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Key takeaways:
If you send money from Canada to another country, you've likely heard about remittances. You may have used this type of international money transfer if you've sent money to your friends or family.
There are different ways to send money internationally, and finding the right method for you can be confusing. Read on for all of the remittance advice you need to be confident in how you send money back home.
A remittance is the transfer of money to someone else, usually in a different country. “To remit" literally means “to send back," which is why the term is often used to refer to when someone sends money to people in their home country.
People who send money to family members or friends outside of Canada — like overseas or migrant workers, international students, or expatriates — use remittances to help with expenses, tuition fees and services, and for sending gifts to loved ones on special occasions.
Sending international remittances is very common. For many people, being able to help support their family might be one of the main reasons why they're living or working in Canada.
If you're working away from your family and community to help out, you'll want a secure, flexible, and fast way to get those funds home. That's where remittances come in.
You can use both international bank transfers and remittances to send money internationally, but they're not the same.
The most important difference is that international transfers move money between bank accounts. This means that both the sender and receiver must have an account. Also, you'll need to know the details of the receiver's account, like SWIFT codes to set up an international bank transfer.
An international remittance offers a bit more flexibility. You can transfer funds to a bank account, an account in an app or to a person to pick up the money. The person receiving the money will need to have things like a valid ID, phone number and address to get the funds and the money arrives almost immediately.
You can send a remittance from bank account to bank account, to an app, to a payment card or in-person pickup. The type of money transfer service you choose will depend on what's most convenient for you and your loved one. Another thing to consider is whether you need a service that allows for cash pick-ups.
When choosing a service, you many need answers to the following questions:
- How long will the transfer of funds take? Bank transfers can take up to five days, while services like cash-pickup through Western Union can deliver money in as little as a few hours. Some money transfer apps claim to make the transfer immediately.
- What amount of money do you want to send? The amount you can send will be different from bank to bank and depend on the channel you use. In general, the daily limit is higher for bank transfers. Find out more about sending limits for Scotiabank International Money Transfers and Western Union through Scotia bank online.
- Where will the funds be picked up? If you send using a bank-to-bank method, the funds will appear directly in your family member's account. If you use a cash-pickup option available at Scotia through Western Union, they can pick up the funds at any of their hundreds of thousands of agent locations in over 200 countries.1
- Can the recipient get cash? If the receiver needs the funds in cash, you'll want to use a service like Western Union through Scotiabank.
- Does the service operate in the country you’re sending money to? Each service will have different set countries that you can send money to.
Here are some terms and concepts that you need to know about remittances.
- Inward vs. outward: There are two types of remittances, inward and outward. An inward remittance refers to when you are the one receiving funds, while an outward remittance is money going out, or money you send.
- Wire transfers: Wire transfers are a way to send money electronically. You can initiate one at your bank. They tend to be a more expensive option, and you'll need the recipient's account information.
- Digital bank-to-bank international transfers (IMT): International money transfers are similar to wire transfers, but you use a remittance service provider. When you send money with an international money transfer, your loved one receives the funds directly into their bank account. With Scotiabank International Money Transfers, you can send funds directly from your Scotia account. The transfer fees are waived if you have an Ultimate Package or are part of the Scotiabank StartRight® Program for newcomers (exchange rate, however, still applies).2
- Cash pickup: If the person you're sending money to doesn't have a bank account, choose an option that lets them pick up cash, like Western Union or a money transfer app.
- Money transfer apps: Money transfer apps let you transfer money from your bank account to your recipients wallets. Note that not all apps are available for use in all countries.
In general, sending money from one country to another can incur:
- Transfer fees — the bank charges these fees. Sometimes, the receiving bank also charges a transfer fee.
- Foreign exchange currency conversion fee — this is the fluctuating rate for buying or selling currencies.
The way that different services charge fees varies. Online transfer apps usually charge a flat fee plus a percentage of the amount sent. Remittance centres like Western Union charge different fees depending on the country you're sending to, payment method and whether the inward transfer will be picked up in cash. With banks, you'll pay different transfer fees depending on the service you use, and you may be charged as well by the recipient's bank. Foreign exchange fees vary between financial institutions, but you can check to see how they compare to the rates posted by the Bank of Canada.4
Bottom Line
Living or working away from family in a foreign country can be difficult. Sending home remittances shouldn't be. Stop in at a Scotiabank branch to speak with an advisor about the best way to send your support to your loved ones.
