This report by the Migration, Remittances and Development Program at the Inter-American Dialogue analyzes the role of money transfer intermediaries on migrants remitting to Latin America and the Caribbean.
It explores the current modernization of the payments industry, specifically as it relates to the growth of digital payments. To further understand customers and mobile wallet demand we provide a glimpse into consumers’ use of mobile wallet services in Guatemala and Nicaragua.
We also look at trends in transfer costs and discuss the proposed changes to the ‘Remittance Rule,’ including the consequences they may have on remittance senders.
Key findings include:
- Digital or online-based remittance transactions represent at least thirty percent of all transfers to major countries.
- Transfers (online or offline) deposited into the home country relative’s bank accounts represent at least twenty percent of all transfers.
- Mobile wallets allow for capturing funds among unbanked individuals, including the remittance transfers they receive.
- Money transfer operators continue to offer the lowest transaction cost compared to other types or remittance service providers.
- Average transfer costs for sending USD $200 have remained stable at six percent.
- There is not a single factor that predominantly explains money transfer costs.