Why is the received amount less than the sent amount?

There are various reasons why the amount received from a remittance might be less than the amount sent. Below are some common causes and their explanations:

1. Remittance Fees

Remittance fees are one of the most common reasons. Fees can be incurred at several stages:

• Sending bank fees: Fees charged by the remitting bank. Different banks and remittance methods have different fee structures.
• Intermediary bank fees: If the remittance passes through one or more intermediary banks, these banks may charge fees.

• Receiving bank fees: The receiving bank may also charge certain fees.

• Exchange Rate Differences

Exchange rate differences can also affect the amount received. Currency conversion may be involved during the remittance process, and different banks and financial institutions may use slightly different exchange rates:

• Sending bank exchange rate: The remitting bank converts your currency to the recipient’s currency based on its exchange rate.

• Receiving bank exchange rate: The receiving bank converts the currency into the account currency based on its exchange rate.

• Correspondent Bank Charges

Correspondent bank charges refer to fees charged by intermediary banks involved in international remittances. These fees are usually deducted directly from the remittance amount.

1. Telegraphic Transfer Fees

Telegraphic transfer fees are costs incurred when sending international remittances via telegraphic transfer, including SWIFT transfer fees and others.

1. Foreign Exchange Controls and Hidden Fees

Some countries impose strict foreign exchange controls on remittances, which may involve additional charges. Hidden fees may also include banks’ exchange rate margins, processing fees, and so on.

How to Reduce Remittance Losses

Choose local remittance methods based on the amount and destination to avoid unnecessary fees. BiyaPay matches local bank transfers, where banks charge little or no fees, helping to save on remittance costs.