Remittance
A remittance is money sent across borders by an individual, usually a migrant worker, to family or others in another country. In EU payments law, money remittance is also a payment service in which a provider receives funds to transfer them without opening accounts for the payer or payee.
How it works
Remittances are large. The World Bank put officially recorded remittances to low- and middle-income countries at $685 billion in 2024, more than foreign direct investment and official development assistance combined. The top five recipients were India ($129 billion), Mexico ($68 billion), China ($48 billion), the Philippines ($40 billion) and Pakistan ($33 billion).
Cost is tracked against targets. The UN Sustainable Development Goals, which the G20 has endorsed, aim by 2030 to cut remittance costs to less than 3% and to eliminate corridors costing more than 5%. The World Bank's global average for sending $200 was 6.36% in Q3 2025, down from 9.67% in Q1 2009. Sub-Saharan Africa remained the most expensive region to send to, at 8.46%, while digital services averaged 4.59%.
Rules define the service. PSD2 defines money remittance as a payment service where funds are received from a payer, without payment accounts being created for payer or payee, for the sole purpose of transferring a corresponding amount to a payee. In the US, Regulation E covers remittance transfers for consumers: providers must disclose the exchange rate and fees, and senders can cancel within 30 minutes of paying, with a refund within three business days.
Example
A worker in the UK sends £300 home to Kenya. The provider charges a £2.50 fee and an FX margin of 1.2%, which is £3.60. The total cost is £6.10, or 2.03% of the amount sent, below the 3% SDG target.
Frequently asked questions
How do recipients receive remittances?
Into bank accounts, into mobile wallets or as cash pickup. The World Bank tracks each, and transfers sent to a mobile wallet cost 3.92% on average in Q3 2025.
Does every country regulate remittances the same way?
No. The EU treats money remittance as a payment service under PSD2, and the US regulates providers through state licensing and federal rules. In Nigeria, the central bank licenses international money transfer operators (IMTOs); in Ghana, licensed payment service providers deliver inward remittances in partnership with foreign money transfer operators under Bank of Ghana guidelines.
Where Polynopsis fits
Polynopsis is liquidity software for remittance companies: one live position across banks, payout partners and wallets, with a warning before a corridor runs dry.
Related terms
Sources
- In 2024, remittance flows to low- and middle-income countries are expected to reach $685 billion, larger than FDI and ODA combined · World Bank
- Remittance Prices Worldwide, Issue 54, September 2025 · World Bank
- Directive (EU) 2015/2366 on payment services in the internal market (PSD2) · EUR-Lex, Publications Office of the European Union
- 12 CFR 1005.30, Remittance transfer definitions · Electronic Code of Federal Regulations
- 12 CFR 1005.31, Disclosures (Regulation E, remittance transfers) · Electronic Code of Federal Regulations
- 12 CFR 1005.34, Procedures for cancellation and refund of remittance transfers · Electronic Code of Federal Regulations
Know where all your money is.
Polynopsis gives cross-border payment teams one live position across every bank, payout partner, exchange and wallet, including money in flight, and warns before a corridor runs dry.
About Polynopsis
Polynopsis is liquidity management software for cross-border payment companies. The name joins poly, many, and synopsis, a seeing together: one live view of money spread across many banks, payout partners, exchanges and stablecoin wallets, including money in flight, with a warning before any corridor runs dry.
Why it is called Polynopsis · About Polynopsis · Glossary · Corridor runway calculator