REMITTANCES
In many countries, such as the Philippines, India and Mexico, large numbers of workers support their families by working abroad. In some Middle East countries foreign workers outnumber local residents. In countries such as Singapore and the Hong Kong SAR (Special Administrative Region) there are hundreds of thousands of foreign domestic workers from the Philippines and Indonesia.
This has created a retail demand from foreign workers to send funds to their families back home. Banks are just one of a number of financial institutions that provide remittance services. Banks effect this by means of electronic transfer.
There is also a large informal, lightly regulated business for transferring money home. A mainland Chinese worker in Singapore wanting to remit funds to his family in Shanghai will go to a moneychanger and hand over the cash. The moneychanger will then call, or send a fax, to instruct their counterpart in Shanghai to make payment to the named recipient.
This practice creates a number of problems. It leaves workers open to fraud and distorts published statistics on cross-border fund flows. It also facilitates money laundering. It is difficult to see how these businesses can be either better regulated or eliminated, however.