Remittances to Mexico expand, new Federal Reserve program helps

The Wall Street Journal (subscription required) reported on 10/11 on advances in the remittance business, which I have posted about in the past. Remittance volume to Mexico this year may exceed $23 billion.
“Dubbed “Directo a Mexico,” the [new] remittance program enables U.S. commercial banks to make money transfers for Mexican workers through the Federal Reserve’s own automated clearinghouse, which is linked to Banco de Mexico, the Mexican central bank.” User fees: as little as $2.50 a transaction.
“To use the service, a Mexican need only possess a matricula consular, an I.D. issued by the Mexican consulate in most major U.S. cities to those with proof of Mexican birth or citizenship, or a picture I.D. card issued by the U.S. or another foreign government.”
One desired effect of the program is to increase the use of banks by Mexicans on both sides of the border. “…One of the Federal Reserve Bank’s goals is to use the program as a springboard for drawing hundreds of thousands of immigrants into the formal U.S. banking system since commercial banks require that those wanting the service first open a savings account.
“Last month, the program was expanded to enable migrants in the U.S. to open an account for relatives to whom they plan to send money. A bank teller in the U.S. can open the account remotely on a Web site set up by Mexico’s Banco del Ahorro Nacional y Servicios Financieros, the development bank known as Bansefi, which has a vast network of branches in urban and rural areas.”
For undocumented workers, “the Federal Reserve’s brochure poses the following frequently asked question: “If I return to Mexico or am deported, will I lose the money in my bank account?” The answer: “No. The money still belongs to you and can be easily accessed at an ATM in Mexico using your debit card.”

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