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Remittance: the word reports use for what you call sending money home
A remittance is money one person sends to another in a different country, usually to family. What sets it apart from any other transfer.
At home people say sending money. In reports it is called a remittance. It is the same thing, and it is worth understanding what the word measures, because the services advertised under it are not always the cheapest.
What it actually is
A remittance is money one person sends to another in a different country, typically from someone who emigrated to their family back home. It is not a technical category of the payment system: it is a description of who sends, who receives, and how often.
What makes it different in practice
| Trait | What it implies |
|---|---|
| It is person to person | The destination is a personal account, not a company |
| It tends to recur | It can be planned instead of improvised each month |
| It crosses currencies | There is always a conversion, and much of the cost sits there |
Where the money in a remittance goes
Almost never into the advertised fee. The price of the currency conversion rides inside the rate applied, which is what we call the spread, and if the transfer crosses several legs, each applies its own.
The comparison that works
Ask how much arrived, in local currency, for the same transfer. It is the only number that includes everything. The detail is in the mistakes that cost you money when sending money home, and the monthly version in euro payroll and sending money home every month.
Where you will see the term
In reports, central bank statistics, and the advertising of specialized services. In ordinary conversation, almost never.
Related terms
The hidden price of the conversion is in spread and the reference it is measured against is in mid-market rate. The rest is in the glossary.
This is not financial, legal, tax, or investment advice.
Questions on this topic
Is a remittance different from a normal transfer?
Technically it can travel the same roads. What changes is the context: a remittance is a person-to-person transfer, usually recurring and headed to the sender's home country. Reports and specialized services use the term for that reason, not for the mechanism.
How do I compare two ways of sending money home?
By the amount the other person receives in their currency, for the same transfer on the same day. That number includes fees and the price of the conversion, which is almost never charged separately.
Is it better to send more often or all at once?
It depends on what the money is for on the other side, and it is not a decision we can make for you. The operational point is general: every transfer pays for its own route, so batching makes sense when the money is not needed right away.
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