One the United States largest banks announced earlier this week that it would be expanding its remittance services in El Salvador and easing the costs of sending money to the Central American nation, bucking the trend of many other banks and wire transfer services in the U.S. who have cutback or let go of their international money transfers.
Wells Fargo announced it added Scotiabank and Remesas BAC Credomatic to its network of ExpressSend payout locations in El Salvador, bringing the number of payout locations in the country to more than 500, along with more than 1,200 ATMs.
“Remittances like those provided by Wells Fargo’s ExpressSend service are a vital part of El Salvador’s economy – they account for 16.5% of the country’s GDP – and many families rely on them as a source of income,” said Daniel Ayala, executive vice president and head of Wells Fargo's Global Remittance Services, according to Market Watch. “Our customers want to make it as convenient as possible for their friends and family to receive the money they send, and this expansion will make it even easier for those beneficiaries to receive their money.”
The ExpressSend service allows customers to send as much as $1,500 per day to El Salvador with a trasnaction fee of $7. The funds are dispensed in U.S. Dollars and made available for cash-pick up or deposited to a beneficiary’s account.
“Wells Fargo has further invested in its remittance network and added opportunities for recipients to access other financial services,” said Manuel Orozco, a senior fellow at the Inter-American Dialogue think tank in Washington D.C.
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The move by Wells Fargo comes as new federal regulations aimed at cutting the flow that funds terrorists and drug trafficking organizations put increased pressure on banks to monitor the money moving through their systems or else face substantial penalties.
Latin America, along with Africa, is expected to be the region hardest hit by the news, with Mexico alone accounting for nearly half of the $51.1 billion in remittances sent from the United States in 2012.
Banking giants JPMorgan Chase and Bank of America both dropped their low-cost services that allowed Mexicans to send money home, and Spanish bank BBVA is purportedly mulling over selling off its unit that wires money to Mexico and across Latin America.
For Mexicans living in the U.S., probably the biggest remittance setback is Citigroup’s Banamex USA shuttering many of its locations in border states like Arizona, California and Texas and stopping that arm of its business in light of a U.S. federal investigation related to money laundering controls.