India received 4.4 percent of the total remittances sent worldwide. In contrast, the average amount of remittances received by other countries is merely 1.5 percent.
According to the 2020 data of the World Bank, a total of USD 529 billion were sent in remittances worldwide. And India received the highest remittance at USD 83 billion, closely followed by China, Mexico, and the Philippines.
But where does this money go? Which state in India receives the highest remittance from abroad? How does this remittance inflow contribute to the development of the Indian economy?
When discussing amounts of money in billions, these common questions come to mind, right? Let's try and find some answers for you.
But first, let's understand the concept of remittances from an Indian perspective.
The Reserve Bank of India has segregated remittances into two main types - inward remittance and outward remittance.
Inward remittances refer to transfers of funds to India from abroad. Such transfers are generally of personal nature and are sent to provide family support. For example, you are an NRI in the US, and you send money to your parents in India - that will be an inward remittance.
Inward remittances are typically sent through a bank, money transfer agents, and more recently through online money transfer specialists such as Xoom, Wise, and Remitly. Sending money to India is easy, quick, and hassle-free if you send money online through a top money transfer service provider.
Outward remittances refer to transfers of funds from India to overseas countries. For example, sending money to your children studying in the US from India will be an outward remittance.
Under the Liberalised Remittance Scheme (LRS), an individual can transfer up to USD 2,50,000 per financial year (April-March).
Inward remittances are typically sent through banks. The industry is not as competitive as the inward remittance industry. Although, we now have a few online money transfer companies offering money transfer services from India to the USA at a faster and cheaper rate than traditional ways of sending money.
Kerala received the highest amount of remittance, according to the latest data by the Reserve Bank of India in 2018.
Kerala topped the charts in 2018 by receiving 19 percent of the total inward remittances. Maharashtra closely followed Kerala at 16.7 percent, Karnataka at 15 percent, Tamil Nadu at 8 percent, and Delhi at 5.9 percent.
It is interesting to note that the Indian state of Uttar Pradesh sent the highest number of workers abroad the same year but received only 3. 1 percent of the remittances sent to India.
According to the Ministry of External Affairs data, The United States had the highest number of NRIs with a population of 4.46 million in 2018. Closely followed by the United Arab Emirates (UAE) at 3.1 million, and Malaysia at 2.99 million.
In 2018, at the same time as the date referred above, UAE sent the maximum amount of remittances to India. 82 percent of the total remittances were sent from seven major countries, viz.:
Kerala topped the charts in 2018 with 19 percent of the total inward remittances.
However, this boosted remittance may result from the flooding disaster in this southern Indian State.
Please note that the 2018 survey is the latest state-wise distribution of remittances data published by the RBI. Although World Bank publishes data for country-wise remittances every year, we are using the 2018 data for coherence. While it would be interesting to see the updated pre and post Covid trends in migrations and remittances, fresh analysis for India is inhibited by the limited official data available.
According to the latest World Bank data, the United States sent the maximum inward remittance to India at USD 68 billion in 2020, followed by:
There are different ways of sending money to India. Your mode of money transfer determines how much it will cost you to send money. Here are some popular methods of remittance:
Modes of remittance range from traditional methods: like check and demand drafts to more advanced, easier, and faster channels like online money transfer operators, wire transfers, and SWIFT transfers.
Recently, big techs like Google Pay are testing international money transfers through peer-to-peer (P2P) technology. On the other hand, incumbent money transfer companies like MoneyGram facilitate money transfers through a partnership with popular digital wallets or digital payment apps like Paytm.
Hawala is not a legal way of sending money. It has been declared as an illegal way of transferring money by The Foreign Exchange Management Act (FEMA), 1999.
However, people have used the notorious Hawala system to transfer money internationally. It is illegal and can attract heavy penalties including imprisonment.
Most of the remittance constitutes money sent by immigrants to support their families. In fact, according to the latest report released by RBI, 59.2 percent of the remittances received by Indian residents are used for family maintenance.
The remaining is distributed among banks and investments wherein deposits in banks stand at 20 percent and investments in equity shares, land, property, etc., at 8.3 percent.
How Does The Inward Remittance Benefit India?
