How to make international payments from India [Explained]

Whether you need to pay for tuition fees, rent, holidays or simply shopping online, making international payments from India can help you live a global life. Read on to get a step-by-step guide on how to make international payments from India.

There are 3 main ways to make payments overseas from India.

• Bank debit or credit cards
• Online money transfers
• SWIFT/ Wire transfers

Within each of the above, there are different options you can look at. Let’s take a deep dive at each one, and go over what you can consider when deciding which route to go.

Bank debit/ credit cards

Most banks in India allow for international transfers and payments through your debit or credit card. Banks have linked up with companies like Visa, Mastercard, Amex, or other transaction processing firms so that your card can be processed overseas.

But this is a feature that you may have to activate for your Indian-issued debit or credit card if you want to use it for international transactions- including those on online shopping sites. You can usually activate it online through your bank’s online banking facility.

Some cards are specific to international purchases or transactions, and they should be ready to use from the start. Several bank debit and credit cards now come with an EMV chip embedded in the card to make international transactions hassle-free and secure.

Here is a step by step guide to using a bank debit or credit card for international payments:

1. Ensure that your card works internationally by confirming the card or activating the international purchases feature online
2. Sign the back of your card
3. Use the card either by swiping in person or inserting the chip into the reader or by entering your card details on a payment page online
4. Look over the details
5. Confirm your transaction

Using a bank debit or credit card can be an easy choice for international payments since it is the same card you use within India for domestic purchases. But, the same card used internationally can end up costing you more because of international transaction fees and hidden fees with exchange rates.

Make sure to check your bank’s fees and charges for using your debit or credit card abroad.

Online money transfer

A more modern way of making international payments is through online money transfers. These options can be fast, secure, and easy to send money to more places, and can be simpler. And you can often access online money transfers straight from an app on your mobile at any time.

Let’s take a look at two popular options- PayPal and Wise

PayPal

PayPal leads the way in online money transfers, and now has millions of users and businesses on its platform. It is a seamless way to transfer money and make purchases on its marketplace, but it first requires your recipient party to also have a PayPal wallet.

This can be an additional step that your recipient may not want to take, but if it is already set up PayPal can be a quick and cheap way to send money without paying any foreign transaction fees.

⚠️ PayPal is no longer available for Indian users to send money globally. PayPal India is only functioning as a marketplace for users to shop in or as a business storefront for Indian businesses that want to sell abroad.³

Wise

Wise offers easy low-cost international transfers. Wise saves money for you by using smart tech to make payments quickly and securely to local currency bank accounts. Wise is regulated by FCA, and is trusted by over 12 million people around the world.

Wise Web/Android/ iOS app is an easy, fast and cheap way to send money around the world

Doing business overseas? Wise can save you money for receiving international business payments

Wise offers Indian businesses and freelancers with account details in 8 different currencies to receive payments from abroad. Your clients pay you with a local transfer in their currency, and you receive rupees in your INR bank account — with eFIRC for every transfer. That is truly business without borders.

Get started with a Wise Business Account 🚀

SWIFT/ Wire transfer

SWIFT or wire transfers are one way to transfer money from your bank account to another abroad. This works well for transactions like tuition payments, deposits, or any larger purchases, versus online shopping.

SWIFT is the name of the global financial system that allows banks to send money to each other globally. Most of the medium and large private and public banks in India are part of SWIFT, but it doesn’t hurt to double-check.

Also, when sending money overseas from India, make sure to get your recipient’s bank account information and their bank’s SWIFT code.

Here is how it works SWIFT and wire transfers work with banks and Western Union:

Banks

The easiest and fastest way to do a SWIFT or wire transfer with your Indian bank is through online banking. Here are the steps, although they may vary from bank to bank:

1. Sign in to your bank’s online or net banking system
2. Click on the tab for “Transfer” or “Funds Transfer”
3. Select international transfers
4. If this is the first time with your recipient, add their details as a beneficiary (it may take 30 minutes to confirm)
5. Once the beneficiary is confirmed, head back to international transfers
6. Input the amount to send
7. Input the reason for sending
8. Confirm your transaction

One point to note is that the Reserve Bank of India, or RBI, has specific guidelines on how much money you can send outside of India and for what reasons. You can send a maximum of USD 250,000 in one year, and a few of the reasons are:¹

• Travel
• Medical expenses
• Educational expenses

If you are not comfortable with sending money online, you can also get set up and do your transaction at your local bank branch too.

Western Union

⚠️ Western Union can send money from India, but it can only be used for transfers to international bank accounts.

So similarly to a bank transfer, this can not be used for shopping and is better suited for larger purchases.

There are popular routes to countries like the UK, US, and Europe which can make Western Union easier and cheaper than going through a bank. Here is how it works:

1. Register online for free on the Western Union website
2. Enter in your details, including your PAN card
3. Once confirmed, head back to the Western Union website to log in
4. Click on Send Money
5. Select what country the money is going to
6. Input the amount to send in INR or the receiving currency
7. Click on “Send to a bank account”
8. Choose how to make the payment for the transaction
9. Check the fees and delivery time on the screen
10. Submit your transfer

Western Union typically has a transaction fee and sets its own exchange rate on every transfer, so keep an eye out for how much it is costing you. That being said, you can save time and money through Western Union versus traditional methods.²

What to consider when making an international transfer

It can feel tricky deciding which way to go to complete an international transfer or payment from India. All the options are viable ways but it's about finding the right one for you. Here are a few ways you can find the best service for you:

Trust and safety

Make sure you are working with a money transfer partner you trust, especially with your and your recipient’s financial information. And you also have to trust that the money is transferred safe and sound. A great way to find a trusted partner is to understand how many users or customers they have for money transfers. The more, the better.

Also, if you are inclined, you can look at safety and security details in depth for online money transfers. Most modern companies provide transparency in how transfers are done and your information is protected.

Fees and charges

A service provider's fees and charges can make a big difference in how much a payment costs. There are 2 main fees to look out for are the transaction fee and the hidden exchange rate fee.

The transaction fee is the cost to the bank or transfer service for doing the transaction. Sometimes you may find promotions that give a 0 transaction fee and in general, the lower the better. Keep an eye out for how much transaction fees can cost across providers.

The second fee to look out for is the exchange rate fee. This is hidden in the exchange rate on your transfer, unless you get the mid-market rate. The mid-market rate is the rate you see on Google, and is the exchange rate without a markup. If you get an exchange rate that differs from that, then you know you have a hidden exchange rate.

And while a transaction fee can be high, it really is the exchange rate fee that can eat into every Indian Rupee you convert.

Transfer speed

Speed can be a big differentiator between the options on how to send international payments. Bank debit and credit cards can be immediate for purchases but can come with high fees. Wise and PayPal can also be instant or within a few minutes on popular routes. While SWIFT and wire transfers can take a few days.

How quickly you need the transfer at your destination can often be a way to make a quick decision on an international transfer.

Convenience

Ease and convenience can play a role in deciding how to make international payments, especially if you are making them often. Would you prefer completing the transaction or tracking it online, or through a mobile app? Or would you prefer sitting down in person at a bank? These are all questions to ask before going with a provider.

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Sources used for this article:

1. RBI
2. Western Union
3. PayPal

All sources checked as of 3 May, 2022