Billions in Motion: Latino Immigrants, Remittances and Banking

This paper discusses the money remittance trends being observed amongst the Latin American population living in the United States of America. The paper states that the money transfer has steadily increased over the years, and currently, it is approximately over US $10 billion.

The paper identifies the following technological and social constraints hampering the use of more efficient money transfer mechanisms by the Latin American expatriates:

• The emigrant population is mostly from poor families and has little knowledge about the technological advancement in money transfer processes;
• Cash transfer and electronic transfers are the most preferred mode of remittances;
• ATM use is getting popular but is not the most used remittance channel;
• The banking infrastructure in Latin America is not strong enough to allow money transfer at all locations;
• Minimum balance requirements for maintaining accounts make the banking channel a not-so-popular remittance channel.

The paper explores possibilities of managing the high cost and makes following observations and recommendations:

• Increased competition amongst the banks with increasing size of remittances will reduce the banking costs and increase the usage of banking channel by emigrants;
• The banks should provide training to the emigrants in using the advanced remittances facilities;
• Banks should accept the identity card as a minimum requirement for opening the bank account;
• American banks should invest in improving the banking infrastructure in Latin American countries.