Among the world’s top recipients of remittances in 2018, Mexico ranked third at $35,659 million. Most of the remittances (95 per cent) came from the United States which hosts approximately 31.8 million people of Mexican origin.
According to the Bank of Mexico, the number of transactions through formal remittance channels totalled 104 million in 2018, 6 million more than in 2017. The average size of remittance also grew by 4.21 per cent to $322 in 2018 compared with $302 in 2017.
Sending money to Mexico is simple and easy. Follow these steps to get started.
There are multiple ways to easily send and receive money in Mexico 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.
Records maintained by the Bank of Mexico show that 98 per cent ($34.95 billion) of the remittances to Mexico were carried out through electronic funds transfer (EFT). The remaining two per cent were dispatched by money order, cash and cash-like instruments. Slicing and dicing the data shows the specific channels used to send the money.
Mexico has a total of 48 banks, seven of which control 78 per cent of the total market share. Despite delays, bank-to-bank transfers remain a reliable and secure method of sending money to Mexico. On average, a bank transfer can take up to 4 days to get to the recipient.
When the bank you are sending from has no established financial relationship with the recipient bank or the currency you are sending from is different from the destination currency, a correspondent bank acts as an intermediary. This intermediation may cause transfer delays.
Other factors that slow down international wire transfers include the source currency, payment method, the effect of weekends and holidays, cut-off times and timezones. Apart from time, banks charge higher fees and their exchange rates are unfavourable.
Money Transfer Operators (MTOs) have increased their dominance on most Mexico transfer corridors. These services bring cost-efficiency, timeliness, and flexibility in sending money to Mexico. We’ve put together a list of top 10 money transfer companies, however some of the notable companies offering money transfer services you can use include Western Union, MoneyGram, Ria, Xoom, TransferWise, and WorldRemit.
Signing up for an account with MTOs is very simple. Depending on the provider, you may need to provide your name and email address only. Other providers may ask you for a few verification details to set you up. You can sign up on the website or through a downloadable mobile app.
Once you are set up, pay for your transfer using a debit or credit card, bank transfer or cash deposit. You can send freely through the website, mobile app or SendBot for MoneyGram. When sending money using money transfer services, there are a couple of options you can choose from:
Bank Transfer – This sending option is similar to bank wire transfer. However, the difference is that the transfer moves from an MTO to a bank on the MTO-bank platform. Instead of taking days, bank transfers can take a few hours. Some of the Mexican banks and non-bank institutions that money transfer service providers have partnered with are Grupo Elektra, BanCoppel, BBVA Bancomer, and Banco Azteca.
Cash Pickup – This is the second option you can use to send money to your loved ones in Mexico. Depending on the provider, cash pickups can be available within minutes. If you choose WorldRemit, the recipient can pick up the cash in any of the 7,800 locations on the provider’s payout-network. Western Union has 42,000 locations while MoneyGram has partnered with banks and OXXO, a chain of convenience stores.
This money transfer service offered by the United States Postal Service (USPS) replaces the international money order. The sending limit per day currently stands at $1,500. When sending the money, the USPS will give you a currency translation rate. Sending money through this method takes only 15 minutes.
In 2014, the government of Mexico ended the agreement that authorised the USPS to sell paper money orders to Mexico.
Despite being one of the top destinations for remittances, sending to Mexico is not any different from sending to other countries. The US-Mexican border has been a conduit for illegal drugs and human trafficking. The effect this has had is that every transfer to Mexico requires proper documentation. Some of the information you’ll need to send money include:
You may be asked to provide more information to support your transfer, especially for large and frequent amounts.
Your loved ones in Mexico can receive the money you send in several ways depending on their location and the provider you use. Most emigrants are from deprived rural households in Mexico and remittances are directed back to areas such as Chiapas, Guerrero, Puebla, and Oaxaca.
Whether your family and relatives live in the north, the north pacific coast, the Bajio, the south pacific coast, the south, the gulf or Central Mexico, they can receive remittances in several ways.
Bank Account Deposit – Half the population in Mexico is unbanked. However, the government is in a drive to extend financial services to every person in the country. This move will make it feasible for everyone to own an account and receive direct deposits. That said, receiving remittance through bank transfers is common in Mexico.
Physical Cash Collection – Using the network of agents and payout partners in Mexico, money transfer operators like Xoom, Western Union, MoneyGram, WorldRemit, TransferWise, and Remitly make it possible for households to collect cash from locations near them. MoneyGram has 39,000 locations while Transfast has 20,000 cash pickup locations.
The diverse nature of the Mexican population ranging from the very rich to the rural poor has made money transfer service providers standardise the information required to receive money. Despite the variations based on providers, here’s the information that will be needed.
On a case by case basis, authorities may ask for additional information. The size and frequency of transactions are triggers for such measures.
The reasons Mexicans in the diaspora send money home, vary depending on the unique circumstances of each sending unit and receiving household. Research studies show several reasons for the record remittances flowing into Mexico. Some of the top reasons are:
Research on migration, development and remittances in rural Mexico proves that 1 in 5 households in the country depends on inflows from the diaspora. The money is used to buy subsistence items mostly food. The most dependent population on migrant income in Mexico is Guadalupe at 73 per cent.
The money sent from the diaspora helps to offset household credit constraints. As a result, families get a reprieve from immediate and pressing needs. Such households are likely to send their children to school. Generally, children from migrant households complete more years of school in Mexico with girls moving from 0.2 to 0.9 years.
Mexicans abroad are still attached to their home economy and the need to improve the long-run living standards of their families. One of the ways they achieve this objective is through investments in assets such as land, livestock, and financial products. The government has also come up with programs such as 3×1 program and Paisano Invierte en tu Tierra. These programs offer investment opportunities to Mexicans abroad while developing rural Mexico.
Through government-sponsored housing programs and private sector initiatives such as Contrumex, Mexicans abroad can access mortgages and build houses in the country. The housing program has so far given over 5,000 credits to Mexicans in the diaspora. Some of the money sent home is to repay such facilities.
The public and private sectors are both responsible for the provision of healthcare in Mexico. Even with the Universal Healthcare instituted in 2009, accessibility and quality of care remains a challenge. Mexicans in the diaspora send money to their loved ones to enable them access quality private care or upgraded public healthcare.
Some of the remittances are for festivals like Día de Muertos, Dia de la Independencia, Guelaguetza Festival, Día de la Virgen de Guadalupe and for weddings of family, relatives and friends.
As mentioned earlier, EFTs account for 98 per cent of the money sent to Mexico. The transfers are a combination of bank-to-bank and MTOs to bank transfers. The growth of money transfer service providers has brought many benefits you can enjoy while sending to Mexico.
Some of the reasons you should try an MTO when sending your next remittance to your loved ones at home are:
Some transfer corridors such as the US-Mexico and Canada-Mexico routes, take up more than 95 per cent of the transfer volume. Sending money through such corridors may seem so obvious. However, there are considerations you should make when sending money to Mexico.
With an increase in MTOs, sending money to Mexico should be a breeze. However, you need to look across the various providers, their rates, speed, and convenience before sending. You should also watch the economic movements and geopolitical shifts between Mexico and the U.S. to help you plan your remittances.
Sending money anywhere else in the world is as easy as sending money to Mexico. 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