Forex Services for Overseas Travelers
The currency is the spine of international travels and trades. Forex services for overseas travelers have become vital as it will be very much difficult for travelers to buy, sell or even survive in the foreign land. We live in a globalized world, where everything is traded with the motive of gaining financial profits.
Every country has decided on its currency to make the internal and international businesses smoother. Now, every economy is different. The value of the currency is determined by the market forces. So when it comes to international trading, some currencies’ value is higher than another one.
Now, in these situations when the traveler wishes to travel internationally, he/she needs to have the money in the currency of the destination country. This is when the traveler approaches the Forex services to exchange the currency and gain the value of it to spend it in the destination country. These services have evolved their forms with the advancement of technology.
The various services that the foreign exchange companies provide for international travelers are as follows:
- Currency Exchange/Cash Exchange
- Overseas Remittance
- Forex Travel Card
- German Blocked Account
- Foreign Currency Demand Draft
- Travel Insurance
Each type benefits the overseas traveler in enormous ways. Let’s look into it one by one in detail:
Foreign currency exchange simply means converting the money from one currency to another. Foreign exchange of cash involves a physical exchange of money from one party to another.
For instance, a German traveler has arrived in New York to visit the time square. He needs some money to spend at the location. He approaches the Forex kiosk to convert the Euros into dollars. He hands over the Euros at the desk and takes dollars. While doing so he has to pay the commission fees with some percentage of the total amount of the transactions.
This is a general procedure of acquiring foreign currency. However, travelers prefer carrying converted cash in advance. This means they reach out to the nearby foreign currency exchange services in their own country before they travel abroad.
Why Do You Need Foreign Exchange?
It is necessary to exchange the currency when the traveler has to spend the money abroad. The exchange rate of the currency determines how much foreign currency the traveler will get. Even though the travel has booked the travel packages, he/she will need an amount in hand to spend it in the landing country.
Especially cash, in case the card doesn't work, the travelers prefer carrying some amount of cash handy in case of emergency. Even though the rate of Forex currency exchange is fixed, the amount that the traveler gets may vary a little. It depends on the location and the percentage of the commission that the company takes.
What Are the Benefits of a Foreign Exchange?
Though there are some risks, carrying cash in the travel country can benefit the traveler in various ways-
- Relief From the Card Fees- You do not need to pay extra every time you transact in cash. When you have cash, you end up paying the exact amount without any surcharges of the transaction. This way you will have more cash in hand to spend and explore the destination.
- Easy Access- The cash is always helpful in case of emergencies. For example, you are having food in the hotel of your travel country. You wish to make the transaction with your forex card, but unfortunately, there is a network issue. In such cases, cash can help.
- Some Places Do Not Accept Cards- Places like local markets, where most of the shopkeepers may prefer taking the cash instead of the e-transactions. Even when most businesses prefer cards and e-transactions, there are some places where cards are not accepted. Keeping at least some amount of cash is always helpful instead of keeping all the money in the forex cards.
Now, what are these Forex cards?
A Forex card carries the foreign currency of your travel country that will help you manage your expenses during your stay. It is a card just like our credit or debit card. The difference is the card carries the foreign currency. A traveler can load the card with foreign currency.
Further, the card can help travelers withdraw cash from the ATMs abroad. The travelers can pay for their expenses in the local currency of their travel country. The Forex travel card is very handy to use.
There is no fear of losing cash when the travelers hold this. Expenses such as entry tickets for sightseeing, rail, bus, taxi travels, food bills, etc. can be managed through the foreign currency card.
What Are the Different Types of Forex Cards?
The Forex cards come in two variants. Multi-currency Forex card, and a single currency card. Also, some travelers prefer prepaid cards and some prefer credit Forex cards. A prepaid card means a traveler loads a particular amount estimating his/her expenses in the foreign land.
A credit card means that he/she can spend the amount from the card and repay it later with some amount of interest on it.
There are two types of Forex cards.
- A Multi-Currency Forex Card- In this type the traveler can preload the card with multiple currencies. For example- a traveler has a plan to visit more than one country in his trip. He/she does not need to carry that number of cards. He can use one single card in multiple countries. This card enables the traveler to convert the currency from one to another through net banking. It is a convenient mode if the traveler is planning to visit multiple countries.
- Single Currency Forex Card- A single currency card comes with limitations. A traveler can load only one currency in this. He/she will end up paying extra charges if it is used in another country. A traveler can reload the card again when he needs to transact in the third currency.
Why Do You Need a Forex Card?
Forex cards carry e-money in the local currency of your travel country. It allows travelers to transfer money electronically when traveling abroad. By using Forex cards a traveler can withdraw cash in foreign currency, keep a track of the balance and manage the expenses such as shopping, food, sightseeing or hotel stays.
Banks and foreign exchange companies issue these cards. If the traveler needs more money than what he/she has, the top-up of the card is also a new option. It is safer to have the maximum amount of currency in e-form than cash. Because it is an easy and secure option.
