Remittance and its drive to development

Remittance is the key.

Access to banking and financial tools has become an integral part of everything today. Most of the population around the world has access to modern financial tools than ever before. One can imagine the competition among financial institutions to grab a share to serve such a humongous crowd.

There are numerous providers to choose from, for payment solutions but only a few are considered most useful. No rocket science there. If simple factors like smooth user experience, convenience, support for resilience to unpredicted financial volatilities are achieved, that already puts an institution ahead of the race. Once it has happy customers everything is a blessing. Remittance is one of those.

We all know that the world is a global village now. For various reasons, fresh pass outs to experienced skilled labour, everyone is ready to migrate to a better place to earn and live. Not surprisingly, the number of international migrants globally in 2019 is over 272 million people (3.5% of the world’s population). Just imagine the steady stream of transactions to know the scale.


As per World Bank’s press release dated April 23, 2018, to a tune of over $600 billion moved around the world as part of the remittance industry in 2017. Interestingly enough, $466 billion were sent to low and middle-income countries proving a point that remittances are a crucial source of income for millions of low-income families. For many of them, remittances could be their first financial product too. With over $79 billion sent in 2018, India actually ranks 1 in global remittances.

What is the process of remittance?

Since it ranks 1 and with so much said about remittance, let’s go through the steps to remit money to India.

1. Define your requirement and choose the provider wisely

Are you planning to do it online, in person?

Is the receiver insisting on you giving the money in cash or in their bank account?

How fast do you need to send it?

What are the applicable fees?

What are the exchange rates?

These steps look simple but they are very important in easing the process of choosing the right provider. The providers change based on your requirement. For example, if you want to send the money in cash one fits the bill and if you want to send it digitally another one. There are providers even if you want to carry out the remittance in cash and your recipient wants hard currency too.

However, the biggest factor that differentiates between the providers is going to be the exchange rates and fees. Good research helps you from overpaying for a remittance.

2. Collect the details

Once you have chosen the provider, you have to collect the necessary information that you are going to need for the remittance.

In this Indian context, for online transfers a few of them are as follows:

a. Recipient's name

b. Address

c. Bank Account Number

d. Branch IFSC code.

e. Phone number and email address.

Similarly, for cash remittance you and your recipient both need to carry ID card and provide the exact details like transfer reference code to verify it.

These details change as per the country you reside and the providers you have chosen.

3. Payment

It is a child’s play in this age.

a. Debit card

b. Credit card

c. Bank Transfer


e. Cash in person

These are the usual ways for payments and the fees you pay depends on the payment method you choose out of these. Credit card payments are the fastest but come with their own set of extra charges whereas bank transfers may be comparatively slow but also cheaper.

4. Receiver

This step is linked to the first one. The recipient gets the money based on the provider you choose or the method you both agreed upon. He can receive the money directly to his bank account or pick up the cash from a local branch. Nowadays, many providers have made it even easier by offering options to receive the money directly to mobile wallets with a notification by SMS or an email.

With so many NRIs sending money home from their earnings, they generally are faced with this doubt about taxation. Is NRI remittance taxable? India is part of the Double Taxation Avoidance Agreement, so if taxes are paid on earned money abroad then no, there won’t be any tax at the receiving end.

How does remittance help?

Even though not directly, remittances can be considered as the first step for an increase in financial inclusion. There are research reports from world bank demonstrating a positive correlation between remittances and deposits & credits.

There are Governments who use remittance as a trusted channel of payments for various schemes. This directly helps create trust and usage of the method. There is a score that remitters using bank transfers send on average 30$ more than those using informal channels proving their trust.

Global Remittance Volume Forecast
Global Remittance Volume Forecast

Several other factors like smartphone penetration, the adaption of digital transactions, need for safe and fast cross-border transfers have fuelled digital growth globally. This shift has opened new venues and brought in younger, digital-savvy customers using remittances apart from the above-discussed income groups.

This is resulting in increased competition among firms to navigate the global remittance industry. Not everyone can match the ever-changing speed and win. Companies who prioritize and provide value to customers on factors like cost, convenience, speed and safety emerge as winners and help drive the economic growth by providing the much needed financial flexibility.

While firms like TransferWise and others are catering to the Indian market, there are proven global players like WesternUnion, PayGlobal who has made remittance as their forte.

Digital Marketer — Strategic Sourcing Specialist — Content Writer and Creator — loves video games, esports, comics, music, and entertainment media.