# How do people send and receive domestic remittances?

In looking at how people in developing economies send and receive domestic remittances, this section distinguishes between cash and several different digital payment channels. These include making payments through a financial institution and making payments through a mobile phone—both of which, depending on the circumstances, can involve using either an account or an OTC transaction. A third digital payment channel involves using a money transfer operator such as Western Union. By definition, payments through a money transfer operator are OTC transactions.

GO TO BOX 2.4 Among the different ways that people send domestic remittances, by far the most common one in all developing regions is to use cash, by handing the money directly to the recipient or by sending it through someone else, such as a bus driver (figure 2.9). The unbanked, unsurprisingly, send remittances mostly in cash. But even among the banked, using cash remains the most common way of sending remittances in most regions.

Sending money digitally through a financial institution—or, in Sub-Saharan Africa, through a mobile phone—is typically the second most common option. Using a money transfer operator is another option for sending remittances digitally, though it was typically only the third most frequently reported method of doing so. Many people use more than one method; survey respondents could report multiple methods, and those sending remittances cited 1.4 on average. The most common method of sending and receiving remittances varies across countries (box 2.4).

As expected, the payment channels through which domestic remittances are received in developing economies largely mirror those through which they are sent (figure 2.10).

# What is the most common digital payment channel for remittances?

Another way of distinguishing between different types of digital remittance payments is whether they are sent or received through an account or through an OTC transaction (figure 2.11). Remittances are considered to have been sent or received through an account if the respondent either has an ac-

> FIGURE 2.9

<!-- Start of picture text --> How people send domestic remittances<br>Adults using method to send remittances in the past year (%), 2014<br>Remittance<br>East Asia & Pacific senders<br>Europe & Central Asia<br>In cash<br>Latin America & Caribbean<br>Through a financial institution<br>Through a mobile phone<br>Middle East Through a money transfer operator<br>South Asia<br>Sub-Saharan Africa<br>0 10 20 30<br>Note: Respondents could report using more than one method.<br>Source: Global Findex database.<br><!-- End of picture text -->

> FIGURE 2.10

How people receive domestic remittances Adults using method to receive remittances in the past year (%), 2014 <!-- Start of picture text --> Remittance<br>East Asia & Pacific recipients<br>Europe & Central Asia<br>In cash<br>Latin America & Caribbean<br>Through a financial institution<br>Through a mobile phone<br>Middle East Through a money transfer operator<br>South Asia<br>Sub-Saharan Africa<br>0 10 20 30 40<br>Note: Respondents could report using more than one method.<br>Source: Global Findex database.<br><!-- End of picture text --> 35 THE GLOBAL FINDEX DATABASE