No matter what type of business you own, sooner or later you’ll be dealing with money transfers.
Paying international suppliers. Compensating remote contractors or independent workers. Supporting employees who regularly send money to family and friends in other countries. Remittance services are bigger parts of more business owners’ lives than you might realize.
The problem is…
Remittance services are not all created equal. Some have high fees. Others take too long. And choosing the wrong one can cost your business thousands per year.
This guide covers everything you as a business owner need to know about remittance services and how to choose the right one for you.
Remittance Services for Business Owners: What You’ll Learn
- What Are Remittance Services?
- Why Business Owners Should Care
- The Different Types of Remittance Services
- How to Choose the Right Service
- Keeping Costs Down
What Are Remittance Services?
Remittance services are platforms that allow people and businesses to send money overseas. They transfer funds from one country to another, typically to recipients who need physical cash quickly.
These services have seen massive growth over the years. In fact, Mexico received record-breaking $64.7 billion in remittances in 2024, to be the second biggest remittance receiver in the world after India.
The corridor between the US and Mexico, is one of the busiest in the world, which is why remittance providers that focus on that corridor offer a variety of delivery options to accommodate the massive demand for money transfers to Mexico, including bank deposits, mobile wallets, and cash pickup at retail locations. For those interested in learning more about how to send money to Mexico, learning the Walmart Mexico cash pickup limit and other provider limitations are useful to know if you plan on making larger transactions.
Remittance Services for Business Owners
Why Business Owners Should Care
Remittances are not just for individuals sending money home to relatives.
Business owners should care about remittance services and remittances for three big reasons:
Supporting International Operations
Today more businesses than ever before operate internationally. Paying overseas contractors, suppliers, and employees is an important part of that.
Choosing the wrong remittance service means lost time and money. Fees are automatically eaten into profit margins. Slow transfers frustrate business partners and delay projects.
Employee Benefits
Employees who have relatives in other countries often need to send them money.
Supporting remittances as a part of your benefits package is a way to help attract and retain talent.
When your employees understand their options, they can make smart decisions. And that means happier, more financially stable workers.
Managing Supplier Payments
International suppliers will often have strong preferences about how they want to be paid.
An understanding of remittance services helps you negotiate better terms and reduce payment delays.
The Different Types of Remittance Services
As a business owner, you have a lot of options when it comes to moving money overseas. Here are the main players in the remittance space:
Traditional Banks
International wire transfers are available from most banks. This is probably what your business is already using.
Bank transfers are the gold standard in terms of security and familiarity. Fees, however, are on the higher side. The same goes for exchange rates.
Speeds are also on the slower side. Many transfers take 3-5 business days to clear.
Money Transfer Operators
Wire services like Western Union and MoneyGram have been around for decades.
Their strength is their physical networks. Most have thousands of pickup locations worldwide.
Cash pickup is a painless and fast process. Recipients can grab their money from retail stores minutes after it has been sent.
Digital-First Platforms
Mobile apps and online platforms have disrupted this market in recent years.
Fees are often lower. Transfer speeds are much faster.
According to the Federal Reserve Bank of Dallas, digital-first transfers cost around 2% to 5% for a $200 transfer while the cost of using traditional money transfer operators is much higher.
Digital-first platforms often directly deposit into bank accounts or mobile wallets. The down side here is that recipients need to have digital access in order to receive their funds.
Cryptocurrency Options
Cryptocurrencies have entered the picture in recent years.
Some businesses look at crypto-based transfers as an option. The promise is for lower fees and faster settlement.
Realistically, there are still a lot of volatility and regulatory concerns with these services. It’s something to keep an eye on but businesses for the most part continue to use traditional providers.
How to Choose the Right Service
Selecting the best remittance service for your business is a matter of figuring out your needs and then matching them up with the best providers.
The key criteria to evaluate:
Transfer Fees
Remittance service providers charge wildly different rates. Some have flat fees. Others take a percentage.
Your job as a business owner is to calculate the actual total cost including both the stated fee and the hidden markup in the exchange rate.
Transfer Speed
Does your business need transfers as quickly as possible? How quickly do you need the money to arrive?
Certain services can deliver in minutes. Others take several days.
Urgent transfers require faster options. Batching up to speed up.
Delivery Methods
Cash pickup? Bank deposit? Mobile wallet?
The ideal delivery method depends on the recipient and their access to banking.
In cash-poor areas with little bank penetration, cash pickup is still essential for reaching recipients.
Transfer Limits
Every service sets limits on how much you can send per transaction, day, or month.
High-volume businesses need to find services that offer high limits.
Limits also vary by delivery method. Cash pickups tend to be lower than bank deposits.
Coverage Area
Not every remittance service operates in every country. Double check the provider supports the destination country.
Some providers focus on specific corridors. You may be able to find a Mexico-focused provider that offers better rates than a truly global provider for that route.
Understanding Transfer Limits and Restrictions
Providers impose limits. There’s a maximum to how much can be sent in a single transaction. Limits per day or month.
Cash pickup services have the lowest limits. This is to protect against fraud and meet regulations.
It’s important to understand those caps and limits as a business owner before settling on a provider. Large-value transfers may need to be broken up or processed using services designed for higher amounts.
Business accounts with higher limits are often available. Business accounts often require more documentation and verification.
Keeping Costs Down
Remittance services can get expensive quickly. Smart business owners know the tricks to lowering their costs:
Compare Providers Regularly
Exchange rates and fees change all the time. What was the best provider last month may not be now.
Regular comparisons keep you using the best deal at any moment in time.
Batch Transfers When Possible
Multiple small transfers will end up costing more than one large transfer.
Batching up to reduce the per-transaction fees whenever possible.
Use Digital Channels
Sending cash directly to someone else’s cash is the most expensive.
Digital-to-digital transfers are the cheapest.
Push your recipients to bank deposits or mobile wallets wherever possible.
Negotiate Volume Discounts
High-volume senders should be able to negotiate better rates.
Ask your providers about business accounts with reduced fees.
Monitor Exchange Rates
Rates fluctuate every day. Monitor the markets and make transfers when rates are in your favor.
Wrapping Things Up
Remittance services have moved from an optional part of doing business to an essential one for business owners who operate internationally.
Fortunately, there are more options available today than ever before. The explosion of digital platforms has driven down costs and increased transfer speeds.
To sum everything quickly:
- Know the different types of services
- Compare fees, speeds, and delivery methods
- Match to the recipient’s access and preferences
- Batch transfers and push digital channels to save money
- Compare providers regularly since rates shift
Choosing the right remittance service saves money, speeds up operations, and keeps your international relationships humming along.