LRS Solution by Cashfree Payments for Education Consultants

Many Indians prefer to go abroad for higher education, be it for the quality of the education or the choice of the courses.

But without the facilitation of cross-border transactions, this would be a distant dream. Ever since the RBI launched the Liberalised Remittance Scheme in 2004, outward remittances have become way easier.

LRS allows Indian resident individuals to send money abroad up to a limit of USD 2,50,000. The RBI has revised this limit several times according to the prevailing macro and micro economic conditions.

According to data presented by the Union Education Department in Rajya Sabha, over 600,00 students chose to study abroad in 2022. With a rising number of students opting to go for foreign educational institutions, education consultancies are also soaring.

Indian students need help with immigration and admission procedures. Most importantly, they need help in processing their university-related payments. Therefore, it is an excellent opportunity for education consultancy services to tap into the market.

But there’s a catch!

When it comes to cross-border payments, the RBI has authorised certain banks to process LRS transactions. These are the authorised dealers (ADs) and the remitter needs to hold a bank account or create a customer ID with them.

This traditional LRS approach is not so seamless, involving remitters coming to the branch. Then, there is a lot of paperwork and remittance settlements are time-consuming.

Thus, collecting payments from multiple Indian individuals and remitting them to overseas Education Institutes for education purposes or to students’ overseas accounts for family maintenance purposes becomes quite a struggle for education consultants.

So, it is here where Cashfree Payments comes as a saviour!

Let us explain how Cashfree’s outward remittance solution can help your education consultancy business!

Traditional LRS Approach Vs LRS Solution by Cashfree Payments

Education consultants help in processing VISAs and immigration. They also facilitate college/university fee payments for multiple students. Therefore, they seek a payment solution that can process and settle outward remittances efficiently and seamlessly.

But with the traditional LRS approach, the process is a hassle-some.

For LRS current transactions by education consultants, customers can transact only after offline KYC verification, or after a customer ID creation if the remitter doesn’t hold a bank account with the AD bank

The senders need to go to the AD branch for complete physical KYC. They need to sign the remitter KYC along with the A2 Form.

All this does sound strenuous!

Moreover, remitters seek quick settlements of remittances. This is because students have to pay tuition and admission fees as well as accommodation charges. Apart from that, they may have other educational and personal expenses.

AD banks take T+1 or T+2 days to settle the LRS amount considering the process of doing offline verification.

Why Cashfree Payments’s LRS Solution?

Cut to Cashfree Payments’s solution for outward remittances under LRS, we try to resolve all the issues stated above. But how? Here we go –

• We are completely paperless and digital. We also have 24×7 payment collection unlike fixed hours of ADs
• We save you time! We settle remittances in T+0 or T+1 time
• With Cashfree, senders can make remittances using their account with any bank
• Not only do we process electronic modes of bank payments like NEFT or RTGS, but also industry-first UPI and net banking. Moreover, we partner with 38+ banks for third-party verification to do real-time, hassle-free validation for the account used by the remitter to make the payment, in compliance with LRS remittance regulations 
• Above all, we are RBI-compliant! We digitalise the process of Pan Verification, Bank account verification, TCS and GST calculator and collection in compliance with RBI Guidelines for LRS remittance
• Well, cross-border remittances can be tricky after all they need foreign exchange calculation. Fret not! Cashfree uses the Smart FX calculator before remittance. So, remitters know how much they need to remit to meet the education expenses calculated in foreign currencies
• Also, we give the real-time status of remittance processing & settlements
• What about taxes? Stay assured with Cashfree Payments for it gives the real-time calculation of TCS

Note: TCS, which is Tax Collected at Source is applicable on all cross-border remittances under LRS. Outward remittances for education purposes are tax-free up to INR 7 Lakhs. Over this limit, a TCS of 5% is levied. If the student is taking an Education loan, the TCS rate would be 0.5%

Read more about TCS on Outward Remittances.

How can Education Businesses use the Outward Remittance Solution by Cashfree Payments?

Education consultancy businesses, foreign universities and even authorized collection agencies, all can use Cashfree Payments’s outward remittance solution.

They can use the No-Code Solution of Cashfree Payments to plug in to collect payments. They can easily collect remitters’ KYC documents as well as all other details.

Otherwise, they can integrate our API with their website or app.

So, by using outward remittance solutions by Cashfree Payments–

• Education consultants and remittance service platforms in India help students who study abroad. Businesses can help students pay their university admission payments and tuition fee with a fully digitalised process
• The smallest of education consultants can be enabled with digital tools to refer such students who seek to remit Admission/College/University Fees abroad and help them initiate and process their remittance digitally.  
• Foreign universities and authorized collection agencies can collect cross-border payments from Indian students. They can even collect it through local payment modes such as Net Banking and UPI
• Visa agencies, TOEFL, GMAT, GRE exam centres, etc. 

So if you seek to expand your business and add LRS remittance services in no time, it is Cashfree Payments for you!

A Quick Note on Our Solution

We are here to help not just education consultants but multiple business merchants. We have LRS-compliant solutions for-

• Investment and Stock Trading: Indian investors want to invest in foreign publicly listed stocks, mutual funds, exchange-traded funds (ETFs) and other investment instruments. We facilitate the purchase of assets for resident individuals who can pay via local modes of payment. Therefore, investment and stock traders can use our LRS solution for easy payment collection and abroad settlements.
• Hospitality and Travel: Online travel agencies, destination management companies and all such travel and hospitality services can use the LRS-compliant solution by Cashfree. Thus, with seamless payment offerings, merchants can attract more customers to grow their businesses.
• Family Maintenance: A lot of residents want to financially support their friends and family members living abroad. Hence, the solution for outward remittance under LRS by Cashfree Payments can make it uncomplicated.

For more guidance, reach out to our team!