Remittances refer to the money that is sent by migrant workers to their home countries. The word “remittances” comes from the Latin word “remit,” which means “to send back.” This money is often used to support families and communities in countries where economic opportunities are limited.
Remittances are different from money transfers in that they typically involve smaller amounts of money sent on a regular basis, rather than a one-time large transfer. These transactions can be sent through various channels such as banks, money transfer operators, and mobile money platforms. Individuals, as well as organizations, can send remittances.
When it comes to remittances, there are different types of transactions that can qualify as a remittance. Some of these include:
- Personal remittances: money sent by individuals who are living and working in another country to their families and friends in their home countries.
- Business remittances: money sent by businesses operating in another country to their headquarters or suppliers in their home countries.
- Compensation of employees: money sent by foreign workers to their home countries to cover their living expenses.
Organizations that are allowed to offer remittance services include financial institutions, money transfer operators, and other organizations. However, these organizations must comply with regulatory compliance in order to operate legally.
To learn more about remittances, you can research the World Bank, the International Monetary Fund (IMF), and the migration and remittances unit of the United Nations. These organizations provide data and analysis on remittance flows, as well as information on the economic impact of remittances on recipient countries. Additionally, you can also check out the website of organizations that specialized in remittance services to understand more about the process and fees associated with sending remittances.
This page was last updated on January 14, 2023.