Summary
A remittance is money transferred from a person living or working in one country to family or recipients in another — the term most commonly refers to migrant workers sending a portion of their earnings home to support family; globally, migrant workers sent approximately $857 billion in remittances in 2025 — more than the GDP of Switzerland and significantly larger than total foreign aid flows to developing countries
Remittances are the most important external financial flow for many developing economies — for countries including Nepal, the Philippines, Samoa and Tonga, remittances represent 26-38% of GDP; for individual families, they are often not supplementary income but the primary source of money for rent, school fees, food and medical bills
From Australia and New Zealand, remittances can be sent via banks, specialist transfer services or mobile apps — OrbitRemit is a specialist remittance service regulated by ASIC in Australia and the DIA in New Zealand, offering fee-free transfers on major Asia-Pacific corridors
Every month, hundreds of millions of people around the world do the same thing: they earn money in one country and send a portion of it home to family in another. A construction worker in Sydney sending money to his parents in Kerala. A nurse in Auckland supporting her children in Manila. A student in Melbourne helping her grandmother in Kathmandu pay the electricity bill.
These transfers have a name — remittances — and together they form one of the most significant financial flows in the world economy.
What is a remittance?
A remittance is a transfer of money sent by a person living or working in one country to a recipient in another country. In everyday use, the term almost always refers to money sent by migrant workers back to their families in their home country.
The word itself comes from the Latin remittere — to send back. And that is exactly what a remittance is: money sent back to where you came from, to the people you left behind.
The World Bank’s definition: Remittances = personal transfers (money sent directly between individuals) + compensation of employees (wages earned in one country and sent to another). For practical purposes, the term is used almost universally to mean personal transfers from migrants to family.
What remittances are used for: Unlike foreign investment or government aid — which flow to institutions — remittances go directly to households. They are used for food, rent, school fees, medical treatment, home improvements, starting a small business and supporting elderly relatives. For most recipient families, remittances are not extra money. They are the money that keeps life running.
How big are global remittances?
Remittances are one of the largest and most stable financial flows in the world economy.
| Metric | Figure | Source |
|---|---|---|
| Total global remittances sent in 2025 | $857 billion | World Bank via moneytransferreviews.com (March 2026) |
| Remittances to low and middle-income countries (LMICs) in 2024 | $685 billion | World Bank Migration and Development Brief (December 2025) |
| Growth in remittances to LMICs over the past decade | +57% | World Bank (December 2024) |
| Change in FDI to developing countries over the same period | -41% | World Bank (December 2024) |
| Largest single recipient country | India — $125 billion in 2023 | World Bank via moneytransfers.com (April 2026) |
| India’s share of total global remittances | 14.5% | moneytransfers.com (April 2026) |
| Projected global remittances in 2026 | $900-920 billion | coinlaw.io (June 2026) |
To put $857 billion in context: It is more than the GDP of Switzerland. It is larger than the combined total of foreign direct investment and official development assistance (aid) to developing countries. And unlike aid or investment — which can be redirected, delayed or tied to conditions — remittances go directly into household bank accounts and wallets.
Which countries receive the most remittances?
By total volume (2023 data):
| Country | Remittances received |
|---|---|
| India | $125 billion |
| Mexico | $67 billion |
| China | $50 billion |
| Philippines | $40 billion |
| Pakistan | $27 billion |
| Bangladesh | $22 billion |
| Egypt | $19 billion |
| Nigeria | $19 billion |
| Vietnam | $16 billion |
By share of GDP — where remittances matter most:
| Country | Remittances as % of GDP |
|---|---|
| Tajikistan | ~45% |
| Tonga | ~38% |
| Samoa | ~26% |
| Nepal | ~27% |
| El Salvador | ~24% |
| Lebanon | ~27% |
| Honduras | ~21% |
| Philippines | ~9% |
| India | ~3% |
Source: World Bank Migration and Development Brief, December 2024
For countries like Tonga, Samoa and Nepal, remittances are not a supplement to the economy — they are a foundational pillar of it. Without money sent home from New Zealand, Australia, the US and the Gulf States, these economies would look fundamentally different.
