So, you need to send money to someone in the Philippines from Australia. Should you send funds via remittance or bank transfer?
When sending money from Australia to the Philippines, you have the option to send funds via remittance or bank transfer. Which is the better choice?
Let’s talk about what is money remittance and bank transfer and discuss the difference between remittance and bank transfer to help you decide.
What is Remittance? Â
Remittance refers to either the money sent by people working in a foreign country to their loved ones in their home country or the process of sending money from one country to another, typically through a service provider like LBC Express.
What is a Bank Transfer?
A bank transfer involves the movement of funds between two bank accounts. This may be done between accounts in different banks, domestically or internationally. This method is offered by banking institutions, allowing users to send and receive money directly to their bank accounts.
What is the Difference Between Remittance and Bank Transfer?
Both remittance and bank transfers can be used to send funds from Australia to the Philippines. With migrant workers in Australia sending 11% of their annual income to their families, it would make a significant difference to understand how is remittance different from bank transfers.
Requirements
Remittance: Requires only a valid ID, address, and phone number to send money. A bank account is only required for remit-to-account services. Recipients will need the same details plus the tracking number to claim the remittance.
Bank Transfer: Transfer funds via bank transfer, both parties will need a functioning bank account. The sender needs to provide the recipient’s full name, account number, home address, and their bank’s SWIFT code or Bank Identifier Code (BIC).
Speed of Transfer
Remittance: Most remittance service providers like LBC Express offer same-day international money transfers. In some cases, remittance may take only a few hours, making it ideal especially for urgent matters.
Bank Transfer: Although bank transfers are done digitally, they may still take a few days – typically one to three days – as banks need to coordinate with each other first before facilitating the transfer.
Transaction Amount
Remittance: Remittance providers have different transaction limits. Some have a daily limit, while others like LBC Express allow larger transactions but process these on the next day. They also ask for additional details such as the source of funds, the purpose of the transaction, and the relationship between sender and recipient for security purposes.
Bank Transfers: Banks also typically set a transaction limit per individual transfer, though the cap may be larger (or lower) than a remittance service provider’s limit. Of course, this varies per bank.
Costs and Fees
Remittance: Remittance fees are computed based on the service and the amount sent. Remittance fees may range from P3 to P260. Choosing remittance may also afford senders more competitive exchange rates.
Banks: Transaction fees and exchange rates also vary from bank to bank. However, the difference between remittance and bank transfer is banks generally charge 3% to 4% of the transaction amount. So, while they also offer competitive exchange rates, transaction fees are heftier.
Accessibility and Convenience
Remittance: Sending money via remittance is generally more accessible due to fewer requirements and lower transaction fees. They are also convenient since certain services may be completed online. But, more importantly, there are thousands of LBC Express branches all over the Philippines so it’s easy to claim remittances.
Bank Transfer: Unless the recipient already has an account in a major bank in the Philippines, this option may be limited. However, if this is no issue, then bank transfers may also be conveniently completed online.
How to Choose Between Remittance and Bank Transfer
You may have noted major differences in key features of money remittance and bank transfers. Both options can be great choices, but at the end of the day, the better choice depends on your circumstances.
Here are some factors to consider when choosing between remittance and bank transfers:
Urgency
Does your recipient need the money right away or can they wait a few days? If you need a fast money transfer to the Philippines, then it would be more appropriate to use remittance.
Amount and Frequency
The amount of money you’re sending and how often you send affects the total costs of remittance and bank transfers. For smaller, more frequent transactions, money remittance may be more cost-effective, while bank transfers may be better for larger transaction amounts.
Accessibility
It’s also important to consider the convenient option for the recipient. Choose the option that would not require the recipient to travel far. The nearer option would be cost-efficient and safer, too.
Money Remittance or Bank Transfer?
Remittance and bank transfers are the main options for sending money from Australia to the Philippines. While both are secure, the key differences between remittance and bank transfers can make a big difference in your experience. Choose the method that is most convenient, accessible, and cost-efficient.
Send us a message if you want to learn more about LBC Express’s remittance services.
