While the remittances service landscape is constantly changing, one element that remains consistent is the need for families and friends to stay connected. Sending money, or remittances, back home to loved ones is one of many ways cross national Latino families support each other and keep ties strong. Whether families are sending money back home for special occasions or helping family and friends overseas during emergency situations, it is crucial to know what to look for in a remittances service provider.
Today, there are many remittance options that are available, including sending money through remittance companies, online service providers, prepaid card solutions, and financial institutions. There also are many factors to consider including fees, limitations on fund transfers, customer service and corporate responsibility. With so many options, remitters need to know what to look for in a remittance partner so that their money will arrive safely, promptly and while using a trusted provider.
Money Transfer Companies
Latin American remittances are sent through money transfer companies. While these companies have adapted to the needs of remitters by offering convenient locations and hours, they tend to charge higher fees per transaction and less favorable exchange rates.
Establishing a relationship with a financial institution can provide a number of additional benefits for immigrants. Many financial institutions offer reduced or even waived remittances fees for customers who have an established relationship.
In 2001, financial institutions began accepting government issued ID card ÔÇô Matricula Consular ÔÇô as a primary form of identification to open bank accounts. This helped pave the way for financial institutions to compete in the remittance market.
Fees are important to consider and vary from company to company. Remitters should ask companies for a complete disclosure of information on costs. For example, is there an account set-up fee? What is the transfer fee? What is today's exchange rate? Are there additional fees charged (as a percentage of amount sent) when a remittance exceeds a specific amount.
Make sure to inquire about limitations. Companies have various limitations when it comes to sending money. Based on their personal needs, remitters may want to know how quickly the money will get to their beneficiaries and how much they can send at one time.
Remitters should look for companies that have a designated 800-number for customer service and offer various channels for sending money, including in person counters/tellers, online or through a phone bank. Also look for institutions that deploy innovative platforms that improve speed and security of their money transfer.
Financial literacy is key to helping immigrants succeed financially. Remitters should select a company that offers free (and not product based) financial literacy to raise awareness about money matters and inform them of their consumer rights involving remittance and financial transactions. Some literacy programs can be found online and are free, like El Futuro en Tus Manos, which can be found at www.elfuturoentusmanos.org.
Does your remittance provider support organizations and events that are geared to help their community succeed? Do they truly care about their community or are they only interested in selling them a service. Remitters should request information on the level of engagement that the institution they select has with their community.