The foreign inward remittance to Indian residents has lifted many people from poverty and served as a cushion for families during difficult times. Many households rely on remittance for sustenance.
In addition, remittances help support education, provide quality medical care, and entrepreneurship for friends and families.
For India, the inward flow of remittances has been the backbone of the Indian economy. Remittances are one of the crucial inputs in financing India's trade deficit.
In addition, it is also a great source of foreign exchange. It helps spur consumption in India, ultimately reducing poverty, improving access to healthcare and education, facilitating a healthier lifestyle, increasing financial literacy, asset accumulation, and so on.
Remittances play a vital role in the development of states in India, especially in times of crisis. For instance, when the state of Kerala was devastated by floods in 2018, remittances provided a cushion to spring the economy back into action.
As we continue to see new variants of COVID-19 continuing to disrupt the lives of so many people worldwide, remittances provide a crucial lifeline for many households and economies.
In conclusion, while the state-wise distribution will continue to evolve, India will remain the top recipient of remittances worldwide. India is expected to receive another USD 87 billion in remittances in 2021.
What hasn't changed is - how expensive it still is to send money internationally. The global average cost of sending money is around 7 percent. It can reach up to 30 percent depending on the factors such as the method of remittance, exchange rates, sending countries, and receiving countries.
The good news for the NRIs sending money to India regularly is that - as more financial institutions aggressively tap into the NRI market, the market becomes more competitive, and the cost will ultimately reduce further. In fact, for some remittance corridors like USD to INR, CAD to INR, and GBP to INR, the cost of sending money is the lowest.
Financial institutions are moving beyond just money transfers and offering homes loans for real estate purchases, investment opportunities tailored for NRIs, and medical insurances for parents traveling to visit their children.
The Indian government has also laid out policy frameworks to make it easier, cheaper, and quicker. If the Indian diaspora abroad responds well to these incentives, we can expect the number of remittances to India to flourish in the coming years.
For many immigrants or individuals supporting their families in the Philippines, understanding the fluctuations in USD to PHP exchange rates is very tricky. Navigating the intricacies of these rates involves examining a spectrum of economic, political, and social factors.CompareRemit is here to make life easier for you, so you can make the best decision with little to no hassle on your part. In this guide, we'll unravel the complexities surrounding USD to PHP exchange rates, providing valuable insights to empower you in making informed decisions for your money transfers.Interest Rates: The Currency Tug-of-WarOne of the primary factors that influence exchange rates is interest rates. When the U.S. Federal Reserve adjusts interest rates, it sends ripples through the currency market. Generally, higher interest rates attract foreign investment, strengthening the USD against the PHP. For individuals, keeping an eye on interest rate differentials between the U.S. and the Philippines can offer insights into potential shifts in exchange rates.Inflation: The Balancing ActInflation, the rise in the price of goods and services, plays a pivotal role in currency valuation. Countries experiencing lower inflation rates often witness an appreciation in their currency. Comparing inflation rates between the U.S. and the Philippines allows you to gauge the potential strength of the USD. A lower inflation rate in the U.S. compared to the Philippines may contribute to a stronger USD.Government Policies: Shaping Economic StabilityGovernment decisions and economic policies, both domestic and international, have large impacts on exchange rates. Policies promoting economic stability, prudent fiscal management, and sound monetary measures contribute to a stronger currency. Staying informed about the policies of both the U.S. and the Philippines will allow you to gain an understanding of the economic health and help predict dips and rises in exchange rates. Trade Balances: A Global PerspectiveThe dynamics of global trade, including exports and imports, definitely impact currency values. A country with a trade surplus, exporting more than it imports, may see a stronger currency. It might be very tedious to stay up to date with trade imbalances between the U.S. and the Philippines, but doing so can serve as an indicator of potential exchange rate movements.Historical Data: Patterns and PredictionsAnalyzing historical USD to PHP exchange rate trends can reveal patterns and provide insights. While past performance doesn't guarantee future results, understanding how rates responded to similar economic, political, or social events can guide your decisions. Historical data offers a valuable tool for predicting potential movements in exchange rates.Practical Tips for Informed Money TransfersStay Informed: Regularly follow financial news and updates from both the U.S. and the Philippines to understand the broader economic context. Regularly read our blogs to stay up to date with all the major money transfer news. Utilize Reliable Tools: Use CompareRemit’s online comparison tool and email alerts to track real-time exchange rates, ensuring you get the best value for your money transfers.Seek Professional Advice: Consulting financial experts or using professional services can provide personalized insights tailored to your specific situation, enhancing your decision-making process.In conclusion, comprehending the factors influencing USD to PHP exchange rates empowers you to make informed decisions when sending money to the Philippines. By staying attuned to economic indicators, leveraging historical data, and adopting a proactive approach, you optimize your money transfers, securing a more stable financial future for your loved ones.
