Ecuador is a net recipient of remittances. In 2017, the Latin American country received $2,848 million in remittances 43% of which came from the United States, 38% from Spain and 7.8% from Ecuadorians in Italy.
Most of these remittances are received in cash, mobile wallet, or bank account. The players in the Ecuadorian remittance market include high network coverage banks, non-bank financial institutions, and money transfer operators (MNOs).
On the Italy-Ecuador remittance corridor, Small World is the least expensive provider charging an average of 1.63% in transactions fees. On the United States-Ecuador remittance corridor, MoneyGram charges 1% to transfer funds. In the Spain-Ecuador remittance corridor, Remitly charges 2.14% to transfer funds to Ecuador.
Most of this money is dispatched in thousands of transactions averaging $175 per transaction. The $51 – $100 remittance category is the highest at 27% followed by the $151 – $200 band at 20%. About 16% of remittances to Ecuador fall within the $300+ category.
In Ecuador, remittances mitigate the effects of poverty for a large number of households. Most of the funds help in keeping children in school and supplementing family income in an economy where remittance recipients earn less than $500 a month.
Unfortunately, some of the remittances, especially from undocumented immigrants, come through informal channels. These channels are risky, charge high fees, and may delay funds, thus inconveniencing the recipients.
In case you want to send money to Ecuador and aren’t quite sure how to go about the process, read along for the different ways of sending money to Ecuador, the information needed, how the recipients will get the money and some factors to think through before sending.
Sending money to Ecuador is simple and easy. Follow these steps to get started.
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There are various ways you can send money to Ecuador. You can transfer funds using inter-bank wire transfers, online money transfer services, or mobile top-ups. The option you choose depends on your personal preferences, the urgency, availability of the transfer method, and payments options.
Here are some of the common ways Ecuadorians living abroad have been using to send money home.
These transfers are facilitated through the banking system. For instance, in the Italy-Ecuador remittance corridor, banks such as Banca Intesa SanPaolo, Unicredit Banca, and Banca Monte Dei Paschi di Siena S.p.A, are the commonly used transfer institutions. They charge between 4-15% in transaction fees and take approximately 1-5 days to complete transfers.
In the United States-Ecuador transfer corridor, the banking institutions Ecuadorians frequently use to send money home are Walmart2World, Wells Fargo, and Delgado Travel. On average, these institutions charge between 2-4% per transfer and can take 1-2 days to complete a transfer.
Ecuadorians sending money from Spain use banks and non-banking institutions like La Caixa, Europhil, and Caja Madrid to wire money home. Thanks to the sending frequency, transfers along this route take a relatively shorter time to get to the recipient.
If you are transferring through a less frequent route or in currencies that are less traded, you may end up paying more for banks and your transfer may take a longer time to get to the recipient. This combined with the fact that only 51% of Ecuadorians 15 years and above have bank accounts, sending through banks can become a challenge especially in rural areas.
The sheer number of money transfer operators offering money transfer services through online platforms is an indicator of the sweeping popularity of these services. The providers take a shorter time to deliver funds, they are safe, convenient, and senders take a shorter time to set up their transfers.
Like banks, online money transfer providers differ based on the remittance corridor. A quick glance over the top three busiest remittance routes reveals the following.
The United States-Ecuador: The money transfer providers frequently used on this route include Remitly, Uniteller, MoneyGram, Western Union, and Xoom.
Spain-Ecuador: This route is dominated by providers such as Ria, WorldRemit, MoneyGram, Western Union, and Remitly. On average, these money transfer operators charge between 2.14 and 4.12%.
Italy-Ecuador: If you are sending from Italy, you enjoy a variety of online money transfer methods. Some of the providers you may want to look at are Remitly, MoneyGram, Western Union, Small World, Azimo, and WorldRemit. On average, you’ll spend between 1.83% and 8.88% per transaction.
In order to send through online money transfer services, you’ll need to sign up for an online account. You can do that through their website. You can take just 5-10 minutes to set up. Thereafter, provide the recipient’s details and pay for your transfer. Providers vary as to the transfer payment options. There are those that allow you to pay via debit cards, credit cards, bank transfers, and ACH. Others restrict payment to bank transfers.
For faster transfer speeds, pay using a debit or credit card. The funds become available to the provider faster for onwards transfer to the recipient. A huge percentage of money transfer providers nowadays have mobile applications you can use to send and track transfers.
