In 2024, Mexico received more than 64 billion dollars in remittances and, although this year a drop of between 3% and 4% is expected, they will continue to be key to the economy of millions of Mexican families.
With digitalization and the rise of financial applications, commercial alliances emerged that allowed faster and cheaper sending of remittances.
“It is no longer a value-added service, but something that users already take for granted,” said Carlos Valderrama, expert and founder of Legal Paradox.
The specialist highlights that there is a theory by Everett Rogers that suggests that when the adoption curve of a financial service reaches 12%, it will continue to grow and will be irreversible.
“Right now we are at 10% of remittances sent through digital means. Once we raise those two points, the curve is exponential,” he said.
One of the fintech companies that offer remittance services was Mercado Pago, the fintech that plans to become a bank and that launched an alliance with Western Union in 2022.
Later, the alliance was extended with Xoom, Félix Pago, MoneyGram, Ria, Remitly, Intercambio Express, Enramex, Barri, Intermex, Monty Global, IDT and Omnex.
In January 2024, Nu México launched the option to receive money from the United States, in partnership with Félix Pago.
Banks, with pre-existing alliances but better conditions
Although banks such as Santander and Banorte already offered remittance sending services, they recently announced that they were eliminating the charging of commissions on remittances for their clients.
“Since before the pandemic (remittance shipments) began to grow quite a bit in terms of transactionality,” Normando Rojas, executive director of international payments at Banorte, said in an interview.
The bank said that as part of the plan to improve the customer experience, easier shipping was promoted – via its transmitter in the United States, Uniteller.
For the bank, it is not about achieving a specific number of money transfers but rather about improving the customer experience, also opening accounts in the country.
When asked about its actions in terms of money laundering prevention and in a context in which three financial institutions disappeared in Mexico for alleged money laundering, Banorte said that having a transmitter under US regulation is its greatest strength.
“One of the main reasons why the group decided to have a transmission company in the United States was precisely to strengthen the prevention of money laundering programs,” he said.
On the Santander side, Gerardo Vargas Sandoval, responsible for the FX domain, said in an interview that the sending of up to seven currencies is now allowed via the bank’s app without commission.
“We began to see that customers preferred to use the digital part instead of going to the branch,” he explained. “So, the level of in-person transactions dropped.”
Although eliminating the commission of up to $15 will mean lower income, the bank wants to bet on customer loyalty.
“We see that customers value personalized treatment, although they increasingly give more weight to the digital experience,” said Vargas.