How does a remittance work?
At its core, a remittance follows a simple path: money leaves the sender’s account, travels through one or more intermediary systems, and arrives in the recipient’s account or hands.
The method of transfer determines the speed, cost and route. Here are the main channels:
Bank wire transfer (SWIFT)
The traditional method. The sender instructs their bank to transfer funds to the recipient’s bank overseas. The transfer travels through the SWIFT network — often via one or more correspondent banks — and typically takes 2-5 business days. Fees include the bank’s sending fee plus an exchange rate margin of 3-5%.
Best for: Large amounts where bank documentation is required. Not ideal for speed or cost on smaller everyday transfers.
Specialist remittance services (like OrbitRemit)
Companies that specialise in international transfers — using technology and local banking relationships to move money faster and more cheaply than traditional banks. Instead of routing through SWIFT, specialist services often hold local currency pools in each country and settle directly with local banks.
Best for: Regular transfers to family. Fee-free on major corridors. Faster — over 85% of Asia-Pacific transfers via OrbitRemit arrive within 2 hours.
Mobile wallet delivery
For recipients in countries with strong mobile wallet infrastructure — GCash in the Philippines, eSewa in Nepal, MoMo in Vietnam — the remittance can be delivered directly to the recipient’s digital wallet. No bank account required.
Best for: Recipients in countries with strong mobile wallet adoption; families without a bank account.
Cash pickup
The sender initiates a transfer online and the recipient collects cash at a local agent location — a partner post office, pharmacy, convenience store or dedicated agent outlet. Used extensively in the Philippines, Nepal and across Africa.
Best for: Recipients in areas with limited banking infrastructure; urgent transfers where cash is needed immediately.
What does a remittance cost?
The global average cost of sending a remittance is approximately 6.0-6.36% of the transfer amount — meaning that to send $100 to family overseas, you lose $6-7 on average in fees and exchange rate margins.
The United Nations Sustainable Development Goal 10.c.1 sets a target of reducing the global average cost of remittances to under 3% — a target the World Bank has been actively pursuing.
Why the cost matters: Remittances flow predominantly to families in lower-income countries. Every dollar lost to fees is a dollar that does not reach the family. Reducing the cost of remittances from 6% to 3% globally would free up approximately $16 billion per year for recipient households — money that currently goes to banks and transfer services.
The cost varies enormously by corridor and provider:
| Provider type | Typical cost |
|---|---|
| Traditional banks (SWIFT) | 5-8% including exchange rate margin |
| Specialist services (OrbitRemit) | 0-2% — fee-free on major corridors |
| Cash pickup agents | 3-6% |
| Digital wallets | 1-3% |
What is the difference between a remittance and a wire transfer?
These terms are often used interchangeably but have slightly different meanings:
| Remittance | Wire transfer | |
|---|---|---|
| What it means | Money sent by a migrant to family at home — can use any channel | A specific technical method of sending money electronically via a bank network (SWIFT) |
| Who uses it | Migrants, diaspora communities | Businesses, individuals, anyone making an international bank payment |
| How it travels | Any channel — bank, specialist service, mobile wallet, cash pickup | Specifically via SWIFT or another bank wire network |
| Everyday usage | Broad term for any cross-border personal transfer | More technical term used by banks |
In short: all wire transfers can be remittances, but not all remittances are wire transfers. When your mum in the Philippines receives money you sent via GCash — that is a remittance, but it is not a wire transfer.
Why remittances are more resilient than foreign aid
Development economists have long noted that remittances are more stable and more impactful than official foreign aid:
They go directly to households: Aid often flows to governments or NGOs, where it can be subject to corruption, administrative costs and political conditions. Remittances go directly to families.
They grow even in economic downturns: During recessions, migrants often increase remittances to help family cope with rising costs at home — making remittances counter-cyclical, unlike FDI which declines in downturns.
They are consistent: Migrants send money home month after month, year after year. The regularity of remittances makes them a more reliable income source than aid grants or loans.
They are self-targeting: Remittances naturally flow to households that need them — because it is the family of that particular migrant who receives the money.
