What is Remittance?
Remittance refers to the sending or transfer of money to another person or party (usually a family member) living in a distant location. Also known as forex (foreign exchange), remittance enables the exchange of foreign currencies across countries.
With globalisation on the rise, sending money overseas has become an established pattern within the Australian workforce in recent years. For instance, in 2011 a study conducted by the World Bank estimated that Australia was the 19th largest source of remittances in the world, and the rate has only increased since then.
Major countries both sending and receiving remittances to Australia include India, the Philippines, China, Vietnam, and Indonesia.
Why Send Money Overseas?
Many Australian workers choose to send money overseas for a number of reasons. These may include occasional transfers such as gift giving or emergency support, to include more regular transfers such as child support payments, and living expenses.
Who Needs Remittances?
The majority of remittances sent from Australia come from migrants and temporary visa holders, for whom remittance plays an integral role in the support and welfare of their family overseas.
Not only do remittances provide economic benefits to the households of migrants by providing a secondary source of income, but they can also impact communities at large by promoting economic development and providing employment opportunities for residents in countries with poor economic growth, thus reducing poverty. In fact, in some countries, remittances from overseas exceed the amount of money received through foreign aid and foreign investment.
However, remittance is important not just for migrants sending money to their families, but also for Australians receiving money while overseas. Another major source of remittance outflow from Australia comes from concerned parents or family members sending money to their loved ones while working or holidaying overseas.
With the rate of remittance on the rise, and the rapid advance of technology and global communication, the demand for services that specialise in secure, speedy money transfer is greater than ever. If you are after more information on sending money home or looking to set up an international transfer payment schedule see Compass Global Markets, they’re better than the banks.