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Remittances, otherwise known as money transfers, are big business in Mexico. So much so that money transfers from the United States accounted for 2.5 percent of Mexico’s GDP or U.S. $26 billion in 2009.
What’s even more staggering is that over 70 percent of Mexican immigrants living in the United States send money back home to elder relatives—primarily parents and grandparents.
While this illustrates the strong and long-lasting ties Mexican immigrants have to their home country, it also highlights the importance of making this process quick and efficient for senders and providing families back home with easy and convenient access to funds.
MasterCard research on the U.S. to Mexico remittance corridor revealed some interesting insight into the senders and their families.
First off, the research shows that senders tend to be young, banked, and have an average household income of $33,000. The typical Mexican immigrant sender has lived in the United States for approximately 13 years and senders rely heavily on technology to simplify their daily lives. They are tech-savvy with 92% using their mobile phones on a daily basis.
On average, senders remit one-third of their salaries back home to Mexico each year. Those receiving the funds use them to pay for everyday expenses; 57 percent of the funds support basic needs such as groceries.
Remittance senders are eager to find more convenient ways to send money to their loved ones. Leveraging technology to simplify the remittance process can provide senders with an alternative to long lines and high fees while allowing them to support their families in Mexico.
Mobile phones with money-transfer capabilities could be the answer. In fact, one in four senders in the MasterCard study stated a strong desire to use their mobile phones to send remittances. I’ll bet that in the not too distant future, mobile phones that offer money-transfer capabilities will be strong contenders in the remittance space.
Christina Sommer is a Vice President in the Global Insights group of MasterCard Worldwide. She has 14 years of experience in the financial services industry, specializing in retail banking and payments strategy. Her current responsibilities involve applying market, consumer, and financial insights to improve business results for MasterCard and its customers globally.