Remittances: The Complete Guide to Sending Money Home
Millions of people send money to family abroad every month. Learn how to do it cheaply, safely, and quickly.
Remittances — money sent by migrants and diaspora communities to family in their home countries — total over $800 billion annually worldwide. For many families in developing countries, remittances are their primary source of income. Yet the global average cost of sending a remittance is still around 6–7%, meaning billions of dollars are lost each year to fees.
The Real Cost of Remittances
The G8 and G20 have set a goal of reducing the average remittance cost to 3% or below. Progress has been made, particularly on high-volume corridors like US to Mexico or UK to India, but fees remain high on many routes — especially to Sub-Saharan Africa.
Top Remittance Corridors
- US to Mexico: Over $60 billion annually, one of the world's largest corridors. Competition has driven costs down to 3–5%.
- US to Philippines: Major corridor with several competitive providers.
- UK to India: A large and increasingly competitive corridor.
- UAE to Pakistan/India/Bangladesh: Significant volumes from Gulf migrant workers.
Choosing the Right Service
For speed: Mobile money services like M-Pesa (for Kenya/East Africa) or bank mobile apps can deliver money within minutes.
For value: Specialist services like Remitly, Wise, and WorldRemit typically offer the best combination of rate and fee on major corridors.
For access: In countries with limited banking infrastructure, cash pickup services through agent networks (Western Union, MoneyGram) provide access even without a bank account — though at higher cost.
Safety and Regulation
Only use regulated money transfer services. In the US, money transfer businesses must be licensed with FinCEN and registered in each state where they operate. Look for providers that are licensed, show clear fee disclosures, and offer tracking.
Tips for Reducing Costs
- Compare multiple providers before every transfer using a comparison tool
- Transfer larger amounts less frequently rather than small amounts often — many services charge flat fees
- Avoid bank wire transfers on remittance corridors; specialist services are almost always cheaper