Indian students are increasingly choosing to go abroad. Parents too, start preparing early by saving up as early as possible. While reasons for making the move could range from a limited number of top quality programmes, the fact that foreign degrees hold more value in the Indian job market to even social factors like the snob effect, one thing that bogs down both parents and students is the finances. Sudarshan Motwani, CEO and co-founder of BookMyForex in conversation with Edex, lists the financial aspects parents should be aware of before sending their child abroad for education.
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The idea of buying currency online doesn't really sound as appealing or normal as shopping for electronics, clothes, groceries or even rail and flight tickets online. How did you recognise it?
For decades, until the arrival of BookMyForex, people were used to looking at “we buy” and “we sell” rates of Forex at bank branches, money changers, hotels and airports across the world, wherein the rates remained constant. It was odd to constantly see these rates with huge margins of 3 to 5 per cent at banks and money changers and 12%-15% at airports. It was indeed sad that most people lose 3 to 5 or even 15 per cent at the airports of their hard-earned money even before they start off on a journey. Even after such colossal expenditure, people would not be convinced whether they got the best deal or not.
BookMyForex was conceived due to the fundamental problem that while all travel related services were available online, the money that bought everything was completely offline. It has revolutionised the way people buy/sell forex or send money overseas. It not only brings cost savings and access to one touch information on regulations, it is also connected to a live data feed that offers real-time rates that are updated every three seconds
What is the best way students can carry money abroad?
Wire transfer: It is one of the most used methods for sending money abroad especially in the case of college fees when students are pre-paying the fee either for an application or for terms. It’s simple to remit funds using BookMyForex now and through simple steps:
Book the order -> transfer funds to assigned bank branch -> Visit bank/ask for pickup for required KYC -> SWIFT confirmation received
Demand draft: It actually protects the traveler from intermediary bank charges, and can get deposited directly in the beneficiary bank's account without any deductions. The FCY demand draft is valid for six months and can be encashed in the beneficiary bank within above validity. The process of getting a demand draft is similar to the remittance.
Prepaid card: It's the cheapest way of carrying forex abroad for those who are able to swipe more and is not very cash-friendly because withdrawal at ATMs cause charges, but BookMyForex offers three free withdrawals. It comes with insurance so that lost or fraudulent transactions made, can be claimed back. For students, security is a major concern and this card is efficiently fulfilling this need. Parents from India can also get this card reloaded for further semester fee payments and can avoid beneficiary/intermediary bank charges.
Travellers' cheque: It’s the aged method of carrying forex which is in many ways replaced by forex cards and remittances. But it is the most secure way of carrying the foreign exchange where a travellers' cheque can be encashed only by its owner.
Foreign currency note: Although there are limitations to carry foreign currency notes of USD 3000, if the requirement is within this limit, one can carry currency notes abroad considering that the cost of 1 USD currency note is at least .6-.8 per cent higher than the same in a forex card.
How does Bookmyforex work?
BookMyForex.com updates rates every three seconds and offers a live platform to money changers and participating banks to transparently compete with each other to offer the best rates to the customers. In return, these money changers and banks get access to large sale volumes from retail customers across India. For customers, this means they get the best possible negotiated rates in their cities for every product, validated in real time. While the customers complete the order booking by selecting their city and forex requirement, the bank or company selected will schedule their orders for door delivery or pick up from their respective location.
How do you deal with competition?
What separates us from everyone else is our customer service. With an enviable network of 650+ Channel partners, we fulfill more order in an hour than what a single money changer does in a month. On competing with other established foreign exchange services, we are better, both in terms of rates offered and customer service.
What are the common issues that students (traveling abroad) or their parents face when it comes to finances?
Intensive research on interest rates on education loans being provided by various banks, financial institutes, and fin-tech startups is vital. Perhaps the one thing where parents end up losing the most is on exchanging currency, which is required to pay for everything. Most people are unaware of the various forex products and services that exist to reduce currency exchange charges and are too used to dealing with their bank for forex requirements.
Traditional foreign exchange providers such as banks and money changers typically add a hefty margin for exchanging currency that can range from 2.5 to 7 per cent over the interbank rates, which is the base rate at which banks deal with each other. Awareness on using the right forex products and the right service providers can alleviate these charges almost entirely.
In what ways can using a forex provider be of advantage to such students?
The new age startups in the segment compare forex rates across hundreds of banks and forex companies in every city and find you the best rate in your area. These platforms make forex vendors compete with each other to acquire more business, essentially reducing the foreign exchange margins for the end customer dramatically and are ideal for a small purchase of currency notes.
Some well-established online forex marketplaces also offer remittances and other forex products directly from their banking partners at a lower rate which is more cost effective than directly dealing with your own bank. They also provide additional options to freeze rates online or to place a rate alert.
Specific forex products such as forex cards, which can be used just like international credit or debit cards also help in reducing exchange margins significantly. If one was to assume the average savings by using the right product or service to be at 5 per cent, the savings over four years could well exceed USD 10,000.
