Remittance Glossary
A comprehensive guide to international money transfer terminology. Understand the terms used by providers, banks, and regulators so you can make smarter transfer decisions.
ACH (Automated Clearing House)
An electronic funds transfer system used in the United States for processing bank-to-bank transactions. ACH transfers are commonly used by money transfer providers as a low-cost payment method, though they typically take 1-3 business days to clear. Many providers offer ACH as a free funding option.
AML (Anti-Money Laundering)
A set of laws, regulations, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income. All licensed money transfer providers must comply with AML regulations, which include monitoring transactions for suspicious activity and reporting large transfers to authorities.
API (Application Programming Interface)
A set of protocols that allows different software systems to communicate. In remittances, APIs can help platforms request current quote estimates and fees from provider feeds where available.
Compare current provider estimatesBank Transfer
A method of sending money directly from one bank account to another. In international remittances, bank transfers are the most common delivery method. They are generally secure and cost-effective, though they can take 1-5 business days depending on the corridor and provider.
Base Currency
The first currency in a currency pair. For example, in GBP/INR, GBP is the base currency. The exchange rate tells you how much of the quote currency (INR) you get for one unit of the base currency. When comparing remittance rates, you send the base currency and the recipient receives the quote currency.
See GBP to INR ratesBeneficiary
The person who receives the money in an international transfer. Also called the recipient. When setting up a transfer, you need to provide the beneficiary's full name, bank account details (or mobile wallet/cash pickup details), and sometimes their address.
Best Rate
The strongest loaded recipient outcome among providers that returned usable estimates for a specific corridor and amount. A provider checkout quote can still differ because of funding method, payout method, eligibility, and timing.
Compare current estimatesBIC (Bank Identifier Code)
An 8 or 11-character code that uniquely identifies a bank globally. BIC codes are the same as SWIFT codes and are required for international wire transfers. The code includes the bank code, country code, location code, and optionally a branch code.
Blockchain
A decentralized, distributed digital ledger technology. Some remittance providers use blockchain to enable faster, cheaper cross-border transfers by bypassing traditional correspondent banking networks. Providers like Wise and some crypto-based services leverage blockchain or similar technology for settlement.
BSB Number
A six-digit Bank-State-Branch number used in Australia to identify the bank and branch for domestic transfers. Required when sending money to Australian bank accounts. The first two digits identify the bank, the third identifies the state, and the last three identify the branch.
Cash Pickup
A delivery method where the recipient collects the transferred money in cash from a physical agent location. Popular in developing countries where many people lack bank accounts. Providers like Western Union and Remitly offer extensive cash pickup networks worldwide.
CLABE
A standardized 18-digit bank account number used in Mexico (Clave Bancaria Estandarizada). Required for sending money to Mexican bank accounts. It includes the bank code, branch code, account number, and a check digit.
Send money to MexicoCorrespondent Bank
An intermediary bank that processes international transfers on behalf of other banks. When you send a wire transfer, it may pass through one or more correspondent banks, each potentially charging a fee. This is why traditional wire transfers can be expensive compared to modern fintech alternatives.
Corridor
A specific route for sending money between two countries or currencies. For example, GBP to INR (UK to India) is a corridor. Different providers specialize in different corridors, so rates and fees vary. Popular corridors typically have more competition and better rates.
Browse all corridorsCryptocurrency
Digital currencies like Bitcoin and USDT that some people use for cross-border transfers. While crypto can offer fast, low-cost transfers, it involves exchange rate volatility and may not be regulated. Some remittance providers now integrate crypto as a payment or settlement option.
Currency Pair
Two currencies that are being exchanged in a transaction. Written as BASE/QUOTE (e.g., USD/INR). The exchange rate tells you how much of the quote currency equals one unit of the base currency. Each currency pair represents a specific remittance corridor.
Digital Wallet
An electronic account that stores funds and enables digital payments. In remittances, digital wallets like GCash (Philippines), M-Pesa (Kenya), and UPI apps (India) allow recipients to receive money directly to their phone without a traditional bank account.
Send to GCash in PhilippinesDirect Debit
A payment method where the money transfer provider pulls funds directly from your bank account. Often the cheapest funding option as it avoids card processing fees. Takes slightly longer than card payments (1-2 business days) but can save you significant fees on larger transfers.
Dollarization
When a country adopts the US dollar (or another foreign currency) as its official or de facto currency, either alongside or replacing its local currency. Countries like Ecuador and El Salvador are dollarized. This eliminates exchange rate risk for USD transfers to those countries.