These are money transfer operators who allow you to deposit cash at physical stores and send to your family in Ecuador. Providers such as MoneyGram, Western Union, Ria, Valutrans, NEC Money, Delgado Travel, Vigo, Uniteller, Quisqueyana, Giroso, and Walmart2World are some of the frequently used by Ecuadorians abroad.
Typically, you will find these stores in places such as travel agencies, supermarkets, grocery stores, airports, mailbox centres, and many others. Western Union and MoneyGram allow you to begin the process on the online platform and complete it at any agent near you.
You can gift your family and friends talk time by sending directly to their phones. In Ecuador, you can reload phones within minutes. The participating telcoms in Ecuador when sending through Xoom are Movista and Claro.
To send airtime, enter the phone number of the recipient, pick an amount, and pay. In case of delays, you can track your transaction through the app or customer care service.
Depending on the provider, there is specific information you will need to provide to send money to Ecuador. In general, the following is the information required.
Depending on the country you are sending from, you may be asked to disclose the source and purpose of the money.
There are three main ways recipients can get transfers in Ecuador. Depending on the circumstances and service availability, they can choose a bank, agent, or mobile phone as the method of receiving money.
Direct Bank Deposits – If the money is sent through the banking system or a provider such as Western Union, Xoom, or Uniteller, the money gets deposited directly into the recipient’s account.
Cash Pickups – Most money transfer operators have agent locations all over Ecuador where recipients can collect cash in minutes. Xoom has partnered with banks and other money transfer services such as Ria to expand its network coverage in Ecuador. Currently, the provider has 7,952 locations across Ecuador. In May 2018, WorldRemit launched same-day transfers to Ecuador. It’s worth noting that cash pickups are appropriate when receiving small sums of money.
Mobile Deposits – WorldRemit allows Ecuadorians abroad to send money to Efectivo mobile wallets. To receive money through the mobile wallet, you must be fully registered and the line should be active. You receive the transfer instantly and you do not pay any fees. All charges are paid by the person sending. However, if you decide to withdraw the money, you will be charged withdrawal fees by local operators.
The mode of transfer used will determine the requirements for receiving the transfer. If the money is deposited in the bank account or mobile phone, you do not need to do anything. However, for cash pickups, the following will be required:
The transfers to Ecuador vary in amount and frequency. This is because of the various needs and reasons for sending. The most common reasons include:
About 61% of Ecuadorians spend the funds they receive on day-to-day expenditures such as buying food, travelling and paying rent. Households that receive less than $250 spend 74% of that on regular expenditures while those who receive between $500 and $1,500 use 44% on regular expenditures.
Close to 8% of the remittances to Ecuador are put in investments at the family level. The sender is the key decision-maker on what percentage goes to investments. However, there are cases where money earmarked for investments is diverted to regular expenditures because of the pressing needs.
Most Ecuadorians make plans for their future return into their home country. As part of these plans, they send in money for savings. As expected, they are the decision-makers on the percentage that should go towards savings.
Some Ecuadorians in the diaspora have taken advantage of the falling property prices at home to invest in as much as they can. Properties in places like Malacatos and Vilcabamba which were selling for about $20 to $30 per square meter are now down to $10 to $15 per square meter. In high-end areas such as Loja, you can get properties at $800 per square meter.
Thousands of Ecuadorians abroad send money to their families to keep their siblings in school. This is important as it helps to reduce instances of child labour. The average increase in education spending for remittance-receiving households in Latin America is 50%.
Many of the households who receive remittances in the range of $500 to $1,500 spend about 31% of the income on luxuries. A survey done in Ecuador didn’t come up with a clear answer as to the decision-makers behind the luxury purchases.
There are many benefits as seen in the preceding sections for sending money through money transfer providers. Below is a recap of the benefits.
Before you send money to Ecuador, it is important to understand the dynamics involved including the legal provisions open to the recipients. Below are a few, but important factors to consider.
With remittances to Ecuador rising and their significance becoming even stronger to the country and the families back home, sending through proper channels can be beneficial. Ensure you have all the information required and you understand the remittance landscape before sending money home.
Sending money anywhere else in the world is as easy as sending money to Ecuador. If you’re looking to send money to another country, here is the list of the most popular destinations.
Jonathan is the founder and editor of MoneyTransfers.com. Jonathan is highly experienced in the currency transfer market, having previously worked in the FX trading industry, alongside being an avid traveller. Using his knowledge he identified a need for transparency and further education to help people save money on their money transfers, leading to the creation of MoneyTransfers.com