One of the best known, documented and analyzed remittance corridors is that between the United States and Mexico.
The U.
S.
- Mexico Remittance Corridor has transformed radically in the last ten years from a corridor where informal funds transfer systems were prevalent to a corridor dominated by formal mechanisms for remittance transfers.
This corridor is now characterized by more competition offering reliable, fast and formal remitting options at lower costs to a growing population of Mexican immigrants in the United States.
Remittance flows parallel long-established migration patterns between Mexico and the United States.
Funds transferred to home communities reflect a continuing bond between migrants and their homes.
In the U.
S.
-Mexico corridor cultural familiarity and reliability are key factors along with cost in choosing a funds transfer system.
Given the social context of remittances, cost is not the only determining factor for choosing a funds transfer system among Mexican migrants.
Many migrants are as concerned with the perceived reliability of a channel as with the price and continue to prefer channels that are culturally familiar or operated through personal contacts, even if they are more expensive.
Nevertheless, despite cultural inhibitions, improved access to formal channels has encouraged large numbers of Mexican migrants to shift away from informal channels.
Migrant access to formal channels has improved for several reasons.
One reason is better awareness in migrant communities about remitting options, such as services that allow for sending money online or sending money by phone.
In 2001 Presidents George W.
Bush and Vicente Fox devised programs to reduce the cost of sending remittances abroad, as part of the Partnership for Prosperity Program, an initiative to promote economic development.
New remittance programs, such as Directo a Mexico, aim to bring Mexican migrants into the mainstream U.
S.
financial system, regardless of immigration status.
In 2006 the World Bank reported immigrants from the United States send a total of $42 billion to their home countries, a 27 percent increase from 2000.
For Mexico, remittances are an important source of income.
Mexicans living in the U.
S.
sent a record $23.
1 billion back home in 2006, putting remittances third after oil and maquiladora (assembly plant) exports as a foreign-exchange generator for Mexico.
The Bush administration contends the money sent south can rebuild the Mexican economy and thus reduce immigration.
However, there is no evidence the inflow of money is reducing the outflow of people.
While the U.
S.
-Mexico remittances corridor has become strong and well-developed overall, regulatory impediments could stagnate the market's further expansion and development.
Inconsistencies and overlaps in the layers of regulations by U.
S.
authorities increase costs and inhibit market growth and the entry of new competitors.
Mexican regulations impede some institutions' access to payment systems.
Remittances to Mexico are not only an important source of external income for the country, but also allow migrants to exercise social and political influence on matters taking place in their home communities through groups such as Home Town Associations.
The U.
S.
- Mexico Remittance Corridor has transformed radically in the last ten years from a corridor where informal funds transfer systems were prevalent to a corridor dominated by formal mechanisms for remittance transfers.
This corridor is now characterized by more competition offering reliable, fast and formal remitting options at lower costs to a growing population of Mexican immigrants in the United States.
Remittance flows parallel long-established migration patterns between Mexico and the United States.
Funds transferred to home communities reflect a continuing bond between migrants and their homes.
In the U.
S.
-Mexico corridor cultural familiarity and reliability are key factors along with cost in choosing a funds transfer system.
Given the social context of remittances, cost is not the only determining factor for choosing a funds transfer system among Mexican migrants.
Many migrants are as concerned with the perceived reliability of a channel as with the price and continue to prefer channels that are culturally familiar or operated through personal contacts, even if they are more expensive.
Nevertheless, despite cultural inhibitions, improved access to formal channels has encouraged large numbers of Mexican migrants to shift away from informal channels.
Migrant access to formal channels has improved for several reasons.
One reason is better awareness in migrant communities about remitting options, such as services that allow for sending money online or sending money by phone.
In 2001 Presidents George W.
Bush and Vicente Fox devised programs to reduce the cost of sending remittances abroad, as part of the Partnership for Prosperity Program, an initiative to promote economic development.
New remittance programs, such as Directo a Mexico, aim to bring Mexican migrants into the mainstream U.
S.
financial system, regardless of immigration status.
In 2006 the World Bank reported immigrants from the United States send a total of $42 billion to their home countries, a 27 percent increase from 2000.
For Mexico, remittances are an important source of income.
Mexicans living in the U.
S.
sent a record $23.
1 billion back home in 2006, putting remittances third after oil and maquiladora (assembly plant) exports as a foreign-exchange generator for Mexico.
The Bush administration contends the money sent south can rebuild the Mexican economy and thus reduce immigration.
However, there is no evidence the inflow of money is reducing the outflow of people.
While the U.
S.
-Mexico remittances corridor has become strong and well-developed overall, regulatory impediments could stagnate the market's further expansion and development.
Inconsistencies and overlaps in the layers of regulations by U.
S.
authorities increase costs and inhibit market growth and the entry of new competitors.
Mexican regulations impede some institutions' access to payment systems.
Remittances to Mexico are not only an important source of external income for the country, but also allow migrants to exercise social and political influence on matters taking place in their home communities through groups such as Home Town Associations.
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