Exchange Rate
The price at which one currency can be exchanged for another. In remittances, the exchange rate determines how much the recipient gets. Providers add a markup to the mid-market rate, so the rate you receive is typically less favorable than the interbank rate. Always compare exchange rates across providers.
Compare exchange ratesFintech
Short for financial technology. Fintech companies like Wise, Remitly, and WorldRemit use technology to offer faster, cheaper money transfers than traditional banks. They typically have lower overhead costs, which translates to better exchange rates and lower fees for customers.
See all fintech providersFlat Fee
A fixed charge per transfer regardless of the amount being sent. For example, a $5 flat fee costs the same whether you send $100 or $10,000. Flat fees are more cost-effective for larger transfers. Some providers combine flat fees with exchange rate markup.
Floating Rate
An exchange rate that is determined by market supply and demand and fluctuates continuously. Most major currencies (USD, GBP, EUR) have floating rates. This means remittance rates change throughout the day, and timing your transfer can affect how much the recipient receives.
Forex (Foreign Exchange)
The global marketplace for trading currencies. The forex market is the largest financial market in the world with over $7.5 trillion traded daily. Remittance exchange rates are derived from forex market rates, with providers adding their markup on top.
FX
An abbreviation for foreign exchange. FX rates refer to the exchange rates between different currencies. When providers advertise "great FX rates," they mean competitive exchange rates for converting one currency to another during your transfer.
IBAN (International Bank Account Number)
A standardized international numbering system for bank accounts, primarily used in Europe, the Middle East, and some African countries. An IBAN can be up to 34 characters long and includes the country code, check digits, and domestic account number. Required for SEPA and many international transfers.
IFSC Code
Indian Financial System Code - an 11-character alphanumeric code that uniquely identifies a bank branch in India. Required for all transfers to Indian bank accounts. The format is AAAA0XXXXXX where the first four characters represent the bank and the last six identify the branch.
Send money to IndiaKYC (Know Your Customer)
A mandatory identity verification process required by financial regulations. Before you can send money, providers must verify your identity using government-issued ID and sometimes proof of address. KYC is a one-time process that protects against fraud and money laundering. Most providers complete verification within minutes.
Margin
The percentage difference between the mid-market exchange rate and the rate a provider offers to customers. For example, if the mid-market rate is 100 INR per USD and a provider offers 97 INR, the margin is 3%. Lower margin means a better deal for the customer. Banks typically charge 3-5% margin, while fintechs charge 0.3-1.5%.
Markup
The amount a provider adds on top of the mid-market exchange rate to make a profit. Markup and margin are often used interchangeably. A smaller markup means the customer quote is closer to the mid-market benchmark and the recipient may receive more money.
Mid-Market Rate
The midpoint between the buy and sell prices of two currencies on the global forex market. Also called the interbank rate or real exchange rate. It is a useful benchmark for comparing provider customer rates, but final transfer cost also depends on fees, funding method, and payout method.
Compare rates to mid-marketMobile Wallet
A digital payment service accessible via mobile phone that can store, send, and receive money. Examples include M-Pesa (East Africa), GCash (Philippines), bKash (Bangladesh), and Paytm (India). Mobile wallets are a vital delivery method in regions with low bank account penetration.
OFAC (Office of Foreign Assets Control)
A US government agency that enforces economic and trade sanctions. OFAC maintains lists of sanctioned countries, organizations, and individuals. All money transfer providers must screen transactions against OFAC lists, which can occasionally delay transfers if a name triggers a false positive.
P2P Transfer (Peer-to-Peer)
A transfer directly between two individuals without a traditional intermediary bank. Fintech providers facilitate P2P transfers using technology to match senders and recipients, often resulting in faster and cheaper transfers than traditional banking channels.
Payout Partner
A local bank, mobile money operator, or agent network that a remittance provider partners with to deliver funds in the destination country. The quality and reach of payout partners determines how quickly and conveniently recipients can access their money.
Pegged Currency
A currency whose value is fixed (pegged) to another currency, typically the US dollar. Examples include the UAE Dirham (AED), Hong Kong Dollar (HKD), and Saudi Riyal (SAR). Pegged currencies offer rate stability, meaning the exchange rate for transfers rarely fluctuates.
See rates for AED (pegged currency)PEP (Politically Exposed Person)
An individual who holds or has held a prominent public position, such as a government official, senior politician, or high-ranking military officer. PEPs and their close associates face enhanced due diligence during KYC checks because they are considered higher risk for corruption and money laundering.
Promotional Rate
A temporarily improved exchange rate or reduced fee offered by providers to attract new customers or incentivize transfers. Common promotions include zero-fee first transfers, boosted exchange rates for specific corridors, and referral bonuses. Always check if the promotional rate applies to your specific transfer.
Quote Currency
The second currency in a currency pair. For example, in USD/INR, INR is the quote currency. The exchange rate represents how many units of the quote currency you receive for one unit of the base currency. In remittances, the quote currency is typically what the recipient receives.
Rate Alert
A notification service that alerts you when an exchange rate reaches your desired target. Set a target rate and receive alerts via email, Telegram, or WhatsApp when that rate becomes available. Rate alerts help you time large transfers to maximize the amount the recipient receives.
Set up rate alertsRate History
A record of past exchange rates over a period of time. Reviewing rate history helps you understand trends and determine whether current rates are favorable. Most corridor pages on our platform include rate history charts so you can make informed timing decisions.
Remittance
Money sent by a person in one country to a recipient in another country. Remittances are a vital source of income for millions of families worldwide, with global flows exceeding $650 billion annually. The term typically refers to personal transfers, especially from migrant workers to their home countries.
Routing Number
A nine-digit code used in the United States to identify a specific bank or financial institution. Required for ACH and domestic wire transfers to US bank accounts. Each bank branch has a unique routing number, which can be found on checks, bank statements, or the bank's website.
Sanctions
Government-imposed restrictions that prohibit or limit financial transactions with specific countries, entities, or individuals. Money transfer providers must comply with sanctions from bodies like OFAC (US), EU, and UN. Transfers to sanctioned countries (e.g., North Korea, Iran) are prohibited.
Sender
The person initiating and funding an international money transfer. Senders must complete KYC verification and provide accurate recipient details. The sender is responsible for ensuring the transfer details are correct and that the transaction complies with applicable regulations.
SEPA (Single Euro Payments Area)
A payment integration scheme for the European Union that simplifies bank transfers denominated in euros. SEPA transfers between EU countries are treated like domestic transfers - they are fast (usually same-day), low-cost, and only require the recipient's IBAN. Covers 36 European countries.
Sort Code
A six-digit number (formatted as XX-XX-XX) used in the United Kingdom and Ireland to identify a specific bank and branch. Required when sending money to UK bank accounts. Combined with the account number, it routes the payment to the correct destination.
Send money to the UKSource of Funds
Documentation or declaration explaining where the money being transferred comes from (e.g., salary, savings, property sale, gift). Providers may request source of funds information for large transfers or as part of enhanced due diligence. This is a regulatory requirement to prevent money laundering.
Spread
The difference between the buy and sell price of a currency, or the difference between the mid-market rate and the rate offered to the customer. A wider spread means a worse deal for the customer. Comparing spreads across providers is essential to finding the best transfer rate.
SWIFT (Society for Worldwide Interbank Financial Telecommunication)
A global messaging network used by banks and financial institutions to securely transmit information about financial transactions. SWIFT does not transfer money itself but sends payment instructions between banks. It is the backbone of traditional international wire transfers.
SWIFT Code
An 8 or 11-character code that identifies a specific bank in the SWIFT network. Also known as BIC code. For example, HSBCGB2L identifies HSBC in the UK. You need the recipient's bank SWIFT code for international wire transfers. The code includes: bank code (4 letters), country code (2 letters), location code (2 characters), and optional branch code (3 characters).
Transfer Fee
The explicit charge a provider levies for processing your money transfer. Transfer fees can be flat (e.g., $5 per transfer) or percentage-based (e.g., 1% of the amount). Some providers advertise zero transfer fees but compensate with a larger exchange rate markup. Always consider fees and exchange rate together.
Volatility
The degree to which an exchange rate fluctuates over time. High volatility means rates are changing rapidly, which can be risky for large transfers. Low volatility indicates stable rates. During volatile periods, consider using rate alerts or locking in a rate with a forward contract.
Set a rate alert for volatile currenciesWire Transfer
An electronic transfer of funds through a network of banks or transfer agents. International wire transfers typically use the SWIFT network and can involve correspondent banks, making them slower (2-5 days) and more expensive than modern fintech alternatives. Banks charge $15-$50 per international wire transfer.