Remittance

Remittances are an important source of income for many households and countries. Migrant workers often send part of their earnings home to support relatives, pay for education, healthcare and housing or invest in small businesses.

For some countries, remittances represent a large share of the economy, sometimes more than a fifth of GDP, and can exceed foreign aid or foreign investment. Countries such as India, Mexico, the Philippines and Egypt receive very large amounts of remittances each year.

For example, a worker employed in the Gulf might send money each month to family in South Asia through a money transfer service or a mobile app.

Remittances can be sent through banks, specialist money transfer companies, mobile money services and online platforms. Costs can be significant, including transfer fees and exchange rate markups, and they have historically been higher for smaller amounts and for some routes. Reducing remittance costs is a goal of international development agencies, since lower fees mean more money reaches families. Digital services have increased competition and reduced costs on many routes.