June 08, 2004
New from Pew: Money Transfer Study
The Pew Hispanic Center has just released a detailed study on money transfer to Latin America. The study coincides with the G8 Summit meeting in Sea Island, Georgia where money transferring will be on the agenda. Facilitating money transfer is a big issue, particularly given that it’s a major source of revenue for developing nations. Some of the findings:
- Since the late 1990s the cost of sending a $200 remittance to Mexico has fallen by half from about 15 percent of the amount sent to 7.32 percent in early 2004. However, most of the reduction took place at the beginning of this time span. By 2001 the cost stood at 8.07 percent and the declines have been minor since then. Meanwhile, the amount of money sent to Mexico has increased dramatically from $9.2 billion in 2001 to $13.2 billion in 2003, a growth of 43 percent.
Despite substantial marketing campaigns and very large investments over the past three years, U.S. banks have only captured a small fraction of the remittance transfer market. The four largest banks in this field -- Citibank, Wells Fargo, Harris Bank and Bank of America -- conduct less than 100,000 remittance transactions a month. The vast majority goes to Mexico. In 2003, an estimated 40 million remittance transactions carried money from the United States to Mexico, which means the banks have captured about three percent of that market.
Marketing campaigns designed to encourage Latino immigrants to open accounts with banks and credit unions, often with remittance services as an enticement, have had somewhat more success. About 400,000 new accounts have been opened as a result of these efforts. That is about 5 percent of the estimated eight million Hispanic immigrants who currently do not have bank accounts.
Posted by dmorse at June 8, 2004 06:28 PM