People who work out of their home countries would like a formal channel through which they could send money to their families safely. Funds that are sent by foreign workers to their native countries are known as remittances. In order to transfer these remittances on the international scale, laws and regulations are applied to provide security to individuals and to regulate the capital inflow as well.
Like many other industries, the changes and innovations brought to the laws applied on remittances plays a major role in money transferring industry. According to these laws, the companies providing money transferring services overseas need to align their business to local laws and system of the regions that they function in. Let’s look at a few trends in formal money transferring setups that can affect the remittances sent and received all around the world:
- The open regulatory environment, when it comes to remittances, allow non-banks to perform international remittances through mobile wallets. Non-banks can get a wallet license easily.
- Remittances can also be affected by high transaction rates associated with sending and receiving of these funds as well as the amount of money that has been sent.
- If you are sending money, laws are made that requires you to provide you with personal information. The exact information required will vary depending on exactly how much you’re sending and in which country your money will be received.
- The trend caused by the restrictive anti-money and anti-terrorism financing policies called de-riskingis the single major threat facing the remittance industry. It refers to the act of financial organizations breaking relationships and closing the accounts of clients who are perceived to be “high-risk”.