Understanding the Economy of Sri Lanka
Sri Lanka can be described as a free-market economy. They have a GDP of $80.7 billion, ranked 113th in the world. In recent years its growth has slowed down. The pandemic is partly responsible for this slowdown.
The national currency is the Sri Lankan rupee, and at the time of writing, 1 RS is equal to 0.013 USD. Furthermore, their most significant sectors include agriculture, textiles, tourism, telecommunications, and petroleum refining. The top export partners include the USA, UK, and India.
Sri Lanka has a robust financial sector, which means that money transfer companies are offered to locals. Therefore, you can enjoy sending and receiving money at low rates and fast transfer times. Read this guide to the end to discover industry-leading companies.
Common Reasons for Sending Money to Sri Lanka
Looking at the transfer narrations given to the various money transfer providers, the following reasons stand out as the most common for people remitting money to Sri Lanka.
Instances of floods, earthquakes, and other disasters receive an overwhelming response in terms of financial assistance from the diaspora. Even at a family level, emergencies do arise, such as sicknesses and deaths, which require diaspora Sri Lankans to send in their support.
To support family income, Sri Lankans abroad send money regularly, mostly on month ends. This takes care of the day-to-day living expenses.
Some Sri Lankans send money home for tuition fees for their siblings or direct family members.
Investing back home remains one of the most significant pull factors for Sri Lankans in the diaspora. Most of the investments are in real estate, the stock market, and entrepreneurial ventures.
During festivals such as Vesak Poya, Poson Poya Festival, and Sinhala and Tamil New Year, the size and frequency of remittances to Sri Lanka usually increase.
Why Send Money With a Money Transfer Service?
Money transfer services have proved to be convenient, fast, and simple for people sending to Sri Lanka and other countries. Below are some of the reasons why you should try out a money transfer service provider for your next transfer.
Money transfer providers use different business models with respect to exchange rates. Some providers such as WorlfRemit add a margin on the exchange rate while others OFX transfer at the mid-market rate. All in all, money transfer operators give you more Sri Lankan rupees for a unit of your sending currency.
Irrespective of the country you are sending to, most providers will transfer your funds in your local currency. TransferWise supports the Sri Lankan rupee, so is Xoom and Western Union 130+ currencies. This support may not readily available when sending through the banking system. You may have to send in dollars or pounds and convert when the funds get to Sri Lanka.
Speed of Transfer
Delivery times are important especially when sending money in response to emergencies or pressing needs. If you pay for your transfer using a debit or credit card and opt for cash pickup as a payout option, your transfer can be completed instantly. Bank transfers may take 2 to 3 days to get to the recipient.
Ease of Set up
Signing up for an account, paying for your transfer, and sending funds on money transfer service provider’s platforms is very quick and simple. WorldRemit takes about 10 minutes to set up and verify your details in readiness for transfers to Sri Lanka.
Money service providers in Sri Lanka allow for cash pick up from stores, supermarkets and petrol stations in different parts of the country. A good example is Xoom which has 2382 locations in Sri Lanka. Banks have also partnered with these providers to use their branches as transaction points. This has extended the geographical reach.
With top of the class technologies such as 3D Secure and other digital authentications, parties are assured of safety and peace of mind when sending money online. Cybercrime is a real risk, but emerging technologies are also hard to beat.
Things to Consider When Sending Money to Sri Lanka
There are several factors that you need to bear in mind when sending money to your family and friends in Sri Lanka.
Currency Regime: Sri Lanka has a floating currency regime where market forces determine the value of the Sri Lankan rupee. However, depending on the turn of macroeconomic events, the government may intervene to stabilize the currency. Such interventions may affect the value of the amounts you transfer.
Taxation: Generally, remittance up to $10,000 from Sri Lankan expatriates is not considered taxable income. However, any proceeds from investments of these remittances in Sri Lanka are taxed at the individual or corporate rate, depending on the incorporation status of the business.
Non-Resident Foreign Currency (NRFC) Accounts: This account facility is targeted at Sri Lankans in the diaspora to help them manage currency instabilities, low-interest rates, and runaway inflation. The good thing with NRFCs is that they allow you to maintain your account in multiple currencies, and you can get loans against these deposits.
Therefore, if you want to send money to Sri Lanka, you need to understand the remittance market, the players involved, what’s needed for you to send and receive money, and the factors to bear in mind when sending.
Top 3 Companies for Sending Money to Sri Lanka
Choosing the best money transfer service can be daunting with a large number of choices out there. This section offers advice on the top 3 companies you should register with to send money to Sri Lanka.
TorFX offers competitive exchange rates across 60 currencies. They provide a decent service that previous users highly rate.
TorFX doesn’t charge any fixed fees. Also, the transactions are fast for cross-border payments, which is perfect for when the recipient has a financial emergency.
Wise is one of the best money transfer companies available for transferring funds to Sri Lanka. They charge low fees and match the mid-market rate for many currency pairs. Therefore, you are saving money compared to most banks and specialist transfer providers. Wise does a great job of being transparent at every step of the money transfer process.
The mobile app provided by Wise is secure and has a clean user interface. Therefore, you can begin sending money to Sri Lanka shortly after downloading the app. Wise is regulated by the Financial Conduct Authority, which means that you can trust the company with your money.
Sending money to Sri Lanka with WorldRemit is a fast and cost-effective process that is available within minutes of registering for a new account. The company provides a range of payment and cash-out options, which offers an excellent amount of flexibility. Also, the fees are low, so you are getting a good deal when sending money abroad.
WorldRemit offers excellent customer service that responds within seconds via live chat. Also, multiple languages are offered, which is great for customers where English is not their native language.
Looking to Send Money Somewhere Else?
Sending money anywhere else in the world is as easy as sending money to the Sri Lanka. If you're looking to send money to another country, here is the list of the most popular destinations.