Worldwide remittance flows are expected to hit $601 billion in 2022. Developing nations are expected to get $441 billion of that total, about three times the amount of official development aid. The actual scale of remittances, including undocumented transfers through official and unofficial channels, is considered far more extensive. Such a growing inflow of remittances to low-to-middle income countries shows that expats from these countries regularly transfer funds back home. Taking an example of the 5th largest remittance recipient nation, Pakistan receives $19.3 billion annually from the expats who send money to Pakistan from abroad.
Remittances are critical to the economy because they provide much-needed funds to increase foreign exchange reserves. They also play an important role in macroeconomic stabilisation since they account for over half of the import bill and cover the trade imbalance. However, they have come under increasing pressure due to the global economic recession.
In the given circumstances, it may be even harder to find the most reliable channels for your hard-earned money to reach your native country on time and with complete trust. Only a few tracks may recognise the importance of quickly receiving these remittances by migrant workers’ families. They may assist you with various efforts to ease the flow of remittances through legal channels.
Why Should Legal Remittance Networks Be Prioritised?
It is an obvious concern that alternative remittances may also imply to be unreliable transfers. Most benefactors choose alternative remittance networks since they are frequently free or less expensive than authorised transfer solutions. If they travel to your home nation, a friend or acquaintance may be willing to transport your money for free. It may be appropriate to trust the individual and be confident that your money will be given when, where, and to whoever you choose.
But what if your friend or acquaintance proves to be untrustworthy? Even if they are trustworthy, what if they misplace the money or are robbed while in transit? Or most of the time, your friends might not even travel when you need to send money to your native country.
Alternative remittance services may be inexpensive or even free, but they are not always safe and secure. You are putting your hard-earned income in danger since there is no assurance, and you are entirely relying on the person’s timetable to deliver the money. Alternative remittances are dangerous and unreliable if you need to send payments urgently or regularly. It is better to use legal systems so that you may not be worried about any of the abovementioned remittances.
Best Remittance Channels for Migrant Workers in 2022
While traditional remittance services continue to flourish among migrants and their families, online money transfer services via ATMs, the internet, and mobile applications have recently caught up. For people who are dissatisfied with the services of traditional cash brokers, online remittance services are an excellent option. The question still lingers on the migrant’s heads, whether to send money online or by the traditional method. If you’re still undecided, weigh the advantages and disadvantages of each alternative. This way, you may choose which one best suit your demands (as well as those of your receiver). To ensure both ends meet the same level of service quality, you can choose ACE Money Transfer with confidence to make an online money transfer to Pakistan or any other origin country.
A Bank Transfer – Traditional Method of Remittance
A bank remittance is a transfer of funds from one bank account to another, usually as a present or payment. Remittances are payments transferred by an electronic payment system, wire transfer, mail, draught, or cheque to settle bills or invoices. A bank remittance plays an extremely important role in today’s banking system. So, how exactly does a bank remittance work? To begin with, you must pre-fund your bank account using your home country’s native currency.
For example, to send money to Bangladesh from Canada, you must have at least $500 prepaid in your Canadian bank account. Once the cash arrives in the specified Bangladesh bank, the receiver must call their local or finance department to acquire the current foreign exchange rate. The recipient’s bank then uses the rate to convert the remittance into local currency. In most circumstances, the bank will use a retail exchange rate, especially when the amount involved exceeds £1,000. The disadvantage is that these prices are designed to maximise profit for the receiving bank rather than the client. Most of the time, remittances make up a sizable share of GDP in several nations (gross domestic product).
- Pros and Cons of Bank Transfers
- Flexible channel: You can pay in cash using a bank deposit, credit card, or debit card. Your loved ones can pick up the funds in person at one of the remittance centre’s local branches, offices or partner locations.
- Expensive with extra charges: Remittance through banks can be as expensive as £20 for one transfer to Bangladesh. They sometimes have hidden or additional charges that you may not even know about. Hence, they are more expensive than online money transfers.
- Accessibility for receivers and senders: The world’s largest conventional money transfer providers have hundreds of thousands of branches.
- Slow services: Slow money transfers, particularly bank-to-bank transfers that take more than five business days.
Online Money Transfer – Modern Day Solution
The most popular channel for sending money to your loved ones is through an online transfer which has become the new trend. During the epidemic, the data was truly visible when transmitting money through traditional channels had several disadvantages. There is no question that the emergence of digital remittances represents a new method of money transmission and a significantly superior process of transferring money for various reasons.
Most consumers are concerned about security regarding digital and online money transfers via websites, applications, systems, or platforms. Banks are trusted because they think they are too big to fail, but they are becoming less innovative. Digital remittance services are as safe as bank transfers but faster, cheaper, and more accessible.
Most people do not even use the online services provided by banks because they rely on reliable sources such as online remittance service providers. Many of these service providers have a more become the staple of the remittance industry and amongst migrants. Such is the example of ACE Money Transfer.
If you are looking to find out the best exchange rates, the lowest transfer costs, and a wholly secure and faster remittance solution to send money to Pakistan online, be a part of the ACE family. To learn about ACE’s products and services, visit their website or contact their customer support team.