What is a remittance? – A guide to sending money overseas
The word “remittance” comes from the term “remit”, which means “to send back“. Though its actual definition pertains to any overseas payment or transaction, the word “remittance” now typically refers to money sent back to family and friends in one’s home country.
As more migrants send money back home, remittance flows now have a significant contribution to many low to middle-income countries. According to the World Bank, the countries with the highest remittance receipts were India, Mexico, China, the Philippines and Egypt.
Why send a remittance
There are different reasons as to why people transfer money overseas. Remittances can either be personal or business-related. It could be to help out a loved one, to settle a debt, to pay for a service or to share their hard-earned savings to their family.
Now, more and more people remit money as it’s much easier and more accessible than ever before. With the help of technology, you can do money transfers online in just a few clicks.
Online money transfers have enabled, not only individuals but also businesses worldwide to connect, resulting in a significant increase in overseas remittances.
The best way to send a remittance
There are different factors you need to consider if you’re sending money overseas. It’s best to weigh out various options so you can get the most value out of your transactions.
To find the best way to send money abroad, consider the following:
- What the exchange rate is
- How much you’re sending
- How you want your recipient to receive the funds
- How you’re going to pay for the transaction
- How much the fees are
- How often you send money
- How quickly the money gets delivered
- How safe and secure the financial service is
After answering these questions, compare the following providers to find what’s most suitable for you.
1. International bank transfer
You might find that the easiest way for you to transfer money overseas is through international wire transfer. There are four ways on how you can do an international bank transfer:
- In-branch: You can visit any local branch of your bank, and a teller can help you with your transaction.
- Telephone Banking: You can also call your bank to send money abroad.
- Online Banking: Go to your bank’s website and log in to your online banking. You’ll find the option to make an international payment.
- Mobile App: First, you’d have to download your bank’s mobile app. Similar to online banking, log in to your account and follow the step-by-step procedure to make an international payment.
- Convenient – As long as you have a bank account, you can transfer money to anyone.
- Secure – Banks remain the most trusted platform when sending money abroad, as the money is protected even if you send it overseas.
- Expensive – According to The World Bank, banks are the most costly remittance channels. Banks usually offer low exchange rates and charge hefty fees, so they may not be the ideal channel to send your remittances, especially if you send money often.
- Long delivery time – International wire transfer may take a few days to credit the funds to your recipient’s account.
2. High street remittance outlet
Another option for sending money overseas is through a high street money transfer outlet. Different providers, including the Post Office, offer this type of service.
- Straightforward – You don’t need to open an account before you can send money. Sometimes, these service providers may not even ask to verify your identity for smaller transactions.
- Delivery options – You can choose whether to send money to a bank account or a cash pickup outlet.
- Expensive – High street remittance services usually offer low exchange rates, and the fees vary depending on the service you choose. This may not be the best option if you’re sending smaller amounts.
- Not as secure – Since their customer verification process is lax, fraudsters typically use this service. After sending the money, it is usually very difficult to trace afterwards.
- Availability – The outlets have limited opening hours, which may also be affected by bank holidays, etc.
3. Foreign exchange broker
As they deal with currencies 24/7, foreign exchange brokers also offer money transfer services.
- Excellent exchange rates – As they’re highly specialised with currencies, forex brokers usually offer far better exchange rates than banks.
- 24/7 assistance – Great brokers provide 24/7 customer support, whilst some even assign you with a personal account manager.
- Long delivery time – The transfer may take hours up to a few days to be completed.
- Setting up an account – Opening an account with a forex broker is not straightforward and may take a few days. If you need to send money urgently and you don’t have an account with them yet, you might have to look for other alternatives.
4. Online money transfer provider
As more migrants and overseas workers send remittances each year, the money transfer sector is becoming even more competitive. Online money transfer providers like Kabayan Remit are on the rise as they offer even more attractive benefits to customers.
- Convenient – You can send funds online anytime as their services are available 24/7. You can access their services from home by simply visiting their website or downloading their mobile app.
- Instant delivery – Online remittance providers can usually deliver your money within minutes.
- Range of services – Every provider offers a variety of delivery and payment options.
- Account Registration – You need to set up an account with every provider you use.
- Customer Support – Not all online services have an accessible customer support team. Great money transfer providers, on the other hand, offer 24/7 assistance.
Why send remittance with Kabayan Remit
If you need to send remittances to the Philippines from the UK, Ireland, Germany, the Netherlands and Gibraltar, use Kabayan Remit. Here’s why:
- We are a registered Money Service Business (MSB) regulated by the Financial Conduct Authority (FCA).
- You can set up an account in minutes.
- Our services are available 24/7 to ensure your money is delivered to your loved ones within an hour.
- You can send your remittance online through our website or mobile app (iOS or Android), or over the phone with an agent.
- We offer excellent exchange rates and competitive fees so you can get the most value out of your transfers.
- We offer 24/7 bilingual (English and Filipino) customer support, so we are always available to attend to your queries.
- We continually check and improve our systems to ensure maximum safety with all your transfers.
For more information on Kabayan Remit, visit kabayanremit.com.