What is Remittance?
The most common and understanding way to define remittance would be
“The transfer of money or goods by migrants back to their friends and families across the borders, from one country to another.”
The International Monetary Fund (which is the principal provider of remittance related data) provides two major components of remittance.
1) Financial Compensation of Expatriates: This refers to the income earned by the migrants working in other countries away from home.
On average, migrant workers send between US$200 and $300 home every one or two months. It may come as a very surprising fact to you but, this represents only 15 per cent of what migrants totally earn: the rest –85 per cent – usually stays in the countries where they actually earn money, and is re-ingested into the local economy, or saved.
(Source: UN News)
2) Personal Transfers: This term refers to all current transfers in cash or goods from residents of one country (can be migrants or non-migrants) to the individuals residing in another country.
The International Day of Family Remittances
On June 16, every year, the International Day of Family Remittances has observed globally to emphasis the importance of transferring of funds, and it’s financial and socio-economic contributions. Through this observance, the United Nations aims to bring greater awareness of the impact that these contributions have on millions of households, but also on communities, countries, and entire regions. The Day also calls upon governments, private sector entities, as well as the civil society, to find ways that can maximize the impact of remittances through individual, and/or collective actions.
This year, the International Day of Family Remittances (IDFR) will be observed under abnormal conditions. COVID-19 pandemic has changed the world. Millions of migrant workers are losing their jobs, and many families are suddenly pushed below the poverty line.
The families of these senders are typically both resourceful and resilient in the face of difficult circumstances and changing conditions. But COVID-19 is disrupting an entire system that directly involves 200 million migrant workers, half of them women, around the world and their 800 million family members back home. (Source: United Nations)
Contributions of Remittances to Economy and Social Development:
Although the amount of average monthly remittance of USD200 to 300 is roughly 15% of what migrants generally earn over the course of a month or two, but it is often a major part of household income back in the home country of migrants, or sometimes it is even the sole source of the household income of expatriates’ family.
Gilbert F. Houngbo, President of the International Fund for Agricultural Development once emphasized the importance of this fact as:
“The small amounts of $200 or $300 that each migrant sends home make up about 60 per cent of the family’s household income, and this makes an enormous difference in their lives and the communities in which they live.”
Interesting Facts About Remittance:
According to the United Nation’s official news release:
- Half of the Money Goes to Rural Areas: Around half of global remittances go to rural areas, where three-quarters of the world’s poor and food-insecure people live. It is estimated that globally, the combined cash flow of remittances to rural areas over the next five years will reach $1 trillion.
- Remittances are three times More Important than International Aid: Remittances are a primary source of capital that’s over three times the amount of Official Development Assistance (ODA) and foreign direct investment (FDI) combined.
How to Send Money Globally?
The most traditional and conventional way to transfer your money was to visit nearby banks or money transfer agencies that are providing with the remittance services. The cash is usually deposited to banks or agents, and then they transfer these amounts to the destination of your desire and charge their fees.
With the advent of technology and smart devices, the more convenient ways to send money to Nigeria, Pakistan, Ghana and all other countries aroused. Mobile wallets and online money transfer apps have made remittances very secure, fast, efficient and a lot easier.
There are plenty of money transfer services available in the market providing many different options for the senders. They choose the services according to better exchange rates, the quickness/speed of money transfer services, security or a combination of these factors.
ACE Money Transfer is globally renowned for its fast and secure money transfer services along with better exchange rates so that its customers can enjoy the maximum value of their hard-earned amounts. ACE Money Transfer is not highly-priced because it charges you with very affordable fees. On International Day of Family Remittance, ACE offers zero fee on all money transfers. If you have registered yourself with ACE through an online account, it is a lot more convenient, fast, secure, and cheap. No matter in which receiving corridor of ACE you wish to send money online, ACE Money Transfer is the right choice.