Nepal is highly dependent on inward remittances. The remittance industry has come a long away from the relics of a bygone age of remitting money through illegal and unreliable channels like Hundi or Hawala to sending money from the comfort of homes or anywhere with internet access.
In this article, we will cover the different ways of sending money to Nepal both online and offline and different payment methods. To help you in determining the best option, there are few factors to consider before sending money to Nepal like the exchange rates margin, transfer fees, transfer speed, security, amount of money, and mode of payment.
Different Ways of Sending Money to Nepal
Offline Channels or traditional methods
- Bank to Bank Transfers - Bank Transfer through, wire transfer method is recommended for sending a large amount of money with guaranteed rates and without risks. Since the money is processed directly by your bank, you will be assured that your money will reach its destination without fail. However, this is not recommended when the recipient is in a remote location and has very low access to the nearest Nepal bank. The money you send will be credited to your recipient's bank account instantly, or within a few days post the transfer. However, you are likely to pay more compared to sending money online because banks usually charge a higher fee and have higher margins on the exchange rates.
- Cash Pickup - This is one of the fastest ways of sending money wherein your recipient can pick up physical cash from any of the pick-up locations in Nepal, which can be a local branch or an agent within the providers' network. Popular companies like Western Union, Moneygram, Sigue, and Ria have wide networks covering all 50 states in the United States and Mahakali to Mechi in Nepal. In this method, the sender must go to an agent location physically during the operating hours and the beneficiary must bring an identification document to collect the cash. Cash pick-up is recommended when the remitter needs to send money urgently, the recipient doesn't own a bank account, or lives in a remote place in Nepal.
- Money Order - This is an old-fashioned way of sending money offline. Instead of visiting an agent, the remitter can walk into the nearest post office in his/her locality and request for Money Order to Nepal. A guaranteed amount is prepaid at the post-office and the payee can either receive it through a postal employee or can collect it from the nearest hulak in a few days. This is a good and very secure option if you have to pay a guaranteed sum of money to the payee. Charges are minimal and will take a few days for the money to reach the beneficiary in Nepal.
- Demand Draft (DD) and Cheque/Check - Similar to Money Order, sending money by Demand Draft is a traditional method of sending money to Nepal. In this case, you must visit the bank where you have an account and request for a Demand Draft. A Check is a printed form signed by an individual that orders the bank to make the payment to the bearer. DD and Check are some of the options you can consider if your receiver is in a very remote part of Nepal. Once the receiver receives the demand draft, he can either deposit the funds to his bank account or convert it into cash. Charges are minimal, but this process of sending money to Nepal is cumbersome and slow.
- Website - If you have access to the internet, transferring money online is one of the cheapest, safest, and the most convenient way of sending money to your loved ones. When remitting online, the speed and fees of each transfer vary based on the payment method you have used. For first time users, the company will usually conduct a KYC (Know your Customer) verification to confirm your identity since you are sending money online. When you are using ACH transfers, the company will also conduct a verification of your bank account before you can initiate a transfer. Companies like Xoom, Thamelremit, and Wise, formerly known as Transferwise are some of the leading players in the market offering multiple platforms for sending money easily to Nepal. Here is your guide to finding the best way to send money to Nepal online.
- Mobile App - The most convenient way of sending money to Nepal "on the go" and anytime is through a mobile app. Now, you can send money from anywhere through a mobile phone with access to the internet. Majority of remittance companies like Xoom, InstaRem, Moneygram, Western Union, and Remitly have developed Android and IOS apps wherein customers can easily send money using their mobile phones once they have downloaded these remittance apps. Through the mobile app facility, you can track your transfers to Nepal 24/7. KYC verification will be conducted for new customers and when you add a new bank account for ACH transfer, the same is subject to bank account verification before you can make your first transfer.
Different Payment Methods
- Cash - Most traditional methods of sending money accepts payments in cash. The benefit of cash payments is the speed of transfer and minimal requirements of KYC. However, due to the nature of cash, it carries a higher risk; risk of fraud, theft, counterfeit note and inconvenience of physical locations and operating hours.
- Online bank account transfer (ACH Transfer) - ACH stands for Automated Clearing House, which is a network that coordinates electronic payments and automated money transfers. ACH is a way to move money between banks without using paper checks, wire transfers, credit card networks, or cash. If you own a US bank account you can use it to send money online. Once your bank account is verified, you can send money anytime to Nepal. Since there is a risk involved with this payment option, remittance companies allow you to send a smaller amount per transfer. The money usually takes about 4 working days to reach your beneficiary in Nepal. ACH transfer is recommended for regular transfers due to minimal or free bank charges
- Debit Card - With this payment option, the transaction usually gets completed within minutes of booking and the money will reach Nepal within hours post completion of verification. Since there is lesser risk involved with this option, remittance companies allow you to send a higher amount per transfer. This method is recommended for regular emergency transfers. At times, there is a service charge for using debit card especially when you are sending a large amount
- Credit card - Similar to debit card method, the transaction usually gets completed within minutes and the money will reach Nepal within minutes or within hours post booking. However, with this option, there is an additional processing charge for using a credit card so your cost of transfer will be higher compared to a debit card or ACH transfer. This payment method is recommended for emergency transfers only due to the high bank charges borne by the remitter
Traditional ways of sending money have proven to be slow, cumbersome, and expensive. Some of the reasons cited for these high transaction costs are lack of competition, heavy regulation to tackle money laundering, and poor infrastructure. However, in the age of digitalization and a surge in online money transfer companies, the odds are in favor of all the hardworking Nepalese committed to providing a better life for their loved ones at home.
At CompareRemit, we are committed to enabling you to choose the best way to send money online by providing an open platform to compare real-time exchange rates offered by world-class money transfer service providers for free. Click here to see what is on offer today.