There are a variety of reasons to send money from Europe to India. To start with, Europe is home to many Indians - working professionals earning a living, students and researchers pursuing higher education, and entrepreneurs and investors running businesses. In this blog, we will discuss the best ways to send money from Europe to India and India is one of the fastest-growing economies and has been the top remittance-receiving country in the world for years in a row. Indians working in European countries send money to India for various reasons such as: Financial support for friends and family back home,Monetary gifts during festivities,Education and healthcare needs, andInvestment purposes in India.Non-Indian residents (NRI) frequently transfer money to India to save their foreign income in an Indian bank account. In addition, India and the European countries are important trading and tourism partners. Owing to the flow of trade and people between the two countries, there is a lot of EUR to INR or INR to EUR currency exchange. The trouble with sending money internationally is that it comes with certain costs. The two main costs are:Transfer fees, andHidden exchange rate margins. Banks may be your first option, but they usually are not the best for international money transfers because of the poor exchange rates and hidden fees, meaning your recipients get less money in their pockets. The good news there is plenty of authorized money transfer specialist offering online money transfer to India with transparent and low fees, competitive exchange rates, faster delivery, and enhanced convenience for efficient and cost-effective transfers. Compare these money transfer services to get the best Euro to Rupees rate before making your transfer and finding the best money transfer service to India. How To Send Money From Europe To IndiaCompare money transfer services in terms of fees, exchange rates, and speed.Choose the best provider that meets your transfer needs.Sign up with the provider of your choice.Add the necessary information (Transfer amount, recipient details, your details, etc.)Press Send and leave the rest to the service provider Several providers offer direct transfer to major Indian banks (SBI, ICICI, HDFC, etc.)To help you find the cheapest, fastest, simplest, and most secure ways to send money to India from Europe, we have listed below top money transfer specialists. XE XE money transfer is a Canada-based online international foreign exchange business, and it is a part of the Euronet Worldwide Group, one of the largest money transfer businesses. It offers fast and cost-effective international money transfers to more than 130 countries in more than 60 currencies for individuals and businesses.XE offers free tools to check live currency rates, view historical charges for any currency pair, and set alerts for any chosen currency pair. Convert Euro to INR with XE Currency Converter.XE also provides forward contracts, spot contracts, market orders, business transactions for international employees, and currency data APIs.XE is great for large bank-to-bank transfers because XE offers lower exchange rate margins for large transfers. There are no fees for transfers above $500.You can initiate wire transfers to India from Europe on the XE website or mobile app and pay with a bank transfer or debit/credit card. Most of the transfers are completed in a few minutes. The transfer amount is unlimited. PassToPassTo is a cheap and quick way to send money to over 60 countries worldwide from the UK. They offer an easy-to-use, secure platform that only takes a few minutes to download and sign-up for. Some of PassTo’s benefits include:Discounted welcome rates for first-time usersBest foreign exchange ratesMoney can arrive as quickly as a few minutesFCA regulated and safe to useTransparent, up-front feesSend money from the UK with PassTo today!Remitly Remitly operates in 17 countries and transfers money to over 90 countries, including India. It is an online-based money transfer company located in Seattle. You sign up online on the site or Remitly app to start sending money. For sending Euro to Indian Rupees, the promotional exchange rate applies to your first transfer of Euro 1000.00. Remitly offers multiple receive options: recipients' bank accounts, UPI (virtual payments), and 100,000+ cash-up locations in India. If you don't mind paying a higher fee for a faster transfer, Remitly offers the Express mode of transfer. The economy mode of the transfer costs less, but it is slower. Skrill Skrill is a London-based digital wallet platform, currently enabling international money transfer to over 180 countries in 40 different to a bank account, mobile wallet, email address, and phone number. You can also buy and sell cryptocurrencies. Skrill is the cheapest option for sending to a bank account overseas because of zero transfer fees. You are allowed to fund your transfer with a credit or debit card, bank transfer, or other local payments if applicable. If funded by