Since 1996, Colombia has been experiencing increased levels of migration. High unemployment rates, declining economic growth, social tension, and insecurity are among the contributing factors.
Most Colombians live in the United States, Venezuela, Spain, and Chile. Remittance data confirms that Colombia received $1,767 million from the United States, $1,697 million from Venezuela, $841 million from Spain, and $41 million from Chile in the 2017 financial year.
Therefore, as a Colombian living in the diaspora, it helps to know the various ways to send money home, the information required when sending and receiving, the advantages of online money transfer services, and the specific considerations to make when sending money to your loved ones. You’ll find all this and more in the sections below.
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There are multiple ways to easily receive and send money to Colombia but these will largely depend on the provider you decide to use. Below you will find everything you need to know about sending and receiving money.
According to Banco de la República (Colombian Central Bank), Colombia received $ 6.3 billion in remittances in 2018. Slicing and dicing the data reveals several methods used to send in the money. Below are the different avenues used.
International wire transfers rank the highest as the preferred mode of sending money to Colombia. Part of the reason for this popularity is the extensiveness of the Colombian banking sector. As of 2019, the country had 25 banks with a total of 5,700 branches and approximately 16,000 ATMs spread throughout the country.
While bank wire transfers seem a reliable way to send money home, bank transfer fees, the exchange rates offered, and the ATM fees charged, can make this sending option costly. A wire transfer from the US will cost $20-50, from the UK will cost $30, and from Australia will cost about $6.75.
Your ability to bargain for better exchange rates largely depends on the amount you are sending. Smaller amounts have very little if any chance to get favourable rates. Therefore, you end up spending more money than you otherwise would with other options.
Online money transfers are increasingly becoming popular among Colombians sending money home. The transfer speed, the favourable exchange rates, the variety of services they offer, and convenience are just but a few of the factors that make online money transfer services attractive.
Xoom, WorldRemit, Western Union, MoneyGram, Small World FS, TransferWise, and XE Trade are among the popular money transfer services to Colombia. These services simplify the sending process by giving you convenient options such as sending from their websites, using mobile apps, sending in person from brick and mortar stores or even from Facebook messenger.
Almost all online money transfer services require that you sign up for an account before you can send money to Colombia You can fund it using debit cards, credit cards, bank transfers or cash deposits. After that, you can send at your convenience. Western Union allows you to begin the process online and complete it in-store if that is convenient for you.
Below are the two main options you can use when sending money to Colombia through online money transfers service providers.
International checks are still a viable and secure way to send money home. However, there are a few disadvantages such as long processing times and unfavourable exchange rates depending on the bank where you cash it.
When sending money to Colombia, you will be required to provide details to help make the transfer process as smooth as possible. Here is some of the information you need to have.
A quick note, the information may vary marginally depending on the money transfer service provider and the transfer method you use.
In a survey done on households in the Central Western Metropolitan Area to profile the emigrants from Colombia, most of them were found to be 35 years and older with at least 12 years of schooling. On average, 50% of the emigrants managed to secure employment in the host countries. Approximately 70% of emigrants send money to Colombia for several reasons, including:
mortgage repayments is one of the most common reasons for sending money to Colombia. Of the 15% of remittances budgeted for housing, 5.5% goes to mortgage repayments while 9.5% goes to rent. Through an initiative dubbed Mi casa con remesas, the Inter-American Development Bank (IDB) Group and the private sector have joined hands to help households receiving remittances to purchase homes.
Many Colombians abroad are educated and skilled. Therefore, they value education for their siblings back at home. About 8% of the remittances go towards paying private school tuition fees for elementary, secondary, and higher learning institutions.
Colombia operates a subsidised medical scheme called SISBEN. This system is for the poor and homeless. However, families receiving remittances tend to move to Entidades Promotoras de Salud (EPS) or Medicina Prepagada. These are quality but costly healthcare systems. Data shows that households spend 6% on healthcare.
Part of the money received (5%) is used to pay for transport, mainly the public transport system.
The use of the money as specified by those sending may not necessarily be the actual use by the households. Beneficiaries may alter the usage of funds to suit their immediate and most pressing needs.
Sending money to Colombia using online money transfer services is becoming the new norm. The penetration of smartphones and internet services has made life much easier for Colombians abroad to use the web to transact. Below are the advantages of sending money to Colombia via money transfer services.
Nothing compares to the satisfaction you get when you know that your loved ones in Colombia are well-fed, sheltered, and doing well healthwise. This mental picture keeps on pushing you to send more and more each time.
Before you press the send button or sign off that check, there are a few things you need to consider.
Colombia remains a leading destination for remittances in South America. With over 10% of its nationals living abroad, the country is a lucrative money transfer route. Many providers are increasingly joining in with new products and technologies to get a share of this market.
This development is exciting for Colombians living abroad. They have more options than before and can send money home however they want. To get the best deals, Colombians in the diaspora need to know the various ways they can send money home, the requirements for sending and receiving, the opportunities available to them, and the unique remittance landscape in Colombia.
The fastest way to transfer money to Colombia is through any of the major online transfer services’ fast versions. These include Western Union, Xoom, MoneyGram, and Ria Money Transfer. The faster versions of Western Union, MoneyGram, and Xoom are all very fast, but they also cost a lot of money.
Fortunately, the aforementioned company, ShareMoney, also sends money in a matter of minutes. For both its fast speed and versatility, we recommend ShareMoney as the fast option for Colombia.
The cheapest way to transfer money online to COL (Colombia) would be by transferring the money online through ShareMoney. ShareMoney has a very low stated rate of $3 to transfer funds to CLO from the US. This isn’t the lowest flat fee available to you, but with ShareMoney you save a lot of money on hidden conversion costs. When you add up all of the costs, ShareMoney is providing you the best deal financially. Furthermore, it’s a fast service that should have your money in a Colombian account in a matter of minutes.
Other cheap options include Small World FS and Ria Money Transfer. Be aware that these options are more expensive than ShareMoney and will take significantly longer (days) to reach the destination.
The easiest way to transfer money online to Colombia is through Payoneer. While it certainly isn’t the cheapest option, it’s relatively inexpensive. However, it’s Payoneer’s ease of use and convenience that make it shine.
The person on the receiving end of a Payoneer transfer can also get the money directly on their debit card. Once the money is received, they may withdraw it immediately. Payoneer also offers a direct bank transfer option.
The exchange rate for the Colombian Peso (COP) today is 3,424.5000 COP for every American Dollar (USD). The highest exchange rate in the last 90 days was 3,517.0500 COP per USD. The lowest rate during the same three-month period was 3,310.0000 COP per USD. The average exchange rate for Colombian Peso is 3,419.2344 COP per USD.
The exchange rate has demonstrated a volatility of 0.5% over the last 90 days. When coupled with geopolitical and economic challenges in the region, you can reasonably expect minor fluctuations in exchange rates.
When all factors are considered, ShareMoney is the overall best option for sending money online. The versatility offered by ShareMoney is uncanny, at least when it comes to their Colombian business.
If you use ShareMoney, you can expect low rates and fast transfer times for Colombia. The only downsides are a few inconveniences reported by other users, including the fact that some reported being unable to send money while the sender is not in their home country. Otherwise, the rates and wait times are very good.