Supporting Loved Ones Long-Distance: The Challenges of Sending Money Back Home

published on 08 January 2021

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Fleri 12.17.20

Today there are an estimated 232 million international migrants living around the world seeking to earn a higher wage than what's available in their home country. Of these 232 million migrants, upwards of 180 million are not just seeking to create a better life for themselves, but are also working to support their friends and families from a distance by sending money back home.

This selfless act provides foundational support for friends and family, but also brings about some unforeseen challenges. Whether it’s through the associated fees with sending the money, or losing track of who the money is going to, there are many challenges associated with this process of sending money back home.

Fees When Sending Money

If you, like many others are sending money to loved ones back home through wire transfers services like Western Union, you are probably very familiar with the associated fees. Per Western Union’s website, transfer fees can total around 10% of the principal amount being sent! Maybe a 10% fee here and there might not be much of a worry, but if you are sending money back home on a consistent basis, this can quickly end up costing you a lot of money in the long run!

Dedicated remittance services also charge fees. These services typically promote sign-up offers where the first few transfers don't require a fee, but extended use will result in a consistent fee on top of the principal amount of money being transferred. Take for example Ria, a popular online money transfer service. This service often tacks on 3-5% in fees when transferring money depending on the destination. Ria’s fee calculator gives a breakdown of their cost in sending money. WorldRemit also charges fees, but gives new clients three free transfers through the use of a promo code.

Tips For Minimizing Those Fees:

  • Check out multiple money transfer services to look for the lowest fees possible. Some money-transfer services will give discounts or lower fees for long term customers.

  • Consider sending bigger bulk payments rather than smaller more frequent transfers if the fees are transfer based

Where is Your Money Going?

Another common challenge that migrants face when sending money back home is losing track of where the money is going. Oftentimes migrants are sending money back home with the intention to pay for healthcare insurance, medical bills, medicine and other necessities of their loved ones. Supported by research provided by Susanne Bleiber Seperson, Ph.D, unfortunately in many cases, the sender comes to find out that the money was not spent on the intended critical necessities at all.  This can be a cause for great concern. In these scenarios the family members who need care are not getting it and the money is being spent by themselves or other family members on non-critical goods or services. This often means that the family member sending the money back home has to send more money just to ensure that the intended good or services is paid for!

How To Move Forward

One of the root challenges here is that once you’ve sent money, you really don’t know what good or service that money is going once it's received. If the intention of sending money is to pay for a specific service such as healthcare, medical bills or other important critical services, it's probably best to look for a way to pay for that good or service directly. What many individuals don’t realize is that there are services today that allow that individual to pay for such services and connect recipients with the good or service. A good example here would be Xoom, a PayPal service that allows individuals to pay bills for family members in another country. Whether it's healthcare services, or other critical benefits, you do have options when it comes to supporting your family from a distance. 

By using these dedicated services, you can ensure that you are protecting yourself from paying unnecessary fees, and protecting your loved ones. 

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