Digital Remittances To Mexico Overtake Cash For First Time

After Maura Fonseca moved to Houston from Mexico successful 2011, she often waited hours successful statement astatine Western Union to nonstop money to her 3 children and her mother. The fees were truthful steep she sometimes had to get money to salary them.

These days, Fonseca sends money location utilizing Felix Pago, a WhatsApp-based integer app.

“It’s truthful overmuch amended because it’s cheaper, instantaneous and I don’t person to time off my house,” said nan 60-year-old who operates rental properties successful Houston. “Now I tin nonstop money from my bed.”

Fonseca is portion of a broader translator successful really migrants successful nan US nonstop money to Latin America. Policy changes and shifting demographics are accelerating nan move to integer transfers, which overtook rate successful nan US-to-Mexico remittance corridor for nan first clip successful 2025, according to Mexico’s cardinal bank.

The move distant from rate — wherever senders and recipients usage beingness pickup locations — is reshaping an manufacture long-dominated by accepted companies for illustration The Western Union Co. and Moneygram International Inc. As migrants move to apps aliases slope transfers to nonstop money to Latin America and nan Caribbean, fintech firms for illustration Felix Pago, Remitly and Wise, on pinch cryptocurrency exchanges for illustration Bitso, are trying to seizure a bigger portion of a Latin American marketplace worthy much than $160 cardinal a year, astir $62 cardinal of which goes to Mexico.

“We’re seeing a clear inclination toward nan digitalization of remittances, particularly driven by younger generations,” said Dalia Grinberg, firm affairs head astatine Mexican crypto speech Bitso.

Key to nan fintechs’ transportation to caller users: while nan mean costs of sending remittances globally is astir 6.4%, integer transactions tin autumn to astir 4%, according to nan World Bank, and are often processed instantly aliases wrong nan aforesaid day.

Remittances are captious to nan economies of Latin America. In Mexico, money transfers from nan US totaled astir about 3.5% of gross home product. Economists person warned that a caller US taxation connected remittances could dent Mexico’s economy.

Remittance flows to Mexico fell 4.6% past year, snapping an 11-year maturation streak, according to estimates by Spanish slope BBVA. A stronger Mexican peso has lowered nan worth of US dollars payments, and changing migration patterns person besides squeezed remittances.

Cash has historically dominated payments because galore remittance recipients successful processing countries beryllium to lower-income households pinch constricted entree to general financial services. In Mexico, only astir a 3rd of adults tin entree general credit, according to authorities data. Without slope accounts aliases costs cards, complete 70% of nan organization uses rate for regular transactions.

Fonseca, who recommends nan Felix Pago app to friends and family, said she still drives immoderate clients to remittance stores because they stay skeptical of physics transfers.

“Some users for illