Based on the 2019 survey done by the UN Department of Economic and Social Affairs Population Division, the worldwide expat population has surpassed 272 million people. In the following years, it is projected to grow. The planet is, without a doubt, shrinking by the minute.
People are moving to other nations nowadays for various reasons, including better salary, a higher standard of living, job advancement, or other personal reasons such as increased migration results in more money getting transferred between countries that impact how global economies operate.
What is it?
While Remittance appears to be a 21st-century occurrence, it stretches back to the industrial revolution. Many analysts believe that farmers and labourers began migrating to larger cities to pursue jobs during the industrial process. They frequently send money to their family's home to help them fulfil their necessities. Remittances continue to assist families worldwide in meeting their daily needs, just as they did back then.
So, what does Bank Remittance imply? It happens when the person working in a foreign country sends money to a loved one in their native nation.
How does it work?
Any country's primary source of cash inflow is Remittance services. Most of the cash gets transferred to benefit developing countries. The procedure is simple: expats save a percentage of their salaries and transfer money to their families back home.
It happens through a legal method, such as mail, Bank Transfer, Banking apps, money order, or a licensed Wire Transfer company. The remitter sends money to their family from their current resident country. The funds are computed and converted automatically based on current exchange rates and credited to the receiver's account in the recipient's native country's currency.
What are the types?
- Outward Remittance is when expatriates transfer money back to their home country.
- The procedure of the expat's family getting this money is called Inward Remittance.
Remittances help countries recover from financial setbacks. Here is how:
- Remittance Transfer tends to boost a family's purchasing power and consumption. It leads to improved food, education, healthcare, housing, and lifestyle options, among other things.
- It benefits the receivers immediately. As there are no intermediaries involved, the corruption risks reduce. Governments worldwide have implemented a variety of tax-free accounts and other incentives to encourage foreign transfer through legal methods.
- Remit Money boosts a country's GDP and per capita income.
- During natural calamities like floods, earthquakes, and tsunamis, Inward Remittance helps.
The remitter controls how and where their money is spent, which is the most significant benefit.