Let’s start with the very basic: What Are Remittances?
Hello. My name is Faisal Khan. I am a banking and a payment consultant.
Let’s start with the very basic question in this YouTube series What are remittances. In the money transfer world, we talk about remittances; what are they? Remittance is a term that was actually invented by the World Bank and remittance basically means someone who is an expat worker someone who is living in one country moves to another country works there and sends money back home for purposes of Family Maintenance. So let’s say you are a worker in India or Bangladesh or Pakistan or Nigeria or Philippines and you migrated to the Middle East to work on construction projects or in the entertainment industry or in the hospitality industry. And you know you are getting paid a salary every month. You, and that salary when you have collected that salary and you at the end of the month go to a money exchange company or a money transfer company and send the money back home, what you’re doing is called a remittance. So a remittance is money that is sent back home for purposes of family maintenance.
That was the original definition. Today, the definition is very skewed and depends on many various factors. Sometimes you don’t even have to leave your country in order to get remittances. Case in point if you are a virtual freelancer or when you’re working and you have an account with Fiverr or Upwork or Elance in one of the, you know, markets abroad and you are getting money back to yourself you have remittance provider, is that a remittance. Technically the laws have been adjusted to make it a remittance.
But basically a remittances when a worker works abroad sends the money back home for purposes of Family Maintenance it is considered a remittance. It is not just tied back to the worker. So if you have a cousin or uncle or a sister or brother who sends money regularly. The key here is sending money back home regularly at some periodic period and so forth. And if that money is used for purposes of Family Maintenance, groceries house rent, education and you know clothing etc. utilities then that is termed remittance. I hope that gives you some clarity on the definition.
If you have any more questions or comments there is a link below for my contact form, fill it out. I’ll see if I can answer it. Till next time, have a good one.