Remittances from Australia and New Zealand
Australia and New Zealand are two of the world’s most significant remittance-sending countries relative to their population — reflecting both nations’ large and diverse migrant communities.
Key Australian corridors: AUD to INR (India), AUD to PHP (Philippines), AUD to VND (Vietnam), AUD to NPR (Nepal), AUD to BDT (Bangladesh), AUD to GBP (UK), AUD to CNY (China)
Key New Zealand corridors: NZD to INR, NZD to PHP, NZD to NPR, NZD to WST (Samoa), NZD to TOP (Tonga), NZD to FJD (Fiji), NZD to GBP
OrbitRemit fees from Australia and New Zealand:
| Corridor | Fee from Australia | Fee from New Zealand |
|---|---|---|
| To India (INR) | AUD $0 — fee-free | NZD $4 flat |
| To Philippines (PHP) | AUD $0 — fee-free | NZD $4 flat |
| To Vietnam (VND) | AUD $0 — fee-free | NZD $4 flat |
| To Nepal (NPR) | AUD $0 — fee-free | NZD $4 flat |
| To Bangladesh (BDT) | AUD $0 — fee-free | NZD $0 — fee-free |
| To South Korea (KRW) | AUD $0 — fee-free | NZD $0 — fee-free |
| To Samoa (WST) | AUD $2 flat | NZD $2 flat |
| To Fiji (FJD) | AUD $1 flat | NZD $1 flat |
| To UK (GBP) | AUD $0 — fee-free | NZD $4 flat |
| All transfers above $10,000 | Fee-free | Fee-free |
FAQs (frequently asked questions)
What is a remittance?
Money sent by a person living or working in one country to family or recipients in another — most commonly a migrant worker sending earnings home to support family. Globally, over $857 billion in remittances was sent in 2025.
How is a remittance different from a regular bank transfer?
A remittance specifically refers to a personal cross-border transfer — usually from a migrant to family. A bank transfer is the technical method. Remittances can be sent via banks, specialist services, mobile wallets or cash pickup — not all of which are bank transfers.
What is the cheapest way to send a remittance from Australia?
Specialist remittance services are typically much cheaper than banks. OrbitRemit offers fee-free transfers from Australia to India, Philippines, Vietnam, Nepal, Bangladesh and the UK. Banks typically charge 5-8% including exchange rate margins.
How long does a remittance take?
Via a specialist service like OrbitRemit — over 85% of Asia-Pacific transfers arrive within 2 hours. Via bank wire transfer (SWIFT) — 2-5 business days. Via cash pickup — often same day or within hours.
Why are remittance costs so high?
The global average cost is approximately 6%. High costs are driven by exchange rate margins charged by banks, correspondent banking fees along SWIFT routes, compliance costs and lack of competition in some corridors. Specialist digital services are significantly cheaper than traditional bank transfers.
What is the largest remittance-receiving country?
India — receiving approximately $125 billion in 2023, representing about 14.5% of total global remittance flows.
Related guides
- What is a SWIFT transfer? →
- How to receive money from overseas in Australia →
- OrbitRemit vs bank transfer →
- What is an exchange rate? →
What it means for your transfers
Whether you call it a remittance, a wire transfer or just “sending money home” — OrbitRemit exists to make it faster, cheaper and more transparent. Fee-free on major Asia-Pacific corridors from Australia and New Zealand, with the rate locked at confirmation and over 85% of transfers arriving within 2 hours.
This guide is for general information only. Fees and exchange rates fluctuate — check current rates at orbitremit.com. Last updated September 2026.
Sources: moneytransferreviews.com — Global Remittance Flows 2026 (March 27, 2026) | arcawallet.app — Remittance Statistics 2026 (June 12, 2026) | moneytransfers.com — Remittance Statistics 2026 (April 20, 2026) | coinlaw.io — Global Remittance Statistics 2026 (June 11, 2026) | moneytransfer.store — What Is a Remittance? (June 17, 2026) | World Bank — Migration and Development Brief (December 2025) | World Migration Report 2026 — International Remittances (IOM, accessed January 2026)
