A report by the Multilateral Investment Fund “Remittances to Latin America and the Caribbean in 2013: Still Below Pre-Crisis Levels” shows there were USD 61.3 Bn in remittances to LatAm in 2013, flat from a year before and less than the USD 64.9 Bn sent in 2008. The organization estimates that remittances to the region could increase by 5 to 7% in 2014.
Central America (CA) and the Caribbean showed increase of funds while the rest of the region declined. Major countries for remittances were Mexico (USD 21.6 billion), Guatemala (USD 5.1 billion), Colombia (USD 4.1 billion), El Salvador (USD 4.0 billion) and the Dominican Republic (USD 3.3). Three quarters of the funds originated in US, followed by Spain.
The report shows there are an increasingly wide variety of services available to remittance senders, allowing them to make transfers using bank accounts and debit and credit cards.
Data from Envía Centroamérica, which studies the costs of sending remittances in the corridor between US and the countries of CA and the Dominican Republic and between Costa Rica and Nicaragua, shows costs for a USD 200 transfer stood at 5.1% (vs. 5.3% in 2012) and for a USD 500 transfer they were 2.9% (down 17.8% from 3.5% in 2012).
The most common remittances come from services that capture funds through payments cards and pay out in cash, rather than those that are deposited in the beneficiary’s account. One type of service that has grown in recent years involves capture in an account and subsequent transfer to the beneficiary’s bank account.