Yotam Dar on Money Remittance and How It Works in Europe


Each year, the International Fund for Agricultural Development (IFAD) undertakes an analysis of data published by the World Bank to produce a comprehensive report on the international movement of money in and out of Europe. This report is financed by huge businesses, the Government of Luxembourg, the Swiss Agency for Development and Cooperation, the United National Capital Development Fund, the European Commission, and the Ministry of Foreign Affairs of Spain.

This international selection of benefactors seeks to learn more about money remittance works in Europe. The report compiles all of their findings, providing invaluable insight into how money is moved not only within Europe but internationally.

What is Money Remittance?

In general, money remittance is any payment that is moved from one party to another. In business, an example of money remittance would be when a freelancer submits an invoice for their completed work to a business and is then paid for that work. At its most simple, it’s the movement of money.

However, over the recent 10-15 years, money remittance has also gained a firm connotation of money that’s sent to migrants that have moved from one country to another. Whether they need to pay a mortgage back in their home country or are sending money home to their family, there is a huge amount of money that leaves one country and enters another every single year.

Europe is home to 20% of the world’s migrant workers, so it naturally has a large percentage of money remittance payments. Although Europe only makes up 9.7% of the world’s population, it is where 25% of all money remittance payments take place. Naturally, this calls for further inquiry.

Where are European Money Remittance Payments Directed?

Sending of money remittance payments happens in every single European country, with an extensive network of payments leaving the countries and moving to others. Every single year within Europe, around $110 billion USD is sent from Europe to external locations. Breaking this down, in 2014:

  • Latin America and the Caribbean received $6.2 billion
  • Africa received $23.1 billion
  • Asia and the Pacific received $24.9 billion
  • Near East and the Caucasus received $8.7 billion

As you can tell, money remittance spans across the whole world, with payments moving out of Europe and to countries all over the globe.

On a country basis, there are five individual countries that make up 42% of all the money received from European remittance payments. These are:

  • Nigeria ($7.4 billion)
  • China ($6.3 billion)
  • Morocco ($6.2 billion)
  • India ($5.7 billion)
  • Uzbekistan ($5.6 billion)

Turkey used to be one of the highest recipients of money remittance from other European countries, but it has since fallen to a figure of just about $1 billion in total payments.

When discussing the main sending pathways, there are six countries that continually rank at the top of the pile. Most certainly, these countries are the highest due to two main reasons. The first is that they are central locations where many migrants will immigrate to. With high living wages and jobs in many sectors available, these countries represent fantastic locations to immigrate to for those looking for a higher wage.

Secondly, these countries are epicenters of European business. With large stakes in international markets, these countries see business on a scale that some countries within Europe still have not reached. Due to the mix of these two reasons, these six countries almost always place at the top of this list. They are:

  • Russia
  • United Kingdom
  • Germany
  • France
  • Italy
  • Spain

Russia has the highest money remittance pathway payment, with a continual stream of over $20,688 million USD. The second-highest payment stream comes from the United Kingdom, which will transfer over $17,173 million USD in any given year. At the bottom of these six is Spain, which sees a total of $9,610 million USD each year. Between these fall the other three, all in the range of $10-14,000 million USD per year.

How Much Does it Cost to Send Money Remittance Payments in Europe?

In 2014, the world average fee for sending a remittance payment came to 7.9% of the total amount. While this was the world average, Europe came in slightly below this at 7.3%. However, even lower rates can be found in places like the Russian Federation when transferring to Central Asian countries, which come in at only 2.4%.

On the flip side, the very highest payments were from Switzerland, totaling 14.5%, and France, which came in at 10.7%. Considering the billions of USD that are moved from Europe every single year, these high percentages represent a huge market.

Due to the difficulty of navigating the vastly different legal frameworks of different European countries, many technologies that desire to capture a percentage of this market and facilitate international money remittance pathways are still in legal battles or moving through regulatory periods.

Final Thoughts

Tracking international money remittance payments brings to light a range of economic and social factors in which Europe partakes. From migration pathways to sending fees, the report that the IFAD produces reveals important facts and figures about the movement of money.

From the top countries where money remittance payments are made to the highest recipients on an international scale, this report details key statistics and regulatory facts about money remittance. Considering that Europe has such a high percentage of migrant workers, it’s no wonder that money remittance is a vital topic of importance on this continent.

As the world continues to present new options for remote working, we’re likely to see more and more workers move abroad and start needing to send money internationally. As this occurs, it’s likely that money remittance will continue to be a vital topic of discussion.


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