International money transfer industry keeps rising on every single day.
The expats living in foreign countries need to send money online to their families and friends at the home country through international money transfers, which are also known as a remittance.
See, there two words with the same meaning. Likewise, there are many common terminologies used in this money transfer business.
It is important that you know some of them:
1- ACH- Automated Clearing House:
As the name implies, it is an automated money transfer set up using electronic devices. It facilitates electronic payments through credit cards and debits cards, eliminating paper checks, wire transfers or direct cash.
2- Currency Code:
Different countries have different currencies, so in order to conduct international money transactions, it is necessary to know the currency code of the country. A currency code is just the three-letter abbreviation of a country’s currency like AUD for Australian dollars, INR for Indian Rupee, GBP for Great Britain Pound etc.
3- Buy Rate/Exchange Rate/Bid Rate:
All these terms are used to denote the rate of exchange at which one currency is bought and sold by another. In the case of international money transfer, we exchange one currency for another. For a customer higher exchange rates are favourable as he/she will receive more money for the currency they are selling.
4- IBAN- International Bank Account Number:
IBAN is an internationally recognized numbering system that identifies overseas bank accounts located across the world. It is an essential component of overseas money transfers.
5- Audit Trail/Audit Log:
It is a well-organized chronological record of all financial transactions conducted through personal accounts or business accounts. It is documentary evidence that cannot be tampered at any cost.
6- BIC- Bank Identifier Code/SWIFT Code:
Each and every branch in the SWIFT network has a unique identifier code that is used to distinguish the bank from others in international money transfers. They are often 8 to 11 characters long with a mixture of numbers and letters.
It is an Australian bill payment system that allows individuals to send money to other people and organisations/businesses registered under BPAY.
8- Currency Pair:
In international money transfers, the exchange rates of two countries are often shown as currency pairs like AUD/INR, where the first currency (AUD) is known as the base currency and the one referred to (INR) is called as the quote currency. They are always shown in relation to each other because you are selling one currency and buying the other.
9- Transaction Fee:
In addition to the variations on exchange rates, the provider would demand a small amount to facilitate the money transfer. This transaction fee will change according to each money transfer agency, thus choose the one with the lowest transaction fee.
Keeping these terms in mind, one can decipher the meaning of certain common terminology used to send money online to India or any other country.
Banking terms are hard for common people to follow, thus it is always better to read through some glossaries for detailed knowledge.