Money sent home by migrants constitutes the second largest financial inflow to many developing countries, exceeding international aid. Latest estimates vary between IFAD estimates of US$401 billion and the World Bank information from central banks at a more conservative US$250 billion for 2006 and these figures are increasing by almost 30% year on year. Remittances contribute to economic growth and to the livelihoods of needy people worldwide. Moreover, remittance transfers can also promote access to financial services for the sender and recipient, thereby increasing financial and social inclusion. Note though that in 19th century English usage a remittance man was exiled overseas and sent a meagre living allowance from England.

Significance

Remittances are playing an increasingly large role in the economies of many countries, contributing to economic growth and to the livelihoods of needy people (though generally not the poorest of the poor). As remittance receivers often have a higher propensity to own a bank account, remittances promote access to financial services for the sender and recipient, an essential aspect of leveraging remittances to promote economic development.

The World Bank and the Bank for International Settlements have developed international standards for remittance services.

In 2004 the G8 met at the Sea Island Summit and decided to take action to lower the costs for migrant workers who send money back to their friends and families in their country of origin. In light of this, various G8 government developmental organizations, such as the UK government's Department for International Development (DFID) and USAID began to look into ways in which the cost of remitting money could be lowered. One of DFID's responses was to develop a programme called 'Sending Money Home?. the aim of which was to provide a free and simple advice and comparison service for those looking to send money overseas through leaflets and its website (http://www.sendmoneyhome.org) which now not only offers advice on sending money from the UK, USA, Canada, South Africa and several European countries to over 100 countries around the world, but promotes financial inclusion by offering advice to migrant workers about opening bank accounts and promoting specialist advice centres.

The success of Send Money Home quickly demonstrated the demand for an advice service amongst remitters and other governments were quick to try to emulate this service. As of December 2007 similar price comparison websites have been created in France (http://www.envoidargent.org), Germany (http://www.geldtransfair.de), the Netherlands (http://www.geldnaarhuis.nl), Norway (http://www.sendepenger.no), and MoneyMove (http://www.moneymove.org).