10 Essential Money Transfer Terms You Should Learn Today

Sending money abroad? Learn these terms and abbreviations before making your first or second international money transfer.

If we are honest, payment lingo is too complicated for its own good. When customers come across complex financial technology language, their eyes glaze over, and they lose interest immediately. In some cases, some customers end up skipping past relevant information that could cost them big bucks. 

Sending money overseas is a daunting task– why add confusing language to the mix? At Sprint, we believe in simplicity and ease, so you don’t have to worry about getting confused while you use our services.

Before making your first international money transfer with Sprint, we think you’ll benefit from learning these commonly used money transfer terminologies:

Central Bank: A central bank is an institution responsible for providing financial and banking services for its country’s government and commercial banking networks. In most contemporary economies, the central bank also sets interest rates and regulates banks. 

Cross-border Payments: Refers to transactions that take place in two separate countries. For example, a merchant in the United States can remit payments to a vendor who works and lives in South Africa. 

Exchange rate: An exchange is the value of a country’s currency compared to another nation or economic state’s currency. For example, how much Naira would one need to purchase one US dollar? On Dec 7th, 2020, when this article was written, it took four hundred and eighty Naira (N480) to buy a dollar ($1). 

Forex [FX]: Did you know that forex is a portmanteau word [a word that is formed by combining two or more words] for foreign currency and exchange? Simply put, forex involves the trading of one currency for another on the foreign exchange market. 

KYC: KYC stands for Know Your Customer. It’s a mandatory information collection process carried out by financial institutions as a means of fraud prevention. KYC forms will typically ask customers to provide personal data such as government name, residential address, and a form of photo identification. 

Money transfer agent: This is a locally-planted business that collaborates with money transfer providers to offer in-store money transfer services to individuals. 

Recipient: A recipient is the person/party receiving the money transfer. Recipients are also referred to as beneficiaries and receivers. 

Remittance: Derived from the word ‘remit’ – which means ‘to send back’ – remittance refers to any sum of money sent from one party to another. In most cases, the recipient and beneficiary are in two different countries. Remittance can be personal money transfers made out to friends and loved ones or business payments made to vendors and contract staff. Money can be sent overseas via a wire transfer, check, online money transfer service, or snail mail (we do not recommend this method for security reasons!). 

Sender: refers to the individual or business that initiates a money transfer.

Wire Transfer: A wire transfer is otherwise known as an electronic money transfer. Each wire transfer makes its way through a system of banks and money transfer platforms.

To get started with sending money to your loved ones in Africa, visit www.sendsprint.com