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  • Writer's pictureJaime González Gasque

Key opportunities to digitize remittances in Latin America and the Caribbean



  • Overall, remittances in Latin America have grown at a faster pace, 10% annually since 2014 compared to 4% globally.

  • The United States-Mexico corridor is the largest remittance channel in the world, with a volume in 2023 of $65 billion.

  • 2023 should end marking a turning point in which cash remittances are expected to reach their all-time high, declining in favor of digital options.


MIAMI - March 21, 2024 - Mastercard today published a report on the state of cross-border payments, also known as remittances, in Latin America. Remittances are key to strengthening financial inclusion in the region, boosting economies and alleviating poverty, as they often serve as an essential source of income for people in low- and middle-income communities. According to the United Nations, 800 million people around the world (approximately one in ten globally) live in households that receive international remittances. In Latin America, remittances have grown faster than worldwide (10% annually since 2014 compared to 4% worldwide).


In 2022, the volume of formal remittances in Latin America reached $146 billion, more than double that of a decade ago, and a 25-fold growth in the last 30 years. According to projections, 2024 will mark a shift towards greater speed, simplicity and security as digital remittances begin to surpass sending physical money across borders. Thanks to years of accelerated digitalization, Latin American consumers now have high mobile penetration, greater Internet access and fewer unbanked people, which has driven the growth of digital remittances in the region. In fact, as these trends continue to shape the digital agenda in Latin America, they are expected to generate an increase of $20 billion in digital remittances by 2026.


In recent years, traditional providers have enabled digitalization and given way to new players in the industry, including fintechs, digital wallets, blockchain companies and other technology companies, responding to trends seen in the American remittance industry. Latin:


The United States-Mexico corridor is the largest remittance channel in the world, with a volume for 2023 of $65 billion.


In El Salvador, 2 out of every 10 families that receive remittances live in poverty.


In Guatemala, at least 1 in 3 households rely on remittances as their main source of income.


In Honduras, remittance recipients represent 50% of all households.


In South America, inflation and political instability in the region are drivers of migration and remittance flows, which often use fintech and blockchain to avoid the problems that arise when using the traditional system.


Puntos débiles para la adopción


A pesar del enorme volumen y el impacto positivo de las remesas, el sector sigue enfrentándose a importantes retos que limitan la plena digitalización y adopción, como la falta de transparencia, confianza y seguridad en el sistema; la escasa experiencia digital de los usuarios y la lentitud de las transacciones. Además, la regulación es quizás uno de los problemas más graves, dada la falta de coherencia jurídica, reglamentaria y operativa de las diversas jurisdicciones mundiales.


También sigue existiendo una brecha de exclusión financiera que afecta a las comunidades desatendidas o no bancarizadas. Según el informe global de Mastercard Borderless Payment 2023, más de un tercio de los encuestados afirma que sus familias en casa tienen opciones limitadas para acceder al dinero que envían, y casi uno de cada cuatro informó que su familia debe viajar grandes distancias para acceder a su dinero.


Esto revela la exclusión financiera y digital, así como el subdesarrollo de la infraestructura financiera y digital (por ejemplo, la falta de cobertura 4G, la baja penetración de teléfonos inteligentes y la ausencia de bancos o agentes minoristas de remesas) presentes en la región.


Prepare for the future of remittances


To meet consumer demands and achieve the digital advancements needed to drive remittance adoption, businesses and providers must:


Adapt digital solutions to a cash environment. Remittance companies must allow recipients to use the money however they wish: digitally or in cash.


Provide transparency and security in transactions, while eliminating worries. Companies must clearly communicate prices before executing a transaction, as well as indicate the expected time frame for settlement.


Build trust through regulatory compliance and digital innovation. Companies must streamline customer onboarding and reduce processing time with digitized customer insights tools.


Offer rewards to loyal customers and financial education. Vendors must share educational information and offer points, miles, discounts, gift cards and other benefits after transactions.


Provide daily value and clear convenience versus cash. Providers should emphasize the convenience of digital payments and demonstrate why digital remittances and cross-border services bring more everyday value.


Mastercard's innovative technology and solutions allow its customers to send money and data quickly and securely. Using Mastercard's portfolio of international money transfer solutions, Mastercard Move, participating financial institutions can offer their customers international payments to more than 180 countries. This includes a global payment network of over 150 currencies that reaches 95% of the world's banked population. Mastercard Move reaches nearly 10 billion endpoints worldwide, including bank accounts, cards, wallets and cash payment locations. The portfolio combines the power of Mastercard's existing and future money transfer capabilities, including Mastercard Send and Mastercard Cross-Border services.


Scope and methodology of the research Mastercard partnered with PCMI, a payments industry market intelligence firm, to assess remittances in Latin America. The study markets include Mexico, El Salvador, Guatemala, Honduras, Brazil, Argentina and Colombia, compared to a broader global context. This research was carried out between October and December 2023, and consisted of obtaining public data resources and conducting 10 in-depth interviews with six companies, including banks, traditional and digital money transfer operators (MTO), retailers, technology enablers and Mastercard executives.


Andrea Denadai, Mastercard

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