What is the remittance fee for Nepal?

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Did you know that Nepal’s 22.68% of GDP relies on the remittances it receives from other countries? Thus, this capital is quite crucial for the support of families, education, healthcare, and overall economic stability in Nepal. Interestingly, Australia is one of the top countries from which Nepal receives a significant portion of these remittances.

Thus, as thousands of Nepali migrants send money to Nepal from Australia, this remittance flow is very vital. Additionally, this money transfer is subject to a variety of fees, which have a significant impact on the amount of money that reaches the loved ones in Nepal who are waiting for it. However, understanding the structure of these fees and how to ensure you get the most value for your money can help you send money most cost-effectively.

Understanding Remittance Fees To Send Money To Nepal From Australia

If you want to know the exact fees for money transfers to Nepal from Australia, it’s important to understand the various types of charges that make up the remittance fees. These fees can vary based on several factors, such as the speed of the transfer, the amount of money sent, the remittance method, and the service provider you choose.

Factors Influencing Remittance Fees For Money Transfers To Nepal

Transfer Fee Structure

Some remittance service providers charge fixed transfer fees for all their transactions that won’t vary with the amount you are sending. Such services are extremely advantageous for businesses that conduct lump-sum financial transactions. However, if someone is transferring a small amount, they might have to deal with hefty deductions.

Certain platforms impose transfer fees with customised transfer fees, which are typically more affordable for minor transfers. Likewise, for bigger transactions, transfer fees are fairly high.

Exchange Rate

Basically, the exchange rate is a fixed market rate at which one currency can be exchanged for another. Thus, there is a specific rate at which the American currency is exchanged for Nepalese currency at a given period. However, some service providers offer a little different rate than the market fixed rate.

Even a small difference in this exchange rate could significantly affect the amount obtained by the receiver in Nepal. Mainly, the lower the exchange rate, the less money is transferred. For example, if the market rate for AUD to NPR is 90, a provider is offering 88; it means the recipient will receive much less money.

Some fraud companies might offer small transfer fees but charge poor exchange rates. Thus, it is important to consider both the exchange rate as well as the transfer fee when choosing a remittance service.

Transfer Speed

Typically, the faster the transfer, the higher the remittance fees. That’s why remittance service providers like Western Union charge more remittance fees for instant and same-day cash pickup. Whereas, for 3 to 5 days, business transfers and money transfers to Nepal are offered at a much lower cost. Similarly, bank-to-bank transfers come at lower rates due to much slower transaction time.

However, if prompt service is required, higher fees can be preferred. Ultimately, it’s crucial to weigh the choices between speed and cost when choosing a remittance service. You should align your decision with your financial situation and the recipient’s needs.

Different Remittance Methods

The type of remittance method you are choosing also affects the transfer charges for that particular money transfer. The most common methods include bank transfers and online money transfer services, remittance services, and cash pickup services. Banks are traditional remittance service providers but have higher fees and unfavourable exchange rates. However, online money transfer services such as Remitby offer a more cost-effective and convenient alternative.

What is Hidden Cost And How to Avoid It?

Apart from the general transfer fee and exchange rate, some of the service providers might also charge some hidden fees. These hidden fees won’t be as apparent during the time of the transaction, but they can cause significant deductions in the transferred amount. Hidden fees could be in the form of currency conversion markup, receiving fees, intermediary bank fees, or anything else.

The currency conversion rate is one of the most common ones in which the service provider can show a lower upfront fee but compensate it with a lower competitive exchange rate. Intermediatory banks also charge a lot of service fees, reducing the actual transferred amount. Some remittance services even have a chain of intermediates that charge additional fees, which they don’t disclose at first but impact the transferred amount.

Make sure to check for these when trusting a remittance service provider for your money transfers. You can go through the terms and conditions of their website to have clarity regarding any extra charges they apply. Always pick the provider with transparent pricing and double-check the deductions when sending money!

Comparing Remittance Service Providers Based On Remittance Fees

There are many service providers that can help you send money to Nepal from Australia. Here’s a comparison of the most popular providers:

Banks

Banks have been offering international money transfer services for ages. In Australia, the Commonwealth Bank, National Australia Bank, ANZ Bank, etc. offer money transfers to Nepal. However, their overall remittance fee is quite high for banks due to the following reasons:

The transfer fee of banks is quite high, which could range anyway between 2-5% of the transfer amount.
The exchange rates are lower, which always reduces the amount received by the recipient in Nepal.
They also charge additional fees for services such as correspondence fees, wire transfers, and receiving fees.

Money Transfer Services

Money transfer services like Western Union, MoneyGram, and Xoom are some of the famous money transfer service providers in Australia. They offer a cash pickup service in which the recipient collects cash from a local agent’s location. Also, they have a bank deposit option through which cash is transferred directly to the recipient’s bank account. However, their most convenient service is mobile money transfer, which transfers money directly to the recipient’s mobile phone.

Money Transfer Services could typically charge a fee of around 2-4% of the transfer amount, depending on the method chosen for the remittance to Nepal.

Online Money Transfer Services

Online money transfer services like Remitby, WorldRemit, and OFX have significantly transformed the remittance industry for the better. They offer more competitive exchange rates and lower transfer fees compared to traditional money transfer services and banks. Moreover, they are convenient, reliable, and secure, making it easier to send money to Nepal from Australia. However, the most noteworthy advantage is the faster transfer time, which typically occurs within just a few minutes.

Conclusion

When sending money to Nepal, it’s important to choose a remittance service provider that offers reasonable fees to ensure you maximize the amount received. However, don’t base your decision solely on remittance charges; also consider transfer speed, convenience, and the reliability of the platform. Remitby is a trusted remittance service provider that offers quick and cost-effective money transfers to Nepal. Contact us now to learn more about our remittance services.