Money transfer / Remittance

Financial transfers made over the phone that cannot be linked to the purchase of a product or service, i.e. that are not payments, are called electronic money transfers. In a narrower sense, it is also used for money sent home by workers abroad.

We usually talk about sending money electronically when we can arrange some kind of financial transfer from a phone, and it is not used to pay for some goods or services. 

At the same time, the term sending money is often narrowed down in several ways. 

In one approach, this is understood as transactions between two private individuals. However, in its original sense, the term can also be used for business transfers, and sending money between individuals is more commonly referred to as a person to person. We describe it with the term (p2p).

Another limitation is that the term is used much more often for cross-border money movements, which often include different currencies conversion between In the ranks of economists, remittance mean the income sent home by people who work abroad.

The fact that the money transfer itself can be handled by phone makes the matter electronic. Today, of course, this is not such an adventure, since we can send money by phone through many service providers, and almost all bank mobile banking service has the same option. This distinction has essentially lost its meaning. 

When sending money, two basic cost may arise, the sending fee and the conversion cost. Overall, this is measured by the percentage of the sent money that appears on the recipient's account. The fintech with the emergence of companies, these costs have decreased rapidly in the last decade compared to when only banks and a few service providers were able to send money abroad.

The best online financial service providers today close to the middle rate they exchange the money sent, which improved the rate of arrival at the destination by up to 4-6 percent. In addition, sending fees have been significantly reduced, and fee structures have become much more transparent. 

At the same time, the time to arrive at the destination also decreased. Before online payments became commonplace, this could often be a week. Today, the better service providers undertake to deliver remittances to overseas or exotic countries within two days, but they often arrive much sooner than that. There is also the possibility of an immediate transfer if a certain surcharge is assumed.