What is a Remittance?

A remittance is another common form of money transferring through the digital payment system. It is also very old and is considered to be the traditional method of sending money. It is also more related to sending or transferring money overboard. There are various useful methods to send remittance money. It can be sent for different purposes. In short, if you are transferring money to pay a bill, or paying an invoice, then it would be regarded as a remittance. 

Why do people use the Remittance Method?

Several reasons lead to the transferring of money. Most commonly, this money is sent to the family back at the remitter’s home. It can be sent to families or friends to pay invoices, bills, tuition fees, or for medical assistance. Sometimes, this money can be sent to pay for the booking of a destination wedding. Most of the time, you are supposed to send the money beforehand. So, for all the pre-booking facts, you have to send money before reaching.

Many people like to enjoy vacations once a year in different parts of the world. So, these people also have to make pre-booking arrangements. We have also observed that many people are getting interested in investing abroad. So, these people pay through remittance to the realtors and landowners. Moreover, the remittance money can also be used to make a purchase or buy something from another foreign country. 

How does Remittance Work?

One of the important things is that the money in the sender’s account should be remittance money. The sender needs to allow the remittance transaction and once it is cleared, the money is transferred into the bank of the receiver. Once the recipient bank has received the money, the banking charges will be applied. When you are sending money overboard they will also charge you with the currency exchange rate. This is very helpful as the recipient can receive money in their local currency form. 

Common Types of Remittance Methods

It is indeed a fact that remittance helps a country in improving its economy. There can be different mediums to send remittances. These mediums include

  • Bank Transfer
  • Pickup method
  • Delivery at the Footstep
  • Mobile Account

The person sending the money can use a wire transfer or any bank transfer method. It is up to you which method you want to use, keeping in mind the aspect of you want to send money urgently or not. 

What are the most common types of Remittance?

There are two of the most common methods of remittance that are used more frequently. 

  1. Inward Remittance
  2. Outward Remittance

Inward Remittance

As the name suggests, this remittance aids in sending the money from the remitter’s account to the recipient internationally or locally. It can include a person living abroad sending money to his family in another country. This transfer can be named an inward remittance. 

Outward Remittance

This involves sending money to a foreign country. For instance, if you live in India and your child is studying abroad n a university. So, the funds that you transfer in his/her account from India would be called outward remittance. 

Things you need to Know about Remittance

Here are some important facts that you need to know before you transfer your remittance money.

Remittance Advice

Though remittance advice is only for professional or business use you should know about it. It is a drafted file or document that a remitter sends to the supplier of the money. The documents state if the invoice has been sent or not. 

Remittance Time/ Float

It signifies the duration of the time that a transaction needs to be processed as well as sent. The time duration of your money transfer depends on the method you are using for remittance. So, your remittance float will keep the details of the time your money would be transferred in.

The Address

Your remittance address will indicate the address of the recipient, the one who is receiving the money. It can be an address of a business organization or any home location you’re sending funds to. So, you have to be very careful when you forward the address for remittance. As this will save you from misplacing your money.

The remittance money has helped many countries in growing and strengthening their economic system. Remittance has become more like a business trade for some of these countries, where they don’t spend but only earn the profit.

Remittance is a safe and convenient method to use. You don’t have to get yourself involved in any heavy sort of paperwork just to send some money overseas. So, we hope you get a good experience like many other people after using the remittance method.