US banks going after Caribbean remittances
AP
Sunday, December 25, 2005
MIAMI (AP) - US banks have raced to join the remittance industry in recent years, seeking a share of the billions of dollars immigrants send to their native countries, especially around the holiday season.
But as they try to get a piece of the business, many immigrants are reluctant to shift from the smaller mom-and-pop stores and the money transfer services they are accustomed to using to send money home.
With remittances to Latin America and the Caribbean estimated to be a US$45 billion (J$2.9 trillion) industry, and with Jamaica alone having received US$1.5 billion ($98 billion) in 2005, it is no surprise US banks are interested. Many also see remittances as a way to attract new customers to other services.
In the last year alone, major banks have unveiled an array of new services to court immigrants away from the hundreds of money transfer services operating in the United States. Wachovia Bank unveiled a card that allows families in Latin America and the Caribbean to withdraw money from an ATM linked to US bank accounts. Wells Fargo Bank expanded its money transfer service to El Salvador and Guatemala, and Bank of America announced it was offering free money transfers to Mexico.
The industry's efforts have won it an estimated 3 per cent of the market, according to remittance expert Manuel Orozco, of the Inter-American Dialogue, a think tank based in Washington, DC.
But despite the banks' efforts, immigrants continue to shy away from sending money through banks for a variety of reasons. In many cases, banks have succeeded in attracting more Hispanic customers but not in getting them to send money, Orozco said.
"They don't think of the bank as a place to send money. They think of the bank as a place to save money," he said.
Many immigrants, especially those in the US illegally, do not have forms of identification required to do business with banks. Some US banks now accept consular identification cards from countries such as Mexico, Guatemala and Argentina, but customers still need a backup form of ID such as a driver's licence or birth certificate.
Cost is another concern. A report released in December by the national nonprofit Appleseed Center for Law & Justice found that while the entry of banks into the remittance business helped bring down the price of money transfers, banks did not always offer the cheapest services. The average cost of sending US$300 (J$20,000) was about US$15 (J$1,000), the report said.
Copyright� 2000-2001 Jamaica Observer. All Rights Reserved.
AP
Sunday, December 25, 2005
MIAMI (AP) - US banks have raced to join the remittance industry in recent years, seeking a share of the billions of dollars immigrants send to their native countries, especially around the holiday season.
But as they try to get a piece of the business, many immigrants are reluctant to shift from the smaller mom-and-pop stores and the money transfer services they are accustomed to using to send money home.
With remittances to Latin America and the Caribbean estimated to be a US$45 billion (J$2.9 trillion) industry, and with Jamaica alone having received US$1.5 billion ($98 billion) in 2005, it is no surprise US banks are interested. Many also see remittances as a way to attract new customers to other services.
In the last year alone, major banks have unveiled an array of new services to court immigrants away from the hundreds of money transfer services operating in the United States. Wachovia Bank unveiled a card that allows families in Latin America and the Caribbean to withdraw money from an ATM linked to US bank accounts. Wells Fargo Bank expanded its money transfer service to El Salvador and Guatemala, and Bank of America announced it was offering free money transfers to Mexico.
The industry's efforts have won it an estimated 3 per cent of the market, according to remittance expert Manuel Orozco, of the Inter-American Dialogue, a think tank based in Washington, DC.
But despite the banks' efforts, immigrants continue to shy away from sending money through banks for a variety of reasons. In many cases, banks have succeeded in attracting more Hispanic customers but not in getting them to send money, Orozco said.
"They don't think of the bank as a place to send money. They think of the bank as a place to save money," he said.
Many immigrants, especially those in the US illegally, do not have forms of identification required to do business with banks. Some US banks now accept consular identification cards from countries such as Mexico, Guatemala and Argentina, but customers still need a backup form of ID such as a driver's licence or birth certificate.
Cost is another concern. A report released in December by the national nonprofit Appleseed Center for Law & Justice found that while the entry of banks into the remittance business helped bring down the price of money transfers, banks did not always offer the cheapest services. The average cost of sending US$300 (J$20,000) was about US$15 (J$1,000), the report said.
Copyright� 2000-2001 Jamaica Observer. All Rights Reserved.
