Remittance is funds transferred by a migrant to their country of origin for savings, family wellness and other non-investment reasons. According to financial experts remittance play crucial role in development of developing countries as it could drive the value of currency up. Funds remitted are generally spent on purchases, these purchases help boost the economy.
Payout option is mode of payment to recipient of the remitted fund. Some of the payout options available in market are, direct deposit to bank account, cash payment and mobile wallet.
Remittance companies primarily make money by charging fees to sender. Fees being charged depend on countries involved in transfer, mode of payment and transfer amount. These fees can be as low as $2 to a staggering $700. Remittance companies also make money on spread between buying and selling price. As with any commodity, buying low and selling high brings the profit. To make money when no fee is charged remittance companies buy currency for slightly less than market price and sell it at market price or higher.