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Identifying the main rivals of Wise in India's market.

Induces by Wise re-entering the market to accept new clients in India, let's scrutinize some of the competitors facilitating outbound remittances within India.

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In India, who forms the competition for Wise in the domain of outbound services?
In India, who forms the competition for Wise in the domain of outbound services?

Identifying the main rivals of Wise in India's market.

In an effort to support the 32 million-strong Indian diaspora worldwide, the Indian government is promoting UPI, India's instant payment system, as a payment method. This move has paved the way for various online money transfer operators like BookMyForex and others to service Indian users. Recently, Wise and Revolut have entered the market, accepting new customers in India for overseas money transfers after receiving licenses.

To make an informed decision when comparing remittance pricing for transactions to and from India, it's essential to consider multiple key factors: exchange rates, transfer fees, and the type of transfer service used.

Exchange Rates

Exchange rates can significantly impact the amount received by the recipient. Even a small difference in exchange rates can lead to substantial savings or costs over large transactions. Compare rates from banks and online transfer services like Wise, PayPal, and others, as online services often offer near mid-market rates while banks add higher markups.

Transfer Fees

Transfer fees depend on the service type: - Online money transfer services usually have lower fixed fees and better exchange rates. - Bank wire transfers are secure but typically carry higher fees (an average of $15 to $50 per transfer) and may have additional markup on exchange rates. - Money Transfer Operators like Western Union can add fees but provide fast and flexible options, including cash pickups. - Others (e.g., foreign currency drafts or money orders) often have slower processing and potentially higher fees.

Service Type and Transfer Speed

  • Online platforms (Wise, Xoom) offer competitive pricing and faster delivery.
  • Bank wires are slower but better for large sums (no upper limit).
  • Cross-border UPI is restricted by daily limits but offers instant credit within India.
  • Money transfer operators allow emergency cash pickups but at a fee premium.

Regulatory and Tax Considerations (India outbound transfers)

Outbound transfers from India have annual limits (LRS scheme of USD 250,000) and may be subject to Tax Collected at Source (TCS) at varying rates depending on the purpose and amount.

Additional Tips for Comparison

  • Look beyond headline fees: include hidden charges such as foreign exchange markups, conversion fees, and receiving bank fees.
  • Initiate transfers online rather than in branch or phone to save on fixed fees.
  • For regular transfers, small differences in rates and fees compound, so choosing the most cost-effective provider can save thousands annually.

By gathering data on these components from providers’ websites or platforms specializing in currency exchange comparisons, you can calculate the total cost (fees + impact of exchange rate) for a given amount. This approach enables you to choose the cheapest and most suitable method for your remittance needs to or from India.

As the Indian remittance market continues to evolve, it's worth tracking the prices offered by companies like MoneyGram, Remitly, and Ria, which are still receive-only in India. Domestic banks, including those with mobile apps and digital remittance offerings, remain stiff competition in the Indian remittance market.

International travel remains the top remittance purpose, followed by maintenance of close relatives, gifts, and studies abroad. With growing digitalisation and demand for transfers, Wise and Revolut continue to show interest in the Indian remittance market. However, it's important to note that remittances from India can be subject to high taxation, with a 20% tax on remittances over INR 700,000 ($8,340) (excluding education and medical remittances).

In 2023, UPI processed 117.6 billion transactions, and India's outbound remittances under the Liberalised Remittance Scheme (LRS) reached $31.7bn in the 12 months leading up to March 2024. Digital wallets, such as Paytm, Google Pay, and BHIM, are the single most popular payment instrument in India.

[1] Remitly. (2022). How to Send Money to India. Retrieved from https://remitly.com/in/how-to-send-money/india [2] TransferWise. (2022). Send money to India. Retrieved from https://www.transferwise.com/in/send-money/india [3] World Bank. (2022). Remittances Prices Worldwide 2022. Retrieved from https://remittanceprices.worldbank.org/sites/default/files/documents/RPW_2022_Full_Report.pdf [4] PayPal. (2022). Send money to India. Retrieved from https://www.paypal.com/us/smarthelp/article/how-do-i-send-money-to-india-faq-1040 [5] Wise. (2022). Send money to India. Retrieved from https://wise.com/in/send-money/india

  1. When choosing a service to make an overseas money transfer to India, it's crucial to consider the impact of exchange rates, as even small differences can lead to substantial savings or costs. Both online services like Wise and traditional banks may offer different rates; it's beneficial to compare rates and fees offered by providers like PayPal, MoneyGram, Remitly, Ria, and others to make an informed decision.
  2. After receiving licensed entry to India, Wise and Revolut have entered the competitive Indian remittance market, providing online transfer services to individual customers. While the Indian remittance market continues to evolve, it's essential to recognize other key factors, such as transfer fees, service type, tax considerations, and regulatory restrictions, as well as hidden charges like foreign exchange markups and receiving bank fees.

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