Remittance Terms Explained: A Plain-Language Glossary

Rate and pricing terms

Mid-market rate — the true, fair exchange rate between two currencies, the midpoint at which banks and traders exchange currency with each other, before any provider adds a margin. This is the number you'd see on Google or XE.

Margin (or spread) — the difference between the mid-market rate and the rate a provider actually gives you. This is how most providers make money, whether or not they also charge a separate visible fee.

Transfer rate — the actual rate you receive on a specific transfer, after the provider's margin is applied. This is the number that determines how much your family actually gets, not the mid-market rate.

Flat fee — a fixed charge added on top of a transfer, regardless of the exchange rate margin. Some providers charge both a fee and a margin; others fold everything into the margin and advertise "zero fee."

How money actually moves

SWIFT — the global messaging network banks use to communicate international transfers to each other. A "SWIFT transfer" typically means a traditional bank-to-bank wire, often slower and pricier than a dedicated remittance app.

Correspondent bank — an intermediary bank that helps route a transfer between your bank and the recipient's bank when they don't have a direct relationship. Each correspondent bank in the chain can add its own fee and delay — part of why some bank transfers take longer and cost more than expected.

IBAN — International Bank Account Number, a standardized account number format used for international transfers, common in the UAE, UK, and EU. Not all countries use IBANs; Nepal typically doesn't for domestic accounts.

Cash pickup — a delivery method where the recipient collects cash in person at a partner agent location, rather than the money going to a bank account or wallet.

Compliance and verification terms

KYC (Know Your Customer) — the identity verification process every regulated provider is required to run, using documents like an Emirates ID or passport, to confirm who you are and prevent fraud or money laundering.

AML (Anti-Money Laundering) — the broader set of regulations and internal controls providers follow to detect and prevent illicit money movement. KYC is one part of a provider's AML program.

Source of funds — documentation a provider may request for larger transfers, showing where the money came from (a salary slip, for example), required under most countries' AML rules above certain thresholds.

Provider and regulatory terms

CBUAE — the Central Bank of the UAE, the regulator responsible for licensing banks, exchange houses, and digital remittance providers operating in the country. A provider being "CBUAE-licensed" is the baseline check worth doing before trusting them with a transfer.

Exchange house — a licensed, often branch-based provider (like Al Ansari, LuLu, or GCC Exchange) offering currency exchange and remittance services, distinct from a bank or a purely digital app.

NRB — Nepal Rastra Bank, Nepal's central bank, which regulates banks and licensed remittance operators on the receiving end.

Hundi — an informal, unregulated method of moving money, illegal in Nepal, that bypasses formal banking and remittance channels entirely.

Wallet and delivery terms

Digital wallet — an app-based account (like eSewa or Khalti in Nepal) that holds money electronically, usable for payments, transfers, or bill payments without a traditional bank account.

WPS (Wage Protection System) — the UAE's mandated electronic salary payment system, ensuring workers are paid on time through registered bank or exchange house accounts.

Frequently Asked Questions

See also: 7 remittance mistakes to avoid · how to spot a remittance scam · compare every provider