According to a 2018 report by the Honduran embassy in Spain, over 100,000 Hondurans live in the country. In the United States, the Honduran population is the third largest of all Caribbean countries at between 800,000 and 1 million.
Most of the diaspora population consists of economic immigrants and political asylum seekers and refugees. They are all looking for a better life elsewhere and sending their earnings home to support those left behind.
Remittances form a crucial part of household support in the Latin American and the Caribbean (LAC) country. In 2018, Hondurans abroad remitted home $4,751 million, 80 per cent of which came from the United States. The 2018 remittances amounted to 20 per cent of GDP.
Whether you are in the United States, Spain, Mexico, Nicaragua, El Salvador, Canada or Iceland, you can send money to Honduras. However, to do so, you need to have all the information on the various methods of sending to Honduras.
This guide covers the different ways of sending money to Honduras, the information you need, and the reasons why money transfer services are the best channel for you.
Sending money to Honduras is simple and easy. Follow these steps to get started.
There are multiple ways to easily send and receive money in Honduras but these will largely depend on the provider you decide to use. Below you will find everything you need to know about sending and receiving money.
Hondurans sending money home have the option of banks or money transfer service providers. The choice of the channel to use largely depends on the recipient location, their banking status, the urgency of the funds, and the distributive network of the different players in the remittance industry.
The Honduras banking system consists of 15 private banks and a total of 7 financial groups. Five of the banks control 93 per cent of the bank remittance channel in the country. In such a tight market the benefits of competition such as low-priced transfers and technologically advanced products are minimal.
Interbank transfers are safe and convenient for sending large amounts of money. When sending from the United States, you’ll have an advantage because the Honduras financial system has 50.2 per cent of its deposits in the United States banks.
The biggest problem with the banking channel for sending remittances is that a large population of Hondurans are unbanked with little or no access to mainstream financial services. Secondly, bank transfers are relatively more expensive and much slower to complete.
Most Honduran migrants in the U.S. use money transfer operators (MTOs) when sending money home. The transfers rarely exceed $3,000 per transaction making this method of sending very convenient.
While it is true that MTOs offer cheaper options to transfer money home, most Hondurans do not prioritise cost when sending money. They look at the geographical proximity of the provider in the country of destination, extended service hours, quick delivery times, reliability and non-bureaucratic operations.
There are two main ways of sending money to Honduras using money transfer service providers: bank transfers and cash pick up.
Bank Transfers- You can send money from the website or mobile app of the provider you choose straight to the bank account of your loved one. Unlike the traditional interbank transfer, this method is cheaper and takes a maximum of 3 days with providers such as WorldRemit and MoneyGram.
Cash Pick Up -Providers such as Xoom, MoneyGram, Remitly, and Western Union offer cash pickup as a sending option. This method is convenient when sending smaller amounts under $1,500.
Xoom has 530 locations from where your loved ones can collect their cash. MoneyGram has 1,500 locations spread across Honduras.
Transferring money through MTOs is a simple process. All you need is to signup for an account. You can register online through the provider’s website or use a downloadable app.
After you register for the account, pay for your transfer. There are three options you can use to pay for your transfer; bank debit, credit card, and debit card. Of the three methods, paying using a credit card is the most expensive.
With your transfer account funded, you can do the transfer to a bank or cash pick up location straight from the website or mobile app. Providers like Western Union allow you to start the sending process online and complete it at a physical store of your choice.
Sending money to your family, relatives, and friends using money orders is a safe and convenient option. You can purchase an international money order from any post office in the United States. The maximum you can send per money order is $700.
In Honduras, you can cash international money orders at the following institutions, Banco Ficohsa, Elektra–Azteca, and Banco Mercantil. BAMER S.A. Together, they have locations totalling 543.
Whether you choose to send money via WorldRemit, Western Union, MoneyGram or Xoom, there is some information you’ll have to provide. The information varies from one provider to the other. Below is a general list of what will be required irrespective of the provider you choose.
You may be asked for more information such as the purpose and source of the funds. Providers are under strict regulations hence must pass on the rules to their customers.
Hondurans receiving money from abroad have different options available. However, two methods remain outstanding: direct bank deposits and cash collection from MTO locations.
Hondurans who have bank accounts can choose to have their loved ones deposit money directly into their accounts. When receiving large amounts of money, the banking system is the most reliable and safer.
Depending on the instructions the recipient has given the bank, they may receive an SMS notification when the deposit is made.
This method of receiving money is the most popular among Hondurans. Cash pick up locations for MTOs such as Western Union, MoneyGram, WorldRemit, Tranfast, TransferWise, and Xoom are in convenient locations like grocery stores, supermarkets, and fuel stations.
You can receive amounts of up to $1,500 with this method. However, if large amounts are involved, the best way is to deposit them immediately into a bank account. Also, when picking large amounts, have a trusted friend or relative to accompany you. Safety is of paramount importance.
After the transfer is complete and the money gets to Honduras, the next step is to pick it up. For direct bank deposits, there are no documents you have to provide because the money is already in your account. When collecting your cash from agents, the following information will be required.
In some circumstances such as in large or frequent transactions, the recipient may be asked to state the source and usage of the funds. These extra measures are ways to combat fraud and funding of criminal cells.
More than 20 per cent of households in Honduras receive remittances. Over half of these households are in urban areas while slightly over 40 per cent are in rural areas. There are different reasons why Hondurans in the diaspora send money home and below are some of the top ones.
This category takes the lion share of remittances. Over 70 per cent of money sent is used to finance basic consumption, covering expenses such as food household items and clothes. One in five Hondurans lives in extreme poverty and remittances form an important part of household income.
The Ministry of Health in Honduras provides medical care to over 90 per cent of the population. However, most of this care is available in urban areas and developed cities. Rural populations find it difficult accessing quality care or any care at all. Many of them rely on remittances to travel to cities for medical treatment or to pay for private healthcare.
The level of educational attainment in Honduras among recipients of remittances is much higher for primary education at 56 per cent compared to 52 per cent for the general population. The public education in Honduras is free, but most Hondurans prefer the high quality but a little pricey private education system.
Hondurans abroad send money to their families to help in the purchase of lots of land for housing construction. For those who are unable to buy houses in cash, they usually go for mortgages and the pay up the loans over time.
Apart from family-related expenditures, Hondurans may send money home for social contributions. For instance, some of their contributions help to finance weddings, funerals, festivities, community development and so forth.
As noted above, money transfer services have gained traction and Hondurans are increasingly embracing MTOs. There are top reasons why money transfer service providers are gaining popularity in both rural and urban remittance markets.
Funding the transfer can be done in one of three ways: a credit card, a debit card, or a bank debit. Once your transfer is paid for, you can send money online on the provider’s website or using a downloadable mobile app
When sending money to Honduras, you need to think through and consider certain factors. Below is a list of a few of the considerations to make.
Therefore, the next time you are sending money to Honduras, check across the various providers, their fees, exchange rates and speed of transfer. Such a cross-comparison ensures that you make the right decision on the MTO to use when sending money home.
Sending money anywhere else in the world is as easy as sending money to Honduras. If you’re looking to send money to another country, here is the list of the most popular destinations.
Jonathan is the founder and editor of MoneyTransfers.com. Jonathan is highly experienced in the currency transfer market, having previously worked in the FX trading industry, alongside being an avid traveller. Using his knowledge he identified a need for transparency and further education to help people save money on their money transfers, leading to the creation of MoneyTransfers.com