The Ultimate Glossary of Terms About Digital Money Transfer

 THE ULTIMATE GLOSSARY OF TERMS ABOUT DIGITAL MONEY TRANSFER


It is pretty normal not to be aware of certain terms involved in activities done as a routine. This rule rather squarely applies to global money transfers that the expatriates undertake in their countries of residence to support their families back home financially or for other reasons, including payment for online shopping, etc.

Where such practices continue smoothly without you knowing the technical terms deeply, it is necessary to know them in theory, at least, lest someone deceives you by tricking you into procedural technicalities.

This article will provide sufficient information about the glossary of terms used in digital money transfers worldwide.


A brief background about why technical understanding terms concerning remittance transfers are important

As mentioned above, it does not make a big difference if you are unaware of the terms involved in the process, but there still are a few chances to be tricked by unscrupulous elements in the business through these terms.

An example below will suffice to make the point.

As an expatriate belonging to the 230-million-strong global expatriate community, you are most definitely aware of the term ‘currency exchange rates.’ This term is widely used in every single fund’s transfer across borders, and there is no confusion in understanding it.

But how about the term ‘live currency exchange rate?’

Does it not sound confusing?

It is a little more confusing than the simple term preceding it. While all these terms will be explained in detail below, it is one of the most important reasons why understanding and knowing the technical terms involved in the process is necessary.

Before proceeding with the terms in detail, it is imperative to look at the global expatriate community and the volume of global remittances.

It is important to know the statistics about expatriates and remittances to understand how complex the situation could be if a large swath of global expatriates were unaware of these terms and were tricked and duped by the fraudulent elements in this particular market.


Expatriate community worldwide and volume of global remittances – current and projected

  • A UTE’s International Lounge report said that the number of expatriates worldwide is around 230 million, up from 73 million in 1960.

  • They make up about 3.1% of the total global population.

  • Around 49% of global expatriates are women.

  • Global remittances are projected to reach $774 billion by the end of 2022, with a year-over-year (YoY) growth rate of 5.9%, a report by Insider Intelligence revealed.

  • The same report said that global remittances are likely to reach $810.79 billion with a growth rate of 4.7% by the end of 2023.

Many of these expatriates reside in other countries to earn a better living than they can in their native countries and support their families through online money transfer(s).


What terms must I know in digital money transfers?

The following terms are largely used in the process, which you should be aware of.

Automated Clearing House (ACH)

It is a centralized clearing system used in the international banking network.

Access point

It is a physical location where recipients can collect remittances sent to them. It can be a bank branch, post office, mobile network agent, etc.

Agent

It is an entity that distributes remittances on behalf of the Remittance Service Provider (RSP).

Anti-Money Laundering or Combating the Financing of Terrorism (AML/CFT) rules and regulations

It is the set of policies to detect, prevent or reduce money laundering and financing of terrorism.

Migrant worker

A person who earns a living in a country of which he is not a national.

Beneficiary

Someone who is eligible to collect the remittances or someone to whom the amount is directly sent.

Electronic Funds Transfer (EFT)

Transfer of money digitally or through electronic payment systems.

Exchange rates

It is the rate at which you can buy one unit of the other currency.

Live currency exchange rates

Given that the exchange rates keep fluctuating in the international market, many service providers link the rates with the international market so that the remitter can initiate a transaction at a time when the rates are most favorable. This is called live currency exchange rates. They are not static like in the banks.

Fee or service charges

An amount of money charged by the service provider, mostly proportionate to a small percentage of remittances being transferred.

International Bank Account Number (IBAN)

It is an account number containing unique account information in a standardized format unique and different to every bank.

Interbank transfer

A transfer of funds from one account to another account in a different bank.

Intra bank transfer

A transfer of funds from one account to another in the same bank is also known as the same bank transfer.

Minimum/maximum limits

Limits above and below which a transaction is disallowed.

Payee

The one receiving the money or funds.

Payer

The one sending the funds or money.

Personal Identification Number (PIN)

A password that is specifically used for financial systems.

Reference number

An alphanumeric or numeric unique identifier to track a transaction.

Remittance

Money is sent back home by someone who is working in a foreign country.

Society of Worldwide Interbank Financial Telecommunication (SWIFT)

A cooperative organization promoting the standardization of financial transactions.

Transfer app

Several online money transfer companies have launched these apps through which you can initiate a transaction on your smartphone.

Wire transfer

Funds are transferred via the SWIFT network between banks.

Knowing these terms will help you find a service provider that serves you well.


Money transfers with ACE Money transfers are uniquely rewarding

In sending money to your family with ACE Money Transfer, you will get speed, safety, live and competitive currency exchange rates, and 24/7 service access in over 100 countries with over 350,000 pickup locations for a low fee from one window.


  • Global expatriates 

(Expat Population Worldwide – Ute's International Lounge (utesinternationallounge.com)

  • Global remittances

(Global Remittances Forecast 2022 - Insider Intelligence Trends, Forecasts & Statistics)


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