remittance cost
Remittance cost is the total you lose sending money home, and most of it hides in the exchange rate rather than the fee.
In plain English
Every service advertises the fee. Almost none advertises where they actually make their money.
When you send money to Nigeria, you pay in two places. There is the visible fee, which might be £3 or £5, and there is the exchange rate you are given, which is frequently worse than the real market rate. That gap between the true rate and the one you received is a charge, and it does not appear anywhere on your receipt.
On a large transfer it dwarfs the fee entirely. A service charging £2 with a poor rate can cost you far more than one charging £6 with an honest one, and you will never know unless you compare what actually arrives.
Africa carries some of the highest remittance costs in the world, which is a quiet scandal given that the people paying them are frequently supporting families who need every naira.
The defence is simple and almost nobody does it. Before you send, compare the final naira amount from three services on the same day, for the same sum. Not the fee. The naira.
Over a decade of monthly transfers, that habit is worth a very large amount of money that would otherwise have gone to somebody else.
You send £500. One service charges £2 and delivers ₦870,000. Another charges £6 and delivers ₦935,000. The second cost more and sent ₦65,000 more. Repeated monthly for ten years, that difference is over ₦7 million.
Questions people ask
What is the cheapest way to send money to Nigeria?
It changes constantly, so compare the final naira amount on the day you send. Digital services are generally cheaper than cash agents, but always check rather than assume.
Why is sending money to Africa so expensive?
A mix of limited competition on some routes, compliance costs and cash collection networks. It has improved with digital services, and it remains higher than it should be.
Should I use the parallel market?
Rates there can be better and the risks are real, including fraud and legality. Weigh the saving against the possibility of losing the entire transfer.
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