If you are considering sending money abroad, you are joining the ranks of hundreds of millions of people in every corner of the world. As of 2021, we are sending countless billions overseas for a variety of reasons, with more money crossing borders than any other point in human history.
Transferring money to another country is now one of the most frequent forms of financial activity, owing partly to the ever-increasing globalization of our economy. But why is it that people send money abroad? If you’re wondering what the main reasons to send money to another country are, read this handy explainer to find out.
1. Sending Money Abroad is Easier Than Ever
Put simply, there are more ways to send money overseas than ever before. Meanwhile, exchange rates are easier to understand than ever, meaning that people know exactly how much their overseas transfers are costing them. For anyone who is wondering how to send money abroad, it is now easier than ever to consult expert guides such as Transferly to learn exactly how to send money to another country instantly and free of charge. This is why overseas transfers continue to increase exponentially.
Historically and today, remittances remain among the most common form of overseas money transfers around. Remittances describe when a person who is working in a country that is not the country of their birth sends money back home to friends and family. This is often done because a person has moved to another country where salaries are higher, meaning that they can earn more money to support their network back home.
3. Salary or Pension Transfers
Most of the world’s largest employers now employ people in other countries. As a result, those employers need to be able to pay salaries and pensions in local currencies to virtually any country in the world. As remote working continues to be the norm for the foreseeable future, it is likely that employers will need ever-increasing methods to safely and reliably transfer salaries and pensions overseas.
4. International Investments
Foreign direct investment (FDI) flows constitute some of the largest sources of international transactions on the planet. Individuals, institutions, companies, and governments are continuing to invest record amounts of cash into other countries, requiring safe and secure international transfer methods. As those investments begin to pay off, it is equally important that the investors can receive their dividends and revenues from the country that their overseas investment is located.
Finally, it is important to point out that more people are on the move than ever before in human history. Hundreds of millions of us are long-term overseas migrants, meaning that it is more important than ever that a well-functioning international money transfer system is in place. When a person’s life is split between multiple countries, money transfer systems become essential infrastructure.
Future-Proof Your Finances Today
Now that you know why we are sending money abroad more than ever, it is time to focus on securing your own finances. For expert insights on lifelong financial health, we have got you covered. Make sure to consult our expert Money guides to learn more.