Sending Money Home: Your Guide to Remittances
For millions of immigrants living in the United States, remittances are an essential financial service and a vital support lifeline for their families and friends abroad. If you're planning to send money back home, understanding how the remittance process works and what to consider can help you save money and make sure your funds reach their destination safely and efficiently.
What to Consider When Sending Remittances
Transfer Fees
Transfer fees may be charged as a flat fee, a percentage of the total remittance value, or a variable rate based on the amount of money transferred. Other factors affecting transfer fees include the countries involved, the payment method used, and the wire system employed.
Exchange Rates
Currency exchange rates fluctuate constantly. A slight difference in the rate can significantly impact how much your recipient receives. Look for services that offer competitive exchange rates, but be cautious—some companies offer "no fee" transfers while hiding costs in poor exchange rates.
Speed
The speed of your transfer varies by transaction venue. Bank-to-bank wire transfers are usually processed within a few hours to several days. Bank transfers to some countries are especially slow and may take weeks. Retail and peer-to-peer money transfer services like Western Union, MoneyGram, Wise, Xoom, or Xe allow money to be sent and received within minutes. Funds sent via money transfer can be paid from a bank account and by debit or credit card, cash, check, or money order.
Security
The security of remittance services varies by method. Wire transfers and international ACH transfers are generally more secure as your money is sent through encrypted communications between banks. Unlike wire transfers, ACH transfers can be reversed. Identity verification measures and payment reversal policies differ among retail money transfer services.
Methods
Bank transfers
Money can be sent internationally between bank accounts by wire or international ACH transfer. Money sent via wire may have to be transferred between intermediate banks before reaching the recipient's bank and therefore might accrue additional processing fees along the way. ACH transfers, unlike wire transfers, can be reversed but typically take longer to complete. Banks usually charge a flat fee for international wire transfers and might impose minimum limits for funds to be transferred. On average, International wire fees range from $40 to $50 for outgoing transfers and $0 to $20 for incoming transfers. Your bank may waive the flat transfer fee if you convert your payment from US dollars into your desired foreign currency before transferring, though you or the recipient are still likely to incur exchange surcharges. Banks often markup the exchange rate applied to consumer currency conversions, meaning less of your money gets to the recipient. Compare your bank’s exchange rate to the mid-market exchange rate before making your transaction. You may make international wire transfers through your bank online, over the phone, or in person at a local branch. Banks typically charge lower fees on international transfers made by phone or online than on those made in person with the assistance of an agent. To make a wire transfer, you will need to provide the following information:
The name and address of your recipient’s bank
Your recipient’s name, address, and the account type they have with their bank (e.g. checking, current, savings, money market)
Your recipient’s account number or IBAN (International Bank Account Number, much of the world uses this format for their bank account number)
The recipient’s bank’s BIC/SWIFT code
International wire transfers may take anywhere from a few hours to several days or even weeks, depending on the banks and countries involved.
Comparison of fees charged by major banks for international wire transfers.
Retail money transfers
You may also send money internationally through a retail money transfer service. Money transfers are a preferable option for customers who are unbanked, looking to send or receive remittances in cash, or wish to send or receive money within minutes. Money transfer operators include Western Union, MoneyGram, Ria, Wise, Xoom, Xe, Remitly, and Paysend. Most operators process transfers in real-time and funds are usually made available to recipients within minutes. Transfers can usually be paid from the sender's bank account, in cash, or by card or mobile wallet.
Exchange rates and processing fees vary widely between transfer operators and payment methods. For example, payments made with cash or credit cards typically carry the most expensive fees. Some operators waive fees on certain transactions. Most operators apply marked-up exchange rates to currency conversions. Others, like Wise, provide currency conversions at mid-market rates—their real price. Transaction fees may also vary in proportion to the amount transferred, with higher values subject to discounted fees. Operators may impose minimum and maximum transfer limits. It is important to compare fee structures and exchange rates across operators.
Many transfer operators offer cash pickup and even home delivery options to recipients. Western Union, MoneyGram, and Ria each operate hundreds of thousands of outposts around the globe, making them an optimal choice for those looking to send cash payments and for recipients who are unbanked or do not have access to electronic banking services.
Comparison of services offered by major international money transfer service operators and their fee structures.
Safety
As digital platforms become more prevalent in facilitating remittances, it's essential to be vigilant against potential scams. Common fraudulent schemes include impersonation of government agencies, phishing emails, and requests for payments via unconventional methods like gift cards or payment apps. To protect yourself, always verify the authenticity of the service provider and avoid sharing personal information with unverified sources.
According to the World Bank, global remittances totaled $656 billion in 2023. For many families, these funds represent a critical source of income, helping to cover the cost of basic needs like food, healthcare, housing, and education. In countries like El Salvador, Nepal, Jamaica, and Lebanon remittances make up more than 20% of GDP, fueling local economies and stabilizing currency markets. Moreover, remittances often stimulate local businesses, as families use the funds to start small enterprises, creating jobs and fostering entrepreneurship. Remittance flows persist even in times of economic downturn, providing critical support to vulnerable populations abroad whose livelihoods or financial health might be threatened by crises like natural disasters or political and economic instability. For immigrants in the United States, understanding this broader impact can be empowering. Every dollar you send home not only helps your loved ones but also contributes to the development and stability of your country of origin. It’s a powerful form of solidarity that connects families across borders and uplifts entire communities.