Do you need to send a money transfer, but came across abbreviations and financial jargon? These terms might make sending money a more daunting task than it is.
Let us shed some light on what it all means. So, when you make your next transfer, nothing will surprise you.
What is 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 there are two key factors 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 different methods for doing so, including:
- Wire transfer
- Cash pick up
- Mobile money
- Electronic payment
- Bank draft
The cost you need to pay depends on the provider and service that you choose. Generally, banks charge high fees and provide poor exchange rates on remittances.
Offline companies like Western Union or MoneyGram used to be the big player in the past. Recently, people shifted towards online providers like as they offer the best value for money.
At WorldRemit we make sending remittances online simple, secure and convenient. Our low fees and fair exchange rates are shown upfront; we promise, no hidden fees.
Remittance jargon buster
Ready to send a remittance? Use our handy jargon buster to demystify remittance jargon and simplify the process.
If your card uses 3D secure, a window will appear on the screen when you are 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.
When goods are purchased, or funds are taken from an individual’s credit or debit card without their permission. Credit and debit card fraud can happen when an individual’s card is lost or stolen, if their card is cloned or copied, or if their card details fall into the wrong hands.
A short-term loan offered by banks and other financial institutions. Cash advances often come with high fees and interest rates.
A cheque written and guaranteed by a financial institution, usually a bank. Cashier’s cheques are popularly used to make large payments where extra security and protection may be required as they guarantee that the funds will be available when the cheque is cashed.
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.
An electronic wallet (sometimes referred to as a digital wallet, mobile wallet, or eWallet) is a virtual system that stores payment cards or money on a mobile device. An electronic wallet can be used to make payments to participating merchants quickly and easily using a mobile device.
The amount that one currency is worth when compared to another currency.
A transaction that has been declined by your bank or card issuer.
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 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 comprises up to 34 letters and numbers and 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 certain time period. 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.
A paper document that can be used as a form of guaranteed payment. A money order can be bought or cashed at a variety of locations including banks, post offices, credit unions and some retail stores.
Proof of deposit
A verification or an official confirmation proving that funds were credited do a bank account or received by a recipient.
Peer to Peer service
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.
Preauthorization is a temporary hold of funds on a debit or credit card for a vendor to capture it. Funds are 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 do not need a bank account to get one. With WorldRemit, you can pay with a prepaid card as long as it’s issued by Visa, Mastercard or Maestro.
Real-time payments are electronic payments that can be made 24/7 and are available to the payee immediately, or within seconds.
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 a remittance 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 that easy!
Here's how it works.