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A quick comparison of Money Transfer Services to India

(Xoom.com, AxisRemit, PayPal, Western Union)

If you are an NRI or a PIO living in the USA, UK or some other country, you will be often sending money to parents or relatives in India. Plus, whenever you are traveling to India, you would transfer some money to India to spend on purchases (and for jewelry for your wife ;) ) You may also be investing in Indian stocks or real estate, or may have a business that employs people back in India.

Anyway, there can be variety of reason for one to come across the need for a money transfer service. Having used 4 of the leading players and alternatives, I wanted to give you a quick comparison.

  1. Xoom.com: Like PayPal, you can fund your transfer with any Credit or Debit card, or from a bank account transfer. For Credit card funded payments, they will charge a higher fee but it is still very low compared to PayPal.com. Plus, your credit card issuer may charge such transaction as money advance and you may end up paying some fees to it. So use a debit card or a bank account to lower your transaction fees. However, at the time of transfer, enter the coupon code COMEBACK2014 and your transfer will be free.
    The benefits: Your counterpart in India will get money within hours!! Plus their USD-INR rates are very good. Nice website. I loved their service when I tried it yesterday (April 28, 2014). You can access them and look at current promotions by clicking here.
  2. PayPal: http://www.paypal.com Having been using PayPal frequently within USA, and it being a leading service to accept and send payments, I tried PayPal one time (and that was the last time LOL) to send money to India. I strongly advise anyone to avoid PayPal for following reasons. * Excessive fees. Around 3% transaction fee. So for a $1000 transfer, PayPal will cost you around $30. * If the fees are not enough, greedy PayPal has the worst conversion rates. You will get lowest rupee rate for your dollars compared so I guess most other money transfer services. Plus when the dollars are converted to INR, they will charge cross currency fees too. In short, when I tried, I ended up paying almost 10% of my money to PayPal one way or the other way. That was the last time I used PayPal for transferring money to India.
  3. AxisRemit: If your relative has account in Axis bank, this can also work well for you. Their conversion rates are best in the industry. I happily used them until I found Xoom.com There are some problems with AxisRemit IMO. Their website, particularly for NRIs like us, is very difficult to navigate! You have to first click on Send Money and than have to make sure you are in the Remit to India part of the website. I couldn't feel comfortable with AxisRemit website even after few months ;) The biggest problem with AxisRemit is, it takes 5-10 days for your funds to reach India! This creates currency risks. The biggest plus about them is the best rates and no fees.
  4. Sending a check: If you are not in a real rush, you send a check to your relative to deposit in her account or in your NRE account. I used to do that years ago. This is also expensive in terms of time. Can take up to 20-30 days and you know that INR, like stocks on Wallstreet, can fluctuate significantly over the period. Earlier SBI would charge nominal fees but I am sure currently AxisBank, HDFC Bank etc. may be charging lot of fees for such overseas clearing or payments.