If you work or live overseas, remittance transfers can help you support your family and loved ones back home. But what are remittances?
In this guide, we’ll take you through the basics of remittances. We’ll cover what they are, who they’re typically used by, and how to make them.
When you’ve finished reading, you’ll know the definition of remittance and whether it’s the best option for you when you’re transferring money for a payment or gift.
A remittance is a sum of money transferred between two people. The term comes from the ‘remit’ definition, which means to give back.
People working overseas often make remittances to their families back home. Sometimes, businesses also pay remittances to overseas customers and suppliers.
With remittances, your loved ones may be able to receive money in minutes. Unlike bank transfers, they’ll also be able to pick up the money in cash.
Whether you’re setting up a cash remittance or an online remittance, it’s crucial to choose a provider that can manage the process in a few simple steps. You’ll get quick service and a reliable transfer.
As employment opportunities shift across borders, more and more people work and live overseas. People might choose to move abroad for a new experience or a better opportunity.
In such setups, remittance transfers become essential to support families and economies in developing countries. In fact, remittance payments have outstripped international aid for decades. Remittances to low and middle-income countries in 2019 were worth $548 billion1.
Remittances can help you connect with those friends or family who you might not be able to see in person. Whether for one-off payments or regular support, Western Union is here to help.
There are several ways to send remittances. Some of them are listed below.
Money transfer services
Remittance transfer services like Western Union may be a great option if you’re looking for flexibility and simplicity. With a money transfer service, your receiver may be able to collect their cash in minutes. However, you may have to pay a transfer fee with each transfer.
A bank transfer be a good option if you hold an account with a bank that operates in both your home country and new location. Making regular, small payments can help you avoid bank charges. Make sure to check the bank’s exchange rates regularly to get the most from your money.
Bank transfers may take a while, often from one to five working days but sometimes longer, depending on the location. If you’re using a bank transfer, you’ll normally have to pay a flat fee and a percentage of
the total amount you’re sending. You should also consider the exchange rate between your send and receive currencies.
Cheques and money orders
Cheques and money orders may be a worthwhile option if you’re sending a large, one-off sum and not in a rush. Your receiver will take longer to get the money, but you may avoid paying some of the fees associated with other methods.
When your receiver cashes in, remember:
There are different ways of receiving cash remittances, depending on the payment method.
With a money transfer service, you may visit a Western Union or other agent location to collect your cash within minutes of the transfer. You’ll need an MTCN tracking number with you, which the sender will receive when they make their remittance. If you can’t go to an agent location, you can get the funds directly to your bank account, but it might take longer.
Bank transfers will appear directly in your bank account. There’s no cash pickup option with bank transfers.
If you get a cheque or money order, you’ll need to visit a bank or financial services company to cash it.
When you’re sending money internationally, the two main options you’ll come across are remittance transfers and bank transfers.
A bank transfer is sent between two bank accounts. Internal processes and regulations of each bank may often slow it down, thus taking extra time to process payments. Then there are exchange rates and bank transfer fees to consider. But with the right account, this can be a useful option.
A remittance transfer sends your money directly to an agent location and may be ready for collection in minutes. However, this can carry a transfer fee with each transfer. It might not always be the most cost-effective option, even if it’s likely to be the quickest and most convenient.
If you need to get in touch with Western Union, don’t hesitate to contact our Customer Care