As a result, financial intelligence services are concerned that transfers are one way to launder money or promote violent activities such as terrorism. Remittances are playing an increasingly important role in the economies of small and developing countries. They are also seen as an important component of disaster assistance and often exceed official development assistance (ODA). Remittances are often used as a means of improving the standard of living of people abroad and contributing to the fight against global poverty. Since the late 1990s, transfers have exceeded development aid and in some cases account for a significant share of a country`s gross domestic product (GDP). Money transfers are transfers of funds made by individuals to another party. They can be made to fulfill an obligation such as an invoice payment or an invoice when someone buys online. But they are most often transformed by one person in one country to someone in another. Most remittances are made by foreign workers to families in their home countries. These may also be payments made to a company. The most common method of transfer is the use of an electronic payment system through a bank or money transfer service such as Western Union. People who use these options are usually charged a fee, but transfers can only take ten minutes to reach the recipient.
According to the World Bank`s 2019 Migration and Development Letter, $529 billion in remittances were transferred in 2018 to low- and middle-income countries, up 9.6% from a record $483 billion in 2017. This figure is significantly higher than the $344 billion in foreign direct investment in these countries, excluding China, in 2018. If we also include high-income countries, the total amount of remittances will increase to $689 billion from $633 billion in 2017. You must sign a transfer agreement with the Bank when setting up electronic payments. You can create more than one transfer agreement if you have an agreement with two or more banks. For each agreement, you must indicate one or more accounts from which payment must be made. For each account, you need to create a transfer account. For more information, see Create Transfer Accounts. Many authorities are also concerned about the high cost of transfers. Sending small amounts is often expensive. To promote transparency, some countries limit transfers to bank transfers, but banks are the most expensive transfer channel, according to the World Bank.