What Fees Involved in International Remittance

What Fees Involved in International Remittance

Sending money across international borders is now a part of the routine, whether it is for personal reasons, business transactions, or any other purpose like investment. However, there are certain remittance fees included in these transactions that demand consideration since they affect the total amount of money actually spent and received by the recipient. Understanding these costs is essential for anyone engaging in international money transactions.

Read further in the blog to understand different types of remittance fees and tips and methods to minimise them.

Table of Contents

What is a Remittance Fee?

When you send money abroad, the banks or money transfer services (through which you are doing the transaction), charge a remittance fee. The following points merit consideration in relation to understanding international remittance fees:

  • This fee generally covers the cost of processing the transaction including administrative expenses, regulatory compliance and operational overhead. 
  • It is charged for facilitating transfer from one nation to another.
  • It can be charged as a percentage of the amount being transferred or at a flat rate.
  • These fees vary widely depending on the service provider, the amount of money being sent, the destination country, and the speed of the transfer.

Understanding remittance fees is crucial for individuals and businesses to ensure they get the best value when transferring money internationally.


Types of International Remittance Fees

There are several types of international remittance fees that can be incurred when sending money internationally. Understanding these different fees can help you make more informed decisions and potentially save on costs. Here are the main types:

Flat FeesFlat fees are fixed charges that do not change regardless of the amount being transferred.
Percentage-Based FeesPercentage-based fees are calculated as a percentage of the amount being sent. It varies significantly between providers.
Exchange Rate MarginCurrency exchange rates offered by remittance services often include a margin above the mid-market rate. This hidden fee can significantly impact the amount received by the recipient.
Receiving FeesSome banks or financial institutions in the recipient’s country may charge a fee for processing and crediting the transferred amount to the recipient’s account.
Intermediary Bank FeesIn cases where money passes through one or more intermediary banks before reaching the final destination, each intermediary may charge a fee, which can reduce the transferred amount.
Service FeesAdditional charges for specific services, such as expedited transfers, currency conversion, or handling fees for certain types of transactions.
Commission FeesSome providers charge a commission based on the amount being transferred, which is a percentage of the total amount sent.
Compliance and Regulatory FeesThese are charges related to meeting regulatory requirements in different countries, such as anti-money laundering (AML) checks and KYC.
Cancellation or Amendment FeesIt is charged additionally for any cancellation or amendments after the transfer has been initiated 

By understanding these different types of international remittance fees, you can compare various service providers and choose the one that offers the most cost-effective solution for your international money transfers.


How to Reduce Remittance Fees

International Remittance fees can significantly impact the total amount of transactions. Here are some strategies and tips to reduce these fees:

1. Compare and Choosing the Right Provider

Banks and money transfer services have varying fee structure. Choosing a provider with lower bank remittance fees can significantly reduce costs. 

Use comparison websites and online comparison tools to evaluate different services based on fees, exchange rates and transfer times across various remittance providers.

2. Timing the Transfer

Exchange rates tend to change frequently which ultimately impacts your cost of remittance. Timing your transfers according to the favourable exchange rates can help you reduce the overall cost of your remittance.

3. Send Larger, Less Frequent Transfers

Many service providers charge a flat fee on every transaction, irrespective of the amount involved. Planning your transfers in such a way that smaller transfers combine into larger ones can reduce the impact of this fixed charge.

Also Read : How Much Money Can You Carry From India to Study Abroad

4. Using fee Remittance Form

Service providers often provide fee remittance forms which can be valuable in managing and reducing remittance costs. They may also offer lower fees or discounts if you use specific remittance forms. 

5. Opting for non-bank Transfers

Many digital platforms and mobile apps offer lower fees compared to traditional banks and money transfer services. These services are designed to be user-friendly and cost-effective, making them an excellent alternative to bank transfers.

6. Avoid Unnecessary Currency Conversions

If possible, avoid converting currencies multiple times. For example, sending USD directly to a USD account in the receiving country can save on conversion fees.

By exploring these options and staying informed about the best practices and latest technologies in the remittance industry, you can significantly reduce the costs associated with sending money internationally.

Understanding Remittance Fees Charged by Banks

Alternatives to Bank Transfers


Incurring international remittance is the most common method of remittance. However, several options can offer lower fees, faster processing times, and more convenience. These methods include:

1. Online Money Transfer Services

These online money transfer services typically offer lower fees and better exchange rates compared to banks. These services are transparent about their charges and are more user-friendly.

2. Mobile Application

Transferring money internationally through mobile phones is the most convenient method of transferring money internationally. These applications offer competitive rates and convenience.

3. Cryptocurrency Transfers

Using cryptocurrencies can be a cost-effective way to transfer money internationally, though it requires some technical knowledge and an understanding of market volatility. The recipient also needs to be able to convert the cryptocurrency back to their local currency.


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Also Read : Study Abroad Loans: Education Loan to Study in Ireland

In Conclusion

International Remittance fees play a very significant role while making international money transfers since they impact the overall cost of the transaction. Hence, it becomes necessary to understand the fees involved so that you can make informed decisions. Timing your transfers, comparing the service providers and choosing the best-suited platform can save you time and money.

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Also Read : How to Send Money From India to Philippines

FAQ of Fees Involved in International Remittance

What are the typical fees associated with sending remittances abroad?

There are multiple fees associated with sending remittances abroad including a fixed flat fee on every transaction, percentage-based fees, exchange rate margins, receiving fees and intermediary fees, etc.

How do remittance fees vary between different service providers?

All providers charge different flat fees and percentage-based fees on every transaction. Some offer discounts depending upon the competition, others may not.

Are there any additional charges beyond the stated transfer fee?

Yes. Different types of additional fees can be charged like receiving bank fees, intermediary fees and other hidden charges.

Are there any ways to minimise or avoid remittance fees?

Yes. Timing your transfer, comparing service providers, using remittance forms, choosing options other than banks like mobile applications, etc. can reduce remittance fees.

Do exchange rates affect the overall cost of sending remittances abroad?

Yes. Exchange rate margins tend to change very frequently which ultimately impacts the overall cost of sending remittances abroad.

How much are remittance fees?

Remittance fees depend upon multiple factors. Globally sending remittances abroad costs an average of 6.35% of the amount sent.

What is the charge for remittance?

The charge for international remittance includes a fee charged by the sending agent, typically paid by the sender, and a currency-conversion fee for delivery of local currency to the beneficiary in another country.

What are foreign remittance charges for HDFC Bank?

HDFC Bank charges INR 500 plus applicable taxes for remittances of up to USD 500 or equivalent. For an amount more than this limit, charges are INR 1000 plus applicable taxes.

Why are remittance fees so high?

Remittance fees are high due to operational costs, regulatory compliance, and the profit margins of intermediary banks and transfer services. Additionally, the lack of competition in certain corridors allows providers to maintain higher fees.

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