Easier Ways to Transfer Money to Mexico

These days, the tracking of money transfers has increased significantly as influential policymakers and other researchers figured out the importance of documenting those numbers. In turn, those wiring money via the internet drastically help narrow the gap between formal and informal corridors. And when economists know exactly how that money received is spent, they’ll have an easier time knowing where to plug in money to help stimulate the economy.  That is why it is co important to continue to send money to Mexico and continure to support the local economy.

As in other parts of the world, the economy in Mexico is down and things don’t appear to be getting better. An article in the Wall Street Journal on May 21, 2009 titled Mexico’s Economy Slums: Dragged Down by U.S. states, “”Mexico’s economy shrank 5.9% in the first quarter from the fourth quarter of last year–showing the economy in its steepest decline since the depths of the country’s 1995 peso crisis.”

The tough financial times in the U.S. had a major impact on remittance to Mexico because while people are still wiring cash, it’s not nearly as much as in the past. When you look at a typical Mexican worker who wires cash you will note their goal is to better their standard of living in regards to their family and community by working to earn that extra income. The layoffs throughout the U.S. didn’t help the cause of these legal and illegal immigrants since those in the service and construction industry happened to be hit the hardest.

According to World Bank figures, over the last eight years transfers from the U.S. average $280-$370 a month and the longer the migrant stays in the country, the less often they transfer money. Despite the declining numbers, people continue to wire at an average of 20-30 years.

The economy in Mexico has become very reliant on exports to the U.S. – manufacturing in Mexico makes up one fifth of the GDP – but unfortunately the demand for those exports has gone down as well. To make matters worse, the recent swine flu outbreak has had a negative effect on the tourist industry in Mexico, causing a $4 billion dollar decline since tourists no longer feel comfortable coming to the birth place of the epidemic. Usually hotels fill up approximately 74% of the rooms but in May occupancy sat at a mere 29%.

So how does this have an impact on money transfers? While the U.S. economy isn’t too affected by the decline in migrant worker spending, many rural regions in Mexico have taken a hard hit. Savings in small towns is down and all over, housing projects are abruptly cut short, along with the absence of people at transfer lines.

Recently the demand for more clear-cut methods to access remittance has been a way to help tackle the declining economy. Immigrants have searched for easier ways to keep track of the transferred funds while avoiding banks associated with the Mexican government.

Nowadays more people than ever are using the web as a method of money transfer and for good reason – this method works perfectly for those sending money on a month-to-month basis. The recipient is simply receives a debit card which is delivered to their home and can be replenished at any time. And being able to track where the funds are going is key in making the most out of cash transferred to Mexico.

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