Monday, July 15, 2024

12 Money Remittance Tips For New OFWs

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The importance of sending money to Overseas Filipino Workers’ (OFWs) family members cannot be overemphasized. With millions of Filipinos working overseas, remittances are important for supporting their loved ones back home and contributing to the Philippines’ economic progress. Remittances from OFWs totaled $35.1 billion in 2021, accounting for nearly 9.8% of the country’s GDP.

Many families rely on these remittances to satisfy necessities, invest in education, improve healthcare, and even start small companies. These programs provide financial security and develop a sense of connectedness and emotional support over the vast distances that separate OFWs from their families.

The act of sending money becomes a testimonial to the steadfast dedication and sacrifice of Filipino migrant workers who seek to uplift their families and contribute to the overall welfare of their nation in this setting.

No wonder every cent remitted back to loved ones back home counts. Although there are so many remittance agencies out there, it pays, no pun intended, for new OFWs to be mindful of the money remittance tips that help them save money, time, and effort.

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Research and compare remittance providers.

Consider aspects such as exchange rates, costs, transfer speed, reliability, user ratings, and the availability of simple transfer options when comparing remittance providers to determine which gives the best overall value and suits your needs.

Provider Advantages Disadvantages
Wise * Low fees * Competitive exchange rates * Wide range of countries supported * Available in over 50 countries * Easy-to-use website and app * Transfer times can be slow * Customer support can be slow to respond
Remitly * Fast transfer times * Available in over 150 countries * Easy to use website and app * Good customer support * Fees can be high * Exchange rates may not be as competitive as some other providers
WorldRemit * Fast transfer times * Available in over 150 countries * Easy to use website and app * Good customer support * Fees can be high * Exchange rates may not be as competitive as some other providers
XE Money Transfer * Competitive exchange rates * Wide range of countries supported * Available in over 200 countries * Easy to use website and app * Transfer times can be slow * Customer support can be slow to respond
OFX * Competitive exchange rates * Wide range of countries supported * Available in over 190 countries * Excellent customer support * Fees can be high * Transfer times can be slow
Western Union * Wide network of agents * Available in over 200 countries * Easy to use * Fees can be high * Exchange rates may not be as competitive as some other providers
MoneyGram * Wide network of agents * Available in over 200 countries * Easy to use * Fees can be high * Exchange rates may not be as competitive as some other providers
Ria * Wide network of agents * Available in over 150 countries * Easy to use * Fees can be high * Exchange rates may not be as competitive as some other providers

Understand the exchange rates.

One currency’s relative value determines how much money you will get in the recipient’s currency. Current exchange rates must be monitored because they can fluctuate and affect the money received during a remittance transaction.

Comparing exchange rates from several remittance providers will assist you in maximizing the value of your transfer.

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Filipino migrant workers send money back home in a remittance center on Wednesday, June 11, 2008, in Hong Kong, China. Remittances from Filipinos working abroad rose 9.4 percent from a year earlier to a record $1.4 billion, the central bank said in Manila. The amount grew 15.5 percent in February. The value of remittances, equivalent to about a 10th of the $117 billion Southeast Asian economy, is shrinking in local currency terms as the peso trades near an eight-year high against the dollar. Photographer: Jerome Favre/Bloomberg News

Compare cable and remittance fees.

Fees for remittance agents may vary depending on their business model, operational costs, partnerships with financial institutions, and the intricacy of their transfer networks. Furthermore, criteria such as transfer speed, destination country, and amount remitted can all influence the costs paid by various remittance agents.

Provider Transfer fee Exchange rate Maximum transfer amount Delivery time
Wise No fee for transfers under $120; $1.50 for transfers over $120 Up to 0.5% above mid-market rate $100,000 1-2 business days
Remitly $2.99 for transfers under $100, $1.99 for transfers over $100 Up to 1% above mid-market rate $100,000 1-2 business days
WorldRemit $1.99 for transfers under $200, $1.49 for transfers over $200 Up to 0.5% above mid-market rate $100,000 1-2 business days
XE Money Transfer $3 for transfers under $500, $2 for transfers over $500 Often between 0.4 and 1.2% above mid-market rate $250,000 1-4 days
OFX No fee for transfers under $1,000, $3 for transfers over $1,000 Up to 0.5% above mid-market rate $1 million 1-3 business days

Consider the transfer speed.

Consideration of remittance speed is critical since it dictates how quickly the recipient will receive the funds, which can be critical in emergencies or when instant access to the money is necessary. Faster remittance services can bring peace of mind and ease, especially when financial assistance is required quickly.

If your transaction is not time-sensitive, you may want to examine other options, which frequently have better rates or cheaper remittance fees to compensate for the speed disadvantage.

Verify the recipient’s details.

Verifying recipient information is critical to ensuring that money are sent to the correct recipient and avoiding errors or delays in the remittance process. Double-checking the recipient’s name, account number, and other pertinent information reduces the possibility of funds being sent to the wrong person or account, enhancing transaction security and accuracy.

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Use secure platforms.

When sending money, use secure systems to protect your personal and financial information from unauthorized access or potential data breaches. Secure platforms use encryption protocols, robust authentication mechanisms, and other security features to ensure your sensitive data’s confidentiality and reduce the danger of fraud or identity theft throughout the money transfer process.

Consider alternative remittance options.

Alternative remittance options worth considering include peer-to-peer transfers and digital wallets. These options often offer lower fees, faster transactions, and greater convenience compared to traditional remittance methods. Peer-to-peer transfers allow direct transfer of funds between individuals, bypassing intermediaries, while digital wallets enable instant transfers and provide a seamless way to manage and access funds.

Stay updated with regulations.

When sending money, staying up-to-date on regulations is critical since it helps assure compliance with legal requirements imposed by your country and the recipient’s country, such as anti-money laundering (AML) and know-your-customer (KYC) standards. Adherence to these standards contributes to the integrity of the remittance process, lowers the danger of fraudulent activity, and assures a smooth and lawful cash transfer.

Understand transfer limits.

Understanding transfer limitations is vital since it allows you to arrange your remittance activities within the regulatory bodies’ permissible thresholds. In the Philippines, for example, the maximum daily cash pick-up limit for remittance services such as Western Union is normally P500,000 (approximately $10,000). However, the maximum online transfer limit varies based on the remittance provider and the customer’s verification status.

Knowing these restrictions allows you to make more educated judgments and guarantees compliance with regulatory obligations.

Check for hidden fees.

Currency conversion fees, intermediary bank fees, receiving bank fees, and additional expenses for expedited or same-day transfers are hidden fees in money remittance. To discover any potential hidden fees and make an informed decision based on the entire cost of the transaction, it is critical to thoroughly analyse the terms and conditions or price schedules of remittance providers.

Keep transaction records.

Keeping transaction records is essential for remittance since it provides you with a recorded history of your transfers, including receipts, confirmation numbers, and other pertinent information. These records serve as proof of transaction, can aid in the resolution of any issues or discrepancies that may emerge, and can be used as a reference for future inquiries or follow-ups with the remittance provider.

Be cautious of scams.

Examples of money transmission scams include phishing emails or messages requesting personal information or payment details, fraudulent remittance agents that disappear after collecting funds, and bogus remittance websites that look like reputable providers.

To avoid fraud, avoid unwanted communication, check the legitimacy of remittance providers before sending money, and conduct transactions on safe and trustworthy platforms or websites. Furthermore, never send sensitive information or money to unknown individuals or groups.

 

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