Vere, has confirmed that the mobile operator as part of its long term strategy is looking into using partnerships to increase the convenience of its customers.

“Our vision as Telecel is to leverage on strategic partnerships that help us improve our mobile financial services and products so that our customers can experience innovation and convenience at world class levels. Already we are currently in talks with various international remittance partners with key corridors in SA, Botswana, UK, Australia and the US amongst other potential countries. We are very confident these partnerships will change the overall mobile financial service experience our customers will have on our Telecash platform,” said Mrs Vere.

Mukuru is currently available in South Africa and the UK. Telecel is working on increasing the availability of money transfer services from countries like US, Australia, Canada and Botswana through partnerships with money transfer agents.

“The Telecash community is growing rapidly and we are proud to announce that we have now reached 1 million users. This growth means that our subscribers appreciate the convenience and the affordability that Telecash brings to them. The growth we have experienced, in recent months, is also a result of our continued effort to add new services to the Telecash menu for the added convenience of our customers,” Mr Matsaudza added.

Source: The Zimbabwean

Date: 11/11/2015

Time: 13:00 GMT

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Save money on currency transfers and payments

There are numerous reasons to send money abroad. Aside from the most popular – buying property – many people have to repatriate wages from abroad into pounds, send money or an inheritance sum to loved ones, or even settle bills in other currencies.

Whatever your situation is, using a foreign exchange specialist can provide you with a number of advantages over using your bank. Not only could you save considerable sums of money due to more competitive exchange rates, but the transfer fees are generally lower too. Plus, expert guidance can help you insulate your money from the unpredictable fluctuations of currency markets.

These are all reasons that the Telegraph has partnered with foreign exchange experts moneycorp, to bring our readers the Telegraph International Money Transfer Service. Below we look at a few of the reasons why the financially savvy are using a foreign exchange specialist instead of a bank:

Save money on transfers

Many people still don’t realise that using a bank to transfer money abroad could be costing far more than it needs to. This is because the exchange rates offered by many high street banks are typically 3–4pc more expensive than a foreign exchange specialist like moneycorp. You only need to consider buying a home abroad to realise the impact this could have. On a transfer of £250,000, for example, a poor bank exchange rate could cost you up to £10,000 extra.

Guidance to protect yourse lf from currency market fluctuations

The pound is relatively strong at the moment, which is great news for anybody using sterling abroad. But currency markets are known to be unpredictable, and any number of one-off events – from a political announcement to a piece of bad economic news – could see the pound relinquish its strength in a matter of days, even hours. The good news is that getting personal guidance from one of moneycorp’s specialists can help you to plan for adverse changes in exchange rates, using what is known as a ‘forward contract’. This allows you to fix a rate that you are happy with so that if there is a sudden currency market movement, it does not impact you. This can be particularly useful when buying a property, as a significant movement in exchange rates could end up scuppering your plans entirely.

A convenient online service

In a similar way to online banking, moneycorp enables you to manage your international transfers at the click of a button. This, of course, can be done from anywhere, without the need to rack up costly international call charges from abroad. What’s more, the transfer fees are only £4 when done online (compared to £20-40 for most high street banks).

And like online banking, once you have made a payment, the details are saved so that it is even easier to make a transfer the next time round.

Regular payments

As more and more of us have interests abroad these days, it is likely that some need to make regular payments abroad. It could be transferring pension money to cover expenses on an overseas property, for example, or converting sterling wages into the local currency of wherever you are working. Such recurring international payments can be done using moneycorp’s Regular Payment Plan, which allows you to set up repeat payments at a schedule of your own choice, whether weekly, monthly or even at irregular intervals. You can also fix the exchange rate so that you know exactly how much money is leaving your account each time, and you receive the peace of mind of a more competitive exchange rate on every individual transfer.

Security

These are just some of the reasons that more than 8,000 Telegraph readers have already taken advantage of the service. Last year alone, our partners moneycorp conducted about 9.2 million currency transactions in total.

The company is authorised and regulated by the Financial Conduct Authority for the provision of payment services and customer funds are safeguarded in segregated client accounts.

The Telegraph International Money Transfer Service offers great exchange rates, low fees, expert guidance and a secure service.