manual bank transfer, the money arrives in 2 hours or less. You can cashback when you refer friends. Sign up for free on the Skrill website or the Skrill App to send money to an Indian bank account for free.WiseWise, an online money transfer service provider, offers transparent and low-fees international money transfers from 59 countries to over 80 countries. You can hold 50+ currencies in your account and convert between currencies at a super-low fee. Based in London, it now has 12 million users and counting. It claims itself as 8X cheaper than leading banks in the UK. You get transparent fees and real exchange rates (the ones sourced from Reuters or Google). If you pay your transfer with a bank account, the fees are the cheapest, but you will have to compromise on speed. Payment via debit or credit cards transfers your money faster at a higher cost. Wise is ideal for small transfers as the cost gets higher with larger transfers. Send money on their website or download the Wise app to start sending money today.ICICI ICICI Money2India offer fast fund transfer from Europe to any bank account in India. Available in 20 Eurozone countries, the service allows you to lock your desired exchange rates and charges minimal fees with no hidden costs. Money2India Europe is an online money transfer service by ICICI Bank Germany. ICICI is one of India's largest banks and has many branches overseas. You can also sign up on the Money2India app and send money hassle-free. If you transfer money to ICICI bank accounts in India, the transfer is completed in under 30 minutes.InstaremSimilar to Wise, Instarem offers real exchange rates sourced from Reuters for your every transfer. Based in Singapore, Instarem is an online remittance service enabling money transfers to 55+ countries in partnership with 8000+ banks worldwide.Instarem is one of the low-cost international money transfer service providers, especially for small transfers. The fees are upfront, and there are no hidden charges. The exchange rates are very competitive. You earn InstaPoints with every transfer that allows you to redeem in your next transfer, saving you money.Sign up for a free account on the Instarem site or app with your email, or use your Google or Facebook ID for a quick registration.PandaRemitPandaRemit is a Hong Kong-based online money transfer service providing fast and convenient remittance services across 30+ countries. You also get zero fees on your first transfer. And receive money with minutes as fast as 2 minutes. Your recipient has the option to receive the money in a digital wallet or bank card or opt for cash pick up if available.Transfer funded by bank transfer carries no charges, but payment with a credit card has additional charges. There are no hidden charges with PandaRemit. Make use of referral bonuses and discounts to save money on transfer costs.Paysend Trusted by 6 million customers worldwide, Paysend currently operates in more than 150 countries allowing international money transfers to over 110 countries. Paysend is the first Fintech company to introduce global card to card transfers connecting 12 billion cards issued by Mastercard, Visa, China Union Pay, and local card schemes.Paysend provides 40+ payment methods for online SMEs and serves 17,000 SMEs. Sending money to India from Europe is easy because of the multiple receiving options: send money online directly to bank cards, UPI, or bank accounts in India at a fixed low fee. You can also send a Paysend link to your recipient's mobile number to make a transfer. Transfers are usually completed within minutes. Sign up online or get the Paysend app to send Euros to Indian Rupees.Revolut Revolut is a popular British digital-only bank/ neobank offering a range of banking services in a mobile app. Revolut, the global financial super-app, has more than 18 million customers around the world.With Revolut, you can send money in more than 30 currencies to 100+ countries. You can hold 30 different currencies for free in your Reovlut account. This makes it ideal for traveling abroad and sending international payments.Revolut charges a fixed percentage fee and claims to offer the exchange rates you see on Google for international money transfers. To send money to India, download the Revolut app and sign up. Then simply add money into your account using your card or make a bank transfer. Choose your transfer amount, your currency, and the destination country. Send money to your recipient bank account in India by adding it as a beneficiary in the Revolut app.ConclusionThe best website to transfer money to India from Europe or apps will depend on how much money you are sending, how are you paying for it, how the money is received, how fast you want the money to reach your desired destination, and how expensive is the transfer cost including conversion cost of Euro to INR. Different money transfer service providers have unique advantages that may be best suited for your transfer situations. So, it is best to compare, decide and send.