What Are the Benefits of a Forex Card?
Foreign currency cards benefit travelers in enormous ways. It is the most affordable way of managing expenses internationally. It is a safer mode than cash. It takes fewer transaction charges as compared to other cards. A traveler can use the same card for multiple trips, so it is economical too. In some countries, the traveler using the Forex cards enjoys special privileges and discounts.
Following are some major benefits of using Forex cards.
- Forex cards are more affordable than any other form such as cash, traveler’s cheque, credit, or debit cards. The exchange rate is locked at the time of issuance of the card. There are no more currency fluctuations that the traveler has to face while using this card
- Foreign currency cards are universally accepted. The multi-currency card lets the user store multiple currencies which makes it convenient for the traveler who is visiting multiple countries.
- The user of the card can keep a track of expenses and the balance of the money as they have online access to the account. Moreover, the balance amount is not wasted, as you can convert it into your native currency once your international trip is over.
- The cards also come with several discounts. Some PoS in various countries offer certain discounts if the traveler pays through the forex cards. In the same cases, if he/she pays through debit or credit cards, the payer may end up spending extra transaction charges of between 5 %-11% of the total transaction cost. So, other than being a safe and secure option, forex currency cards also help in saving money in various ways.
Simply a remittance means the method of paying the amount of money from one party to another. This term is broadly used for international transactions. For example, a traveler is in a foreign country. He/she needs some extra amount. The travelers relative from another country can use the remittance as a method of payment. The term, remittance is derived from the word remit which means send back.
Why Do You Need Overseas Remittance?
Overseas remittance is needed for the following reasons.
- Tours or private visits.
- Immigration or job purpose.
- Manage the expenses of the relative abroad.
- For international medical treatment.
- Study abroad
- Corporate traveling, seminars, or training abroad.
- Gifts or reimbursements.
Types of Remittance
There are several ways to pay the remittance which includes methods such as-
- Wire/Bank Transfer- A bank or a wire transfer is an electric method of transferring money from one bank to another. It involves a domestic and international bank-to-bank money transfer.
- Actual Cash Pick up- cash pick-up is when money is transferred from one bank to another and the receiver of the payment wants that amount to be collected in the form of cash. The receiver does not receive an electric payment, but he will have to go to the bank and collect the physical cash.
- Mobile Money Transfer- We all are familiar with mobile wallet services which are highly in form due to pandemic situations. It is a digital remittance service at your fingertips. It has made domestic and international remittance faster and less stressful. The user can use the mobile phone to transfer money abroad or in the country.
- Home delivery- It is a traditional method of remittance and many people still prefer this. Through this service physical cash is directly delivered to the home address of the recipient.
Documents required for remittance abroad.
The following documents are necessary for international money transfer-
- A KYC details including PAN card, Government issued ID proof
- Beneficiary’s Bank Account details
- Supporting document for reason for remittance. (University letter, travel proofs, etc.)
These are the three basic documents needed for the remittance. However, there are some additional documents needed, depending on the purpose of the international travel.
For instance, if the traveler is going abroad for medical treatment. He/she will additionally have to submit more documents such as a declaration from the applicant. This declaration explains the requirement of remittance.
What Are the Benefits of an Overseas Remittance?
As remittance can be acquired through various means, it benefits the user in different ways.
- Better Exchange Rate- When you approach a special currency exchange provider, it can offer you great exchange rates. In this way, you will not end up paying more money other than the transfer amount.
- Larger Withdrawal Cap- Sometimes your banks may have a cap on the withdrawal limit. This applies to the limit of money transfer on each day. The remittance service providers have higher limits. It is useful if you are trying to make overseas transfers for larger amounts.
- Flexible features- Remittance can be done in various forms as per your comfort. There are spot deals, regular payments, e-methods, cash deposits, on-door deliveries, and many more. This way, the beneficiary can choose the suitable method considering the situation. For example, in the case of medical purposes, if the money is required instantly, the mobile money transfer can be the fastest option.
Foreign Currency Demand Draft
A Foreign Currency Demand Draft (FCDD) is mostly necessary for paying the course fees internationally. The FCDD deposits money directly into the beneficiary's international bank account. It also saves on bank transaction charges. The validity of FCDD is six months.
However, understand that it is not an immediate method of transaction. It takes approximately 2 weeks of processing and money to get reflected in the account. This method is not useful when money is required on an urgent basis.
Why Do You Need Foreign Currency Demand Draft?
Most of the international universities demand fees to be paid through Demand Drafts. It is the cheapest and the most transparent method of money transfer. It is easier for the universities to keep a track of the transactions. The frequent traveler will not opt for an FCDD. However, if there is a relative who is staying abroad and needs money. The FCDD is a safer option.
What Are the Benefits of a Foreign Currency Demand Draft?
There are various benefits of choosing an option for FCDD
- This is a cheaper option as the payer only has to pay a minimum fee and service tax.
