Remittance - Definition
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What is a Remittance?
Remittance refers to cash sent by migrant workers to other people back in their country of origin. Remittance is derived from the term remit, which means to send back. Remittances can be business payment or personal money.
How is a Remittance Sent?
There are a number of methods for sending remittance. We have methods such as:
- Wire transfer
- Cash points
- Payment via electronic
- Bank draft
- Mobile money
Note that the above methods of remitting money involve charges. However, the charges differ from one method to the other. For instance, banks charge a higher remittance fee, and their exchange rates are also a bit low compared to other methods. So, if you are sending your remittance through a bank, you will pay a high fee. There are also offline companies such as MoneyGram and Western Union. These two offline companies were big players back then. However, with time, people shifted from these and instead opted for online providers who happen to offer fair exchange rates at a lower fee and without any hidden charges.