Six important points to know about remittances.

Understanding Sender’s Challenges in Money Transfer Systems

In the world of global money transfers, understanding the needs and challenges faced by those sending money is crucial. Below are six essential points that system designers should consider to ensure their services address these challenges effectively.

1. The Urgency of Sending Remittances

As the month’s end approaches, senders of remittances face a critical realization: there is no tangible benefit in delaying the transfer of funds. The hard-earned money, often the result of a month’s labor, needs to be sent back home promptly. For many, this is a non-negotiable obligation, as families depend on this money for their livelihood. The sender’s mindset is clear – the money must reach its destination without delay, as postponing the transfer offers no advantage.

2. Fear of Misappropriation of Funds

One of the most significant concerns for senders is the fear that their money will not be used as intended. When sending funds, they often have specific allocations in mind, such as a certain amount for utilities, food, or other necessities. However, the reality can be different, with funds often being spent differently than planned, leading to worries about misuse and misappropriation. This concern underlines the need for more transparent and controlled usage of the funds sent.

3. Direct Bill Payment Desire

Many senders express a strong desire to pay bills directly from their country of residence. For instance, a person in the UAE wishing to send money to the Philippines might prefer paying bills directly, bypassing the need for intermediaries. This approach would significantly reduce the chances of funds being misappropriated and ensure that money is spent on its intended purpose.

4. Challenges with Micro Payments

The current systems often fall short in facilitating the transfer of small amounts, a feature crucial for many senders. The need to quickly and affordably send small sums, such as $5, is not met by most traditional transfer methods. This limitation is especially problematic in emergency situations or when small, immediate financial support is needed.

5. Frequent Requests and Psychological Stress

Following the initial transfer, senders often face regular requests for additional funds. The lack of a system to efficiently handle small, frequent transactions exacerbates this issue. This not only adds to the financial burden but also creates psychological stress for the sender, who might feel overwhelmed by the continuous demands for more money.

6. Limited Receiver Benefits from Remittances

Finally, the funds sent home typically do not provide additional financial leverage for recipients. Despite a steady stream of remittances, recipients often cannot use these funds as a basis for obtaining credit, loans, or other financial services. This disconnect between regular remittances and the inability to leverage them for financial products is a significant gap in the current systems.


These six points highlight the multifaceted challenges faced by senders in the money transfer process. For system designers, addressing these issues is not just about facilitating transactions but also about understanding and empathizing with the sender’s needs and concerns. Effective design solutions should aim to streamline the process, ensure the intended use of funds, and expand the financial benefits for both senders and recipients in the global remittance ecosystem.

This page was last updated on December 3, 2023.

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