What does the term 'remittance' commonly refer to?

The term 'remittance' commonly refers to a payment, often electronic and personal, sent by an individual or entity to another party. This concept is integral in various contexts, such as international money transfers, employee wages, or personal funds sent to family members in different countries. Remittances often emphasize the transfer of money across borders, typically for personal reasons, such as supporting relatives or paying bills.

The electronic aspect highlights the modern methods of transferring funds, which can incorporate various technologies to ensure quick and efficient transactions. These transactions play a significant role in the global economy, influencing the financial lives of many individuals receiving funds from abroad. Understanding the remittance process is crucial for anyone studying payments, as it encompasses key elements of personal finance, payment systems, and international economic relationships.