Sending money abroad, also known as remitting, can be a complex process with various regulations and laws to consider. Depending on your country of residence, the rules and fees associated with remitting money can vary greatly.
According to a report by the World Bank, global remittance flows reached $689 billion in 2019, with developing countries receiving the majority of these funds. However, these transfers can come at a cost, with some countries having higher fees for remitting money compared to others.
Regulations for remittances can also vary by country. For example, in the United States, remittance providers must be licensed by the Financial Crimes Enforcement Network (FinCEN) and comply with anti-money laundering and countering the financing of terrorism (AML/CFT) regulations. In the European Union, the Second Payment Services Directive (PSD2) requires remittance providers to obtain authorization from national competent authorities and adhere to strong customer authentication and security measures.
In addition to government regulations, international organizations such as the Financial Action Task Force (FATF) and the Wolfsberg Group have established guidelines for remittance providers to combat money laundering and terrorist financing.
To ensure compliance with regulations, it is important for individuals and businesses to use reputable and licensed remittance providers. Consulting with a financial advisor or researching online can also provide helpful information on the regulations and fees associated with remitting money in your specific country.
It's worth mentioning that many fintech startups and remittance companies such as TransferWise, WorldRemit, and Remitly have appeared in recent years to disrupt the traditional remittance market by offering lower fees and more transparent pricing, as well as user-friendly digital platforms. These companies have been expanding globally and have been licensed by relevant authorities.
It is also important to mention that some countries have implemented capital controls, which affect the ability of individuals to send money abroad. These controls can take various forms, such as limits on the amount of money and several other forms based on every country.