Source: The Telegraph

Website: http://www.telegraph.co.uk/financialservices/money-transfer-and-expat

Date: 11/11/2015

Time: 12:48GMT

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Transfer Money2World at a click

Under the liberalised remittance scheme, all resident Indians are allowed to freely remit up to $250,000 in a financial year (April-March) for any permissible current or capital account transaction. While most banks offer this service to their customers, ICICI Bank has recently launched its online product Money2World, claimed to be India’s first fully online service that enables a resident to transfer money online from any bank in India to any overseas bank.

How does it work?

Using ICICI Bank’s Money2World, you can transfer money in 16 currencies. As the first step, you need to complete the one-time registration by providing your personal details, such as name, address, etc. Besides, you also have to ensure compliance with the Know Your Customer (KYC) norms mandated by the RBI. Finally, you must furnish account details of the beneficiary you intend to transfer the money to. Upon initial registration, it takes about 24 hours for KYC verification after which you can start transferring money.

Once the amount to be transferred is entered, the confirmed currency conversion rate will be displayed.

This rate has a validity period. If you initiate the outward remittance before 3 pm on any given working day, then the conversion rate is valid till 7 pm on the same day. The exchange rate for a transfer initiated after 3 pm is valid till 9:30 am the next day.

What is validity period? The amount you intend to remit should get transferred/debited from your account before this cut-off time of either 7 pm or 9.30 am. If you fail to meet the cut-off time, you have to repeat the process all over again. Once the transfer is done, the beneficiary’s account will get credited within one international working day, if the transfer is initiated before 3 pm.

For transfers initiated after 3 pm, it takes two international working days for the amount to get credited. This excludes the weekend and holidays in both India and the country you intend to transfer the money. A flat charge of ₹750 plus service tax per transaction is collected as fee, immaterial of the quantum you remit.

Money2World, being an online product, enables you to do the transaction from the comfort of your home. It saves a lot of time which you would otherwise have to spend in visiting the bank branch to submit the required documents to make the transfer.

When it scores

Although other banks allow you to remit money using their internet banking facility, the service is available only to account holders. But Money2World allows individuals holding an account with any bank in India to transfer money to any bank abroad.

The other advantage with Money2World is that the service is available round the clock. In contrast, most banks have cut-off time for their outward remittance service. For instance, private banks, such as Axis Bank allow fund transfers only during banking hours — between 10 am and 4 pm.

On the flip side, you need to possess Aadhaar card to complete the KYC process. Those without an Aadhaar card cannot use this product.

The premium charged on the exchange rate seems higher; you may have to shell out more than ₹1 per unit of foreign currency. For instance, on November 3, after the spot market closing, the exchange rate quoted by Money2World was 66.91 a US dollar.

This is higher than the RBI reference rate of 65.45 on the same day. Similarly, for euro the exchange rate quoted by Money2World was 73.85, implying a ₹1.75 premium to the RBI reference rate of 72.1.

Money2World may come in handy in times of emergency, when you want to remit money instantly, say during odd hours.

But if you have enough time to remit the money, doing it directly through your bank may work out cheaper.

Gurumurthay K

 Sources: Business Line

Website: http://www.thehindubusinessline.com/

Author: Gurumurthay K

Date: 09/11/2015

Time: 12:43

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Cost of remittances likely to come down

With remittance to India is expected to increase by 2.5 per cent in this calendar year, the costs of sending remittances likely to come down further with many initiatives of the Government and the Reserve Bank of India (RBI), like Payment banks.

However remittances to developing countries are expected to rise by about 4 per cent in 2016 and 2017, buoyed by the continuing recovery in the United States and a modest acceleration of economic activity in Europe.

“It is hoped that India’s new payments banks will expand penetration of the banking sector in rural areas, thus increasing competition in the remittances market,” says the recent World Bank's report on Migration & Development Outlook which indicates remittances to India continue to grow steadily.

The report says that the decision by the Reserve Bank of India (RBI) to grant ‘in principle’ approval for 11 entities to set up payments banks, which would be directed at small savers in underserved (largely rural) markets, could help transform the rural remittances market.

The entry of new players is likely to increase competition, lower remittance costs, and extend the formal market for remittances.

Unlike earlier, emigration from Northern parts of the country is on the increase compared to Southern India as per the State-wise figures of workers granted Emigration Clearance / ECNR Endorsement during the last five years 2010-2014. In 2014, UP is the highest - 229,444, followed by Bihar - 98,721, Tamil Nadu - 83,202, Andhra Pradesh - 53,104, Kerala - 55,058, and West Bengal - 51,561.

