Mexico City. Increased immigration from South and Central American countries to Mexico is creating a new niche of activity for financial companies, many of which operate from mobile applications.
In the first nine months of this year, migrant workers based in Mexico, including those from Central and South American countries, sent remittances to their families worth $820 million, according to official data, an amount still modest compared to inflows originating in the United States. States or Spain, but it is growing and is the focus of many companies.
Information from Banco de México (BdeM) shows that between the first three quarters of last year and the corresponding period of 2022, remittance flows from Mexico abroad increased by 6.5 percent. Almost half of these resources, 45 percent, went to the United States, but Colombia, China, Honduras, Peru, Argentina and the Dominican Republic also stand out.
Among the above, in addition to Canada and Guatemala, they concentrate 85 percent of the resources that workers in Mexico send out of the country, according to central bank statistics.
Companies dedicated to sending remittances from Mexico abroad focus their markets in many Latin American countries and even in Asia. With operations where the recipient can receive the money in a matter of minutes, they charge commissions of 2 percent per shipment, depending on the amount.
And the “Economic Development Bank of Bahrain” showed that during the period from July to September of this year, remittances left the country in the amount of $ 267 million, which is less than the figure recorded in the immediately previous quarter, when the amount reached 282 million dollar. And also less than the $270 million that they represented in the first quarter.
The United States appears as the country with the largest amount of remittances being sent with $118 million at the end of the third quarter.
In the cumulative period from January to September this year, 368 million US dollars were sent from Mexico to the United States, while the figure for the same period last year rose to 349 million dollars, which is an increase of 5.4 percent.
Although the neighboring country is where a larger amount of money is being sent than Mexico, many Latin American countries are becoming more important.
Such is the case in Colombia, the country to which $42 million was sent during the third quarter of the year, an increase of 10.5 percent compared to the $38 million reported in the first quarter of the year.
The central bank reported that between January and September, $123 million was sent from Mexico to Colombia, and in the same period last year, the figure was $124 million.
According to central bank figures, $7 million was sent to Honduras during the third quarter of the year; for Argentina, 5.9 million; to the Dominican Republic 4.9 million; to Venezuela 1.7 million; To Brazil, 1.5 million, and El Salvador, 3 million, to name a few countries.
There are two ways to send money from Mexico abroad: the traditional way is to go to a branch and the other is to do it from the mobile application; The latter allowed to reduce shipping costs.
In the traditional model, you have to go to the remittance branch and send the money to another office located in the country of destination. Sending costs depend on the amount to be run i.e. a $100 operation can earn 3 percent commission in entities such as Moneygram or Western Union.
The other is through digital applications, which allow you to send money to any part of the world from Mexico with an account in their systems. There are many companies operating through these channels, the most traditional ones are still Western Union or MoneyGram, but more and more financial technology They ventured into this business model.
The latter are financial technology institutions that, on average, charge 20 pesos per transaction and charge online. To use it, it is necessary to register a mobile phone number and then a bank account in Mexican pesos, then attach the account number of the beneficiary abroad and his cell phone, and that they also have an account in the application.
Pablo Porro, general manager of Western Union in Mexico, pointed out at a conference that shipments from the country abroad are due to workers sending money to their families, supporting students abroad, and person-to-person transactions. The business is exciting, which is why large institutions have developed their own channels for conducting international transactions, as in the case of Banco Azteca.
Asia is another destination
Central America and the various countries of Mercosur are not the only destinations where money is being sent from Mexico, as Asia emerges as another continent to which a great deal of resources are being sent.
According to central bank figures, $10.4 million was sent to China during the third quarter of the year, and $1.8 million to South Korea.
The mechanics of sending money to these countries are the same: traditional options and digital applications, which also charge an average of 20 pesos for sending money and are reflected within minutes.
Sending remittances from Mexico abroad is cheaper than sending money from the USA to our country.
On average, California remittance companies charge their citizens a $10 commission for $300 purchases; While sending $300 from Mexico to a Latin American country, according to Pages financial technologyat a cost of 20 pesos per transaction.