With an increasing number of people choosing to study, work, and live abroad, more and more money is being sent to family and friends back home than ever before. Today, the word ‘remittance’ means the payments sent home by someone who have left to work in another country. This page will guide you through everything you need to know about sending money, remittance payments and the best way to transfer money internationally.
The term ‘remittance’ comes from the word ‘remit or ‘to send back,’ and so ‘remittance payments’ refers to the amount of money transferred from one person to another – usually in that person’s home country. The term is primarily used in the context of international payments – however, more loosely, it is also sometimes used to refer to business payments made across international borders.
To make the picture clearer, here are some examples of remittance payments: If you work in the United States and send 20% of your monthly earnings back home in India, it is a remittance payment. Also, if you are sent $1000 each money to the US from India as rent for your property in India, it may also be considered a remittance payment. If your parents send you a few hundred dollars as a birthday gift, that may be considered a remittance payment too. Essentially any international transfer can be considered a remittance payment, but the most common use of the term is for people supporting families overseas via money transfers. This is most common in middle income countries where the labour force is largely made up of immigrants, but is also commonly used by students and other professions.
On a basic level, the answer to how does remittance work is by sending money from one place to another, and ensuring the money arrives with its intended recipient. There are several ways in which you can send remittance payments, so the actual way they work depends on the method you are using, and some payment methods are speedier, more convenient, and efficient than others. Some commonly used methods for sending remittance payments include:
Cash transfers is the traditional means of sending remittance payments, but it’s not as simple as the name makes it sound. While some people do simply send cash in the post or with someone traveling to another county, these are not safe or secure ways of transferring money. More often a cash remittance payment will be facilitated by a company with branches in both countries (e.g. Western Union), whereby someone can fund a transfer in one country and their recipient can pick it up in the form of cash from the branch near where they live.
Bank transfers are quick, easy and safe, and widely used for sending remittance payments around the world. You can make an online international money transfer via your bank by going to a local branch or simply logging into your internet banking account, and entering the details of the transfer you wish to make. There are a few drawbacks to using bank transfers, however. One of the most notable is that your recipient will need to have a bank account in order to receive the funds, and not everyone has access to this. The other is that banks tend to charge high fees and exchange rate margins, which can eat into the amount you want to send as a remittance payment.
The most popular and efficient way to send remittance payments is via specialized remittance providers, which largely take the form of online money transfer services with physical branches. The sender just needs to visit the nearest agent location of the remittance provider or login to the online account, pay for the transfer (through the card, bank transfer, or cash), and send money.
The advantages of online payments through international money transfer providers over a bank transfer is that they tend to charge significantly lower fees and margins (which is helpful as the money sent as remittance payments is often vitally important to the recipient), and they allow for a variety of payout methods. You can still transfer into a bank account if your recipient has one, but if not these services can deposit money into online wallets, send to a mobile, or deliver the money as cash either to a branch or sometimes right to your recipient’s doorstep. This allows you to transfer money across different financial services easily, without worrying about security or speed.
Sending remittances is now easier than ever before. There are many remittance companies to choose from and you can do everything online. The basic steps for sending a remittance payment remain the same. We believe the best option for sending remittance payments is to use a specialized provider, so here is a quick guide to show you how to sign up and use one of these services:
In order to receive a remittance payment, the most important thing to do is to provide accurate details to the person sending the money. This can mean providing the correct bank details, or your ID information so they can arrange to have the money sent to you. If you’re receiving a remittance into your bank account, all you’ll have to do is wait for the money to arrive, but if you need to collect the money then here are the steps to follow:
This question will vary from provider to provider, and also depends on the currencies, countries, and the amount of money involved in your transfer. For this reason, it’s not possible to give a one-size-fits-all answer to this question. Instead, the most useful thing is to be aware of the different charges that are applied to remittance payments so you can make sure you’re not getting ripped off. Here’s a quick summary:
To learn more about money transfer costs, check our guide to the cheapest ways to send money abroad.
In most cases, remittances are delivered almost instantly or in a matter of minutes. Again, the actual speed of the transaction will depend on a number of factors including the payment provider you choose, the currencies involved, and the delivery method. If you have chosen to send a payment using a specialized remittance provider, the recipient will be able to collect cash in a matter of minutes by providing the transaction number and proof of identification. However, transfers to bank accounts can take between 1 and 5 working days to complete.
Yes, you can send remittances to someone who does not have a bank account. In order to do so, you will have to use a provider that allows for remittance payments to be delivered in different ways. The most common method is to arrange a cash pickup, but some providers will also allow you to have the money delivered to mobile or e-wallets, or even sent right to your chosen recipient’s doorstep.
The term remittance means ‘to send back,’ so ‘remittance payments’ can be used to describe almost any international money transfer – for either personal or business reasons. It is most commonly used, however, to refer to payments made to support family and friends back home from people who have migrated to another country to find better employment opportunities.
There are many different ways people can send and receive remittance payments, and services exist to ensure money can be sent across the world easily to anyone at all – even if that person has no access to a bank account. A variety of companies specialize in arranging cash pickups, which have the advantage of being available for collection almost immediately as soon as the sender has funded the transfer in their current country of residence.
Remittance payments are centrally important to the current global economy, as they help support millions of people in developing countries across the world. If you’re looking to find the perfect remittance provider to send money home without having too much of it eaten up by transfer fees and exchange rate margins, then we’re here to help. Simply use our free money transfer comparison tool and we’ll show you all the best options for your chosen transfer route in seconds.
Artiom is a marketing graduate from the University of Portsmouth, Artiom’s primary experience is in PR and Outreach but he has a broad knowledge of search engine optimisation and all facets of digital marketing. He optimises the organic experience on MoneyTransfers.com with the content team manages and creates unique marketing tactics, and generally supports the overall growth of the website.