Traditional remittances are under attack by online competitors

Remittances to Latin America totaled $65 billion in 2014, a historical high, finally surpassing pre- financial crisis levels. Recovery of the US economy in 2013 and 2014 resulted in resumed growth of remittances to the region, particularly to Mexico and Central America, which achieved 8% and 7% growth in 2014 respectively. South America, in contrast, receiving most remittance inflows from Spain, saw remittances decline 1% in 2014, the result of persisting economic lethargy in the remitting country.1 Within the US, increased migration flows, especially from Central America, climbing wages of remitters, and declining sending fees all contributed to positive growth in 2014. The US-Mexico corridor is the bread and butter of LatAm remittance providers, alone representing 40%+ of all money sent to Latin America. 

The remittance space is competitive, with 15+ providers serving the US-Mexico corridor alone. But despite decades of success, market incumbents are now coming under threat by online providers. 

 

Read more... Download PDF 

Contact the author Lindsay Lehr at llehr@americasmi.com