Cost of remittance to India

Currently post office money orders cost about 6.4 per cent, hawala channels around 4.6 per cent and banks 3 per cent of the money transferred. “The extension of banking services and mobile money transfer to rural areas could thus significantly reduce remittance costs in rural areas,” the report adds.’

As per Remittance Prices Worldwide (a World Bank website), average remittance cost for sending money (for sending US$ 200) from UAE to India is 2.8 per cent. Similarly, from US to India average remittance cost is 3.06 per cent (for sending US$ 200). Both data are for the July - September 2015 quarter.

The global average cost of remittances remained at 7.7 per cent, targeted to be reduced to 5 per cent as set by G20 countries and World Bank.

The World Bank noted Indian government’s efforts of establishing a fund to assist the Indian diaspora in legal cases, and of a web portal to facilitate low-skilled migration. The government also raised the permissible limit on outward remittances from $125,000 to $250,000 (with further allowances for education and medical expenses), and eased limits on investment by the diaspora.

According to Remittance Prices Worldwide (RPW), the global average cost of sending remittances (including all fees and charges) was 7.68 per cent in second quarter of 2015, remaining essentially stable compared to the previous quarter when the average was 7.72 percent and below 8 percent for the fourth consecutive quarter.

Over the same period, the International Money Transfer Operators (MTO) Index, which tracks the prices of money transfer organizations that are present in at least 85 percent of corridors covered in the RPW database, experienced a decline of 2.2 percentage points, from 10.5 per cent in the first quarter of 2009 to 8.2 per cent in the second quarter of 2015.

The average cost of sending US$ 200 in the second quarter of 2015 was the lowest in South Asia (5.7 per cent), which represents a marginal decline from the previous quarter.

The three lowest-cost corridors (Saudi Arabia-Pakistan, Singapore-Bangladesh and UAE-Pakistan in South Asia all have cost below 3 per cent. However, the three highest cost corridors (Singapore-Pakistan, Switzerland-Sri Lanka, and Japan-India) have costs well above 10 percent.

This difference may be due partly to low volumes, lack of competition in the remittance markets in some sending countries, and policy rigidities that limit competition in some market segments, says the World Bank report.

In 2015, remittance to India is expected to go up by 2.5 per cent, which is above the 0.6 per cent rise in 2014. Also, internationally remittances are categorised as payments. Hence, says Promoth Manghat, CEO, UAE Exchange, “payment banks in India have an opportunity here.”

By the RBI mandate, Payment banks are to have 25 per cent of their network in un-banked areas. They can urge the beneficiaries of the migrant citizens to receive money through banks, contributing to financial inclusion and reducing remittance cost eventually.”

“India continues to be the largest remittance recipient country and over the years we have seen an increasing trend in remittances received,” says Kiran Shetty, Western Union’s Managing Director & Regional Vice President, India & South Asia.

The remittance flow into the country is three times that of the current Foreign Direct Investment (FDI) in the country. “Increase in remittances is clearly a good sign of economic activity and with a larger number of migrant workers now, we see more money coming into the country. This serves as a good support to the balance of payments too,” Mr. Shetty adds.

“We see the new payment bank licenses by the RBI will also help the cause of encouraging people to use formal channels of remittance. Additionally, new players in the market will spur competition that could lead to lower remittance costs,” says Sudhesh Giriyan, COO, Xpress Money.

“We are bullish on this space and expect a 15 percent year-on-year growth in remittance transactions on our channel,” says Mr. Giriyan.

There are about 30 million overseas Indian workers all over the world as per the recent World Bank Report. More than 90 per cent of these workers are in the Gulf countries and South East Asia.

During 2014, about 8.04 lakh workers emigrated from India after obtaining emigration clearance. Out of this, about 3.29 lakh went to Saudi Arabia, about 2.24 lakh workers to UAE, about 0.75 Lakhs to Qatar, about 0.51 lakhs to Oman, and about 0.22 lakhs to Malaysia. States of Uttar Pradesh, Andhra Pradesh, Bihar, Kerala, Tamil Nadu, Punjab, West Bengal and Rajasthan were the leading sourcing states in that order of the numbers who emigrated.

Source: The Hindu

URL: http://www.thehindu.com/business/Economy/cost-of-remittances-likely-to-come-down/article7855933.ece

Author: Oommen A. Ninan

Date : 08/11/2015

Time: 12:34

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