Getting to Know International Remittance

Have you ever heard the term international remittance? In Indonesia, who do you think uses it the most? It's none other than the Indonesian Workers who especially make a living abroad and send money to their families at home. 

Those migrant workers carry out the so-called inward remittance, making them entitled as the "foreign exchange heroes." Indeed, remittance has become one of the country's strengths in the form of foreign exchange contributions. 

But what is it?

People Also Read: 7 Things To Do In Jakarta During The Day And At Night

About International Remittance

Photo by Pexels

Remittance is a transfer service organized by banks or other financial service providers that aims to send money through foreign exchange or overseas forex. In short, international remittance is the process of special money transfer services from one country to another.

Why is it special? 

The system is different from other common domestic fund transfers via banks.

Who usually does or makes international remittance?

In addition to individuals (foreign workers, parents, etc.), companies (businesses) and governments can make or do it for suppliers, foreign aid payments, and more.

Who can provide international remittance services?

You can usually use the following three channels with the license to send your money abroad from Indonesia.

• Banks – both national and private ones.
• Money transfer service providers – for example, Western Union. 
• The Post Office – in Indonesia is PT Pos Indonesia.

What is more? Nowadays, you can turn to some promising and trusted applications, like PayPal, Flip, Topremit, Moneygram, and more.

How long does it take?

The process will highly depend on everything or the sender's provisions, ranging from the destination country to the transfer method. 

The period for sending and receiving money may start from real-time online (received instantly), same-day process, or up to D+3 from when you make the transaction. It will 

2 Types of International Remittance

You will find two types of international remittance, namely outward and inward remittance, which closely relate to the location of the fund recipient. 

Outward Remittance or Outgoing Remittance

It refers to secure money transfers from an individual or entity from a home country to others overseas (foreign countries).

Examples are parents who send money to their son or daughter pursuing their studies abroad or expatriates sending money to their families in their home countries. 

Inward Remittance or Incoming Remittance

This second type of international remittance occurs when an individual or entity living in a certain country receives money from individuals or entities in other countries. 

A prominent example of this is a family in Indonesia receiving money transfers from a family member or relative who works in another country. 

How Does International Remittance Work?

Need to make international remittances soon? Let's understand first how it works.

First, you can choose or come to the above three channels – bank, financial transfer service providers, or post office – and applications. 

• A note: you can still do international remittances even though you’re not a bank customer.

The next step is filling out the form. Follow the instructions given by the bank officer carefully. Also, you need to know some identity data like the recipient's name, bank account, etc.

Double-check your transaction details, such as the amount you wish to transfer, the recipient's complete data, etc. 

• If you are a bank customer, they will debit the transfer nominal from your foreign currency account. 
• If you aren’t a customer, the bank will first convert your money to the destination currency under the current rate. 

After that, the bank will process your international remittance request. The flow will go first from a correspondent bank (as a liaison who cooperates with the beneficiary’s bank).

Finally, the beneficiary bank will receive the money you send and then forward it to the recipient (the one you want to send money to). Accordingly, the money transfer can be cash or balance in the recipient's bank account.

People Also Read: E-Wallet In Indonesia: What To Choose And How To Use

As mentioned earlier, you can do international remittance far more easily using your smartphone. Yes, you can use an application like Flip with its Flip Globe. One of Indonesia's most used fintech-based payment platforms, you can expect the most competitive exchange rate and no additional hidden fees. More importantly, it allows you to send money to over 55 countries around the globe faster and more secure.