When you need to send a money transfer, do you come across abbreviations and financial jargon? Let’s shed some light on what it all means.
What is a remittance?
The term 'remittance' derives from the word 'remit', which means 'to send back'. Remittance refers to an amount of money transferred or sent from one party to another, usually overseas.
Remittances can be personal money transfers made to family and friends, as well as business payments.
Today, more remittances are being sent than ever before, and two key factors are driving this increase:
- Migration – more people are now choosing to live and work abroad. Therefore, many remittances are made by people working and living abroad to family back home.
- Globally connected businesses – the internet makes it easier than ever for businesses to connect and collaborate with suppliers, clients and employees all around the world. This has resulted in a sharp increase in overseas remittances paying for business invoices.
How to send a remittance
If you need to pay a remittance, there are several ways to do so, including:
The cost you need to pay depends on the provider and service that you choose.
Offline companies like Western Union or MoneyGram used to be big players However, people are now shifting more towards online providers, such as WorldRemit, as they offer the best value for money.
Ready to send a remittance? Use our handy guide to demystify remittance jargon and simplify the process of sending money abroad.
If your card uses 3D secure, a window will appear on the screen when you’re making an online payment, asking you to enter an additional security code before the payment can be put through. This extra layer of security is designed by your card provider and helps to protect you from credit and debit card fraud.
Also known as a bank routing number, an ABA number is a nine-digit code used to identify banks in the USA.
ACH (automated clearing house) payments are made through the USA's ACH network. It's a network that provides bank transfers between bank accounts in the USA.
AML (anti-money laundering) processes are used by financial institutions to detect and prevent illegal money laundering activities used by criminals to disguise money they have gained illegally as lawful income.
A short-term loan offered by banks and other financial institutions, commonly for credit cards. Cash advances often come with high fees and interest rates.
A chargeback is a way of disputing a card transaction. If a chargeback is successful, it will void the card transaction, and the bank will remove the funds from the merchant's account and credit them back onto the cardholder's account.
Clearing refers to the processes and procedures that take place between requesting to wire money and the point when the transaction is complete.
The amount that one currency is worth compared to another currency.
The United Kingdom's financial regulatory body. The FCA (Financial Conduct Authority) is an independent body that protects consumers and promotes healthy competition between the UK's financial service providers.
A financial institution is a company that provides financial services. Examples of financial institutions include; banks, building societies, mortgage companies, credit unions, investment banks, insurance companies, pension funds, and money transfer services.
Forex (foreign exchange market) is an electronic network of banks, brokers, institutions and traders exchanging foreign currencies.
IBAN stands for International Bank Account Number. It is an internationally recognised way for banks around the world to identify an individual's country, bank, and account when money is being sent overseas. An IBAN consists of up to 34 letters and numbers. It can usually be found on your online banking or by contacting your bank.
Every time a merchant takes a credit or debit card payment from a customer, they are charged an interchange fee by the card network.
A KYC (Know Your Customer) process is carried out by financial companies to verify the identity of their customers to prevent their services being used for money laundering and other illegal activities.
Most banks and money transfer services have rules in place that limit the amount of money that you can send in a single transfer or in a specific time. Limits are usually in place to comply with the laws and regulations of the countries you are sending money from and to.
A small, local business that has partnered with a money transfer provider like WorldRemit to offer international money transfer services in-store.
Proof of deposit
A verification or an official confirmation proving that funds were credited to a bank account or received by a recipient.
A platform, like a website or money transfer app, that allows individuals to send money online to each other directly without a bank or foreign exchange provider being involved. WorldRemit is a peer-to-peer service.
Pre-authorisation is a temporary hold of funds on a debit or credit card for a vendor to capture the funds. Money is not taken out of the bank account.
A card that you deposit funds onto and then use in-store or online to make purchases as you would with a debit or credit card. Prepaid cards are a safer alternative to carrying cash, and you don’t need a bank account to get one. With WorldRemit, you can pay with a prepaid card as long as it's Visa, Mastercard or Maestro.
Trying to recall money is trying to reverse a completed transaction back to the sender. Funds have to be retrieved back via the same channels. This process is lengthy and not always guaranteed.
The individual or business to whom the money is being sent.
The individual or business who is sending the money.
An electronic money transfer sent through a network of banks and money transfer providers around the world.
Send money with WorldRemit
Sending remittances is simple when you use WorldRemit – almost like sending a text message.
Download our app and use our convenient service to transfer money to 150 countries around the world using your smartphone, laptop or tablet. It's so easy!Get started