- There are fewer chances of it being misused. There are proper details mentioned on the DD such as:-
- Name of the beneficiary
- Name of the transferer
- The receiver’s location
- According to the Foreign Exchange Management act, there is no withdrawal amount limit for the FCDD.
- There is no currency restriction. The FCDD can be issued in any currency.
German Blocked Account
As the name suggests, a German blocked account is the type of finance account specifically used in German. The country has been pulling a lot of students from all over the world by providing world-class education.
Considering this, every German university is requesting that a monthly sum amount of money should be provided to the students so that they can manage their expenses. This money is deposited in an account named as German Blocked Account.
Having this account is a compulsion while students wish to apply for a study visa in Germany. This account is called a blocked or closed account because there are very strict instructions and limitations on the monthly withdrawal of the money.
Why Do You Need a German Blocked Account?
A German Blocked account is a mandatory aspect for all the non-EU and non-EEA international students who aspire to study in Germany.
It is official financial proof a student has to present to the embassy while applying for the visa.
The students or the depositor cannot withdraw the amount directly. The depositor can open another current account and the monthly amount from the blocked account will be deposited for use. You cannot withdraw the full amount at a time. Many visitors keep this amount from the blocked account as a safe deposit for backup and use the money by opening another current account in a different bank.
What Are the Benefits of a German Blocked Account?
- Fulfills Visa Requirements- It is a mandatory requirement for international students who are applying to study in Germany. The applicant has to deposit a certain amount in the blocked account to prove how the student is going to manage the expenses during their stay in Germany.
- Guarantees Your Expense- The account assures that the international student has sufficient financial support. This is unlike any other account. The withdrawer cannot withdraw all the amount at a time. The student is allowed to take out the limited amount. This way it helps students to curb their expenses too.
- Emergency Support- Some applicants use this account as emergency support. They keep the money blocked and open another account for their monthly expenses. The German blocked account also works as a support system for the students. This way students do not spend the entire amount in one go. They are always with some amount in the account for emergency purposes.
It is insurance just like any other insurance that we take. Traveling is an enthralling experience. It is even more peaceful when you know you have travel insurance in case of any mishaps. The travel insurance covers the expenses of policyholders if there is misfortune while traveling abroad and domestically. Some of the most common expenses that the travel insurance covers are,
- Medical Expenses
- Trip Cancellation
- Lost luggage
- Accidental Covers
- Any other emergency occurred while traveling.
The travelers can customize the policy according to their will. The list of covers varies based on the customized policy. It is necessary to choose the best travel insurance provider as you cannot compromise when it comes to risk-taking.
Why Do You Need Travel Insurance?
Travel insurance is a vital decision that the traveler has to take while planning a trip. Travel insurance works as a support for all travelers. The emergency does not ring a bell before it appears. The need for travel insurance is high because many possible problems can occur during the period of travel. To be assured throughout the trip and to try to avoid the extra expenses travel insurance is necessary. A sudden expense can affect the traveling experience too. Travelers can customize the insurance and opt for it as per their needs.
What Are the Benefits of Travel Insurance?
- Covers Travel Risks- Travel insurance comes with several covers to offer. Such as medical emergencies, loss of luggage, accidents, and many more. Any mishap that can happen is covered through the travel insurance company. In case of any misfortunate event, a traveler can reach out to the insurance office and get the benefits. Some companies also cover the visa rejection fees. So, it is necessary to have the travel insurance by the side to be secured while traveling.
- Overseas Medical Treatments can be heavy On the Pocket- For instance, you are visiting a snowy region and you are planning to do hiking. You or any of your family members end up having a small accident that needs medical treatment immediately. Make sure you have insurance covering medical expenses. If you do not have insurance, it can be a really big toll on your travel budget if you end up facing any mishaps during your hiking experience. Medical treatments overseas can be a burden in such cases.
- Some Countries Mandate Travel Insurance- Countries such as the USA, Cuba, and Schengen countries mandate that travelers must have travel insurance. As it is, the medical treatment cost in these countries is high. These countries thoroughly check the travel insurance policies while issuing the visa. It brings a positive impact on the visa issuance for travelers.
How to Select an Authorized Service Provider for All Forex Services?
With so many options available, it is very difficult to choose the best-authorized service provider for Forex. How can we find one on whom the traveler can rely with their money? The Reserve Bank of India has authorized only AD I and ADII categories to transact the international remittance.
The AD I agents include all the authorized banks. And ADII means all those agencies that have derived license from RBI for money changing. It is always advisable to choose the best foreign exchange companies who can let you have any type of foreign exchange, such as Remitx.
BTW Visa Services in association with Remitx provides the following Forex services for the smoother functioning of all types of travelers such as Leisure and Business Travelers, Students, and others traveling overseas.
- Foreign Exchange(Cash)
- Forex Cards
- German Blocked Account Transfer
- Travel Insurance
- Foreign Currency Demand Drafts
Remitx stands out from the pack of other service providers as it is a division of Capital India Finance Limited. Remitx also holds an authorized category II license from the Reserve Bank of India.