How do you pay your employees? As an employer, paying your employees is an important part of your business. Direct deposit to your employee's bank account or issuing paper checks are two of the most common ways of compensating them. Gone are the days when employees used to get paid in cash.But what happens when some employees have no bank accounts? This is where paycards come in. Paycards for employees are an alternative option when the employees do not own a bank account, and the employers do not want to pay in hard cash.It is estimated that about 5.4% of U.S. households (approximately 7.1 million) were "unbanked" in 2019, according to the U.S. Federal Deposit Insurance Corporation (FDCI). An unbanked household means no one in the household had a checking or savings account at a bank or a credit union.For small businesses with employees with no bank accounts, paycards can be a convenient option as a payment option.Direct deposit and paycards both offer the benefit of a paperless payroll distribution process and allow the employer to electronically transfer funds conveniently. While direct deposit is the norm for many businesses, paycards are gaining popularity each year.There are pros and cons of using paycards, and in this blog, we will discuss if paycards are right for your business and employees.What is a Paycard?Paycard is a lot like a prepaid debit card as it is made of plastic and can be pre-loaded. In the case of a paycard, the money loaded comes from the employer in the form of an employee's pay. The card carries the issuer name such as MasterCard, Visa, or Discover.Are Paycards Good, and Who is it For?A pay card can be used to pay an employee who does not have a bank account. Paycard holders or employees can cash out from paycards at a bank, ATM, or other point-of-service locations.Employees can also pay bills over the phone using their paycard number or authorize electronic bill payments to specified companies.Employees can use paycards at any merchant, grocery store, retail shop, or gas station that accepts debit cards.Do Paycards Have Fees?By law, employees must be able to access their wages in full without any fees. They can obtain the cash at a bank teller, ATMs associated with the card issuer, pay bills by telephone, or use the card for point-of-sale purchases.However, there may be fees for electronic fund transfers or for cash withdrawals at ATMs that are not in the issuer's network. There may be fees for card replacements, balance inquiries, inactivity fees, or other reasons. The Consumer Financial Protection Bureau issued a rule in April 2019 that paycard issuers must disclose all the fees to cardholders.Employees must be informed of the potential fees. The paycard issuer is required to give you disclosures on such fees before you sign up for a paycard or a payroll card.Also, paycards are regulated by state laws, so you might have to check for additional details depending on your state. Some states are making efforts to reduce fees that affect employees.As you can see, paycards fees mostly affect employees. In the case of direct deposits, employers are the ones who have to pay fees for setting up the payroll distribution system and a transaction fee for each time they transfer wages into an employee's account. The payroll software may also charge a fee for their service.Can Employers Save Money When Using Paycards?Since paycards are reloadable cards, employers can have the banks reload the paycards with their employees' wages for the pay period, avoiding the costs and hassle of issuing paper checks, mailing them, or re-issuing lost checks. The savings may not be a substantial amount but they can add up gradually.Can Employers Choose between Direct Deposit and Paycards?While there is no mandate that employers can only offer either direct deposit or paycards to their employees for their wages, it is safe to check with your state's law on payroll distribution.One-third of states allow employers to require employees to have bank accounts for direct deposit. In such a case, paycards may not be needed. Also, there is no law preventing employees with bank accounts to opt for paycards as their payment option.Though generally, employees tend to prefer direct deposit because of its efficiency and the least costly method of payment, as a business owner or an employer, it is better to give options instead of imposing only one method.Ask your employees about their preferred method of payment and what benefits (convenience, low fees, etc.) serve them the best.In fact, Federal law requires employers to offer alternative payment methods like paper checks or direct deposits.Should Employer Provide Pay Stub?Pay stub provides details of the employees' pay for each pay period. Employers are not required by federal law to give employees their pay stubs. However, many states have laws that require some form of written pay statement.Even if your state doesn't need you to provide pay stubs, you are still required by the Fair Labour Standards Act to keep track of your employees' working hours.For employees, a pay stub gives a record of their wages, deductions, contributions, and other information. It is also proof of income or employment, which is often needed when applying for a loan, credit card, or housing.For employers, a pay stub is useful for tax purposes, and it can be used to resolve any discrepancies with employee pay.Is it Possible for Paycards to be Overdrafted?Usually, paycards works like debit card, allowing cardholders to withdraw up to the limit of the loaded amount. However, there are paycard that allows overdraft for employees. But it can come with hefty overdraft fees if employees use funds over the limit in their account. Usually, you should be able to prevent misuse by subscribing to an overdraft protection service.Will Paycard Affect Credit Score?Paycards, like all prepaid cards, do not affect an employee's credit score.What is a Paycard Gets Lost or Stolen?A replacement card can be issued in such cases. The employee needs to notify the employer, and then the employer should immediately notify the card issuer. The employee is not liable for the incident as long as the issue is timely reported. Paycards come with similar protection as that of a prepaid card.The reporting time is determined by the card issuer. If you wait longer to report after learning of the loss and theft, the fraudulent charges may increase. You may have to pay a fee for the replacement card.Pros and Cons of PaycardsProsA win-win situation for unbanked employees and their employers.Green alternative to paper checks.Immediate payment to employees.No hassle of cashing a paycheck.No monthly or maintenance fees.Added security when assessing their funds (paycards require a PIN).Employees can report to the issuer if funds are used unauthorized.Paycards can be reloaded during each payday, saving money on issuing paper checks.Added efficiency for the employer as the employer would not have to physically present or mail paychecks to unbanked employees.ConsEmployees may incur fees for several reasons. Be aware of such potential fees.Employers have certain responsibilities to educate employees about the usage of paycards.Limited range of services and flexibility in managing your funds compared to bank accounts and other prepaid cards.The best paycards programs are easy to set up, have lower fees, quick access to funds, and provide a range of benefits such as cashback and discounts. We have made a list of popular paycards providers for businesses:Wisely Paycard by ADPOnline portal and mobile appCompatible with Apple Pay, Samsung Pay, and Google PayZero cost sign upNo hidden feesNo credit checkNo overdraft feeZero cost direct deposit of pay and other sources of income (including government benefits)Accepted wherever Visa is acceptedKeep track of spending and account balances 24/7 on the appGet cash back at major retailersSurcharge-free ATM withdrawalsFDIC insuredSecurity features include instant card lock, purchase protection, and travel alert notificationsRapid PaycardDirect Deposit onto rapid paycardLoad funds from approved checks with Ingo Money mobile appsNo fee for cashing paycheck24/7 account access with rapid! Access mobile appNo credit checkCan be used at ATMs, merchants worldwide, wherever Debit Mastercard or Visa debit cards are acceptedPay bills and make purchasesBook airline and hotel reservations onlineEarn interest on savings accountGet cash back rewardsFDIC insuredMoney protected with Zero Fraud LiabilityKittrell PaycardNo fees to use (there are fees for certain situations)Fee-free ATM network with MoneyPassWebsite and Kittreall AppGet real-time alerts and push notificationsCash back at point-of-sale terminals2-way texting to manage your card and accountCompatible with Apple Wallet, Google Pay, Samsung PayEasy portability (Get direct deposit of stimulus checks, tax refund, benefits)Freeze or unfreeze card on-demandSkylight PaycardZero sign up feeNo credit checkNo minimum balance Personalized your card with a family photo or unique imageManage money anywhere on Mobile AppDirect deposit your government benefits, tax refundsUse anywhere where Visa Debit & Debit Mastercard are acceptedFDIC insuredZero liability protectionPay bills onlineEarn interest on savings accountEarn cash back with Payback RewardsSend money to or receive money from friends and family with Netspend cardsSet text alerts about transactionsRefer a friend and boost your card balanceSkylight overdraft limit is $100 & 3 times/ monthConclusionOverall, paycards can be convenient and cost-effective for employees and employees when compared to paychecks or for those employees with no bank account. And the paycard fees are becoming more transparent and competitive.While paycards can be challenging at times, especially when you are employed in multiple jobs and have a separate paycard with each employer, your funds are scattered in multiple cards so it becomes difficult to manage your finances. Some may prefer to put all their money in one place, like a checking account.However, if you can't open a bank account, a paycard is a great option to get paid. Read the fine prints before signing up for a paycard and know the potential fees that come with it.