What We Must Know About Remittance Centers and Their Charges
Sending your hard-earned money to the Philippines is an easy matter. Every year, OFW remittances keep the Philippine economy afloat and running. With the onset of several remittance centers here and overseas, the families of OFWs continue to receive and benefit from their earnings.
In spite of this, Philippine remittance centers are by no means equal. Each center has special packages that cater to the needs of OFWs. Although they are of great help, they differ in rates and services.
These are some of the things to remember about remittance centers and why they have different rates:
- Remittance centers should be operating legally. The operation of unrecognized remittance agents is one factor why there is a discrepancy in the charges among remittance centers. Also, illegal remittance agents expose OFWs to fraudulent transactions.
The proliferation of illegal remittance agents is partly caused by banks that charge too high for their services; however, banks have the ability to offer investment services that can help OFWs plan on the proper ways of spending or investing their money.
- Local banks have difficulty establishing their own remittance centers or branches overseas. This forced them to tie-up with banks abroad causing higher fees for transferring money.
- Informal channels with no bank affiliates are not regulated. These entities are competitive because of their speed, visibility among customers, and easy processing. Also, new technology is now taking over in terms of SMS, e-cards, and Internet-based remittances.
- Lack of access to banks in the host countries due to some restrictions. There are countries that do not encourage OFWs to open a bank account for remittances by imposing rigid regulations. This can be attributed to terrorist activities and money laundering schemes.
- Location is also a key factor. There are service providers that have many branches here and abroad. Sending money using these providers is easier, thus, the higher charges.
- Hidden costs or back-end charges are also important. There are remittance centers that charge different amounts per transaction. These charges may even vary from one branch to another.
- Transfer charge also influences the rate. Furthermore, the faster that the outlet or service provider can send the money, the more expensive the service is. This also affects the actual amount that your family receives. The exchange rate is fast and changes from minute to minute. You will never know if the dollar you are sending will still be equivalent to P50 or not.
- The amount of money that you are allowed to send is also a factor. There are outlets that limit the amount that the customer can send.
Numerous factors like location, transfer charges, the amount of money, the legality of the operation, and accessibility to banks are linked as to why service providers charge different rates. These are things to consider whenever OFWs send money to their families using remittance centers. They may want to send bigger amounts but these reasons greatly affect how much money our loved ones receive.
Before you send your money to the Philippines make sure to check as many remittance centers as possible to compare their rate. There are also a number of ways you can avoid those charges in sending money to the Philippines, you can find it by checking this article Exchange Rate: How to get the best value when sending money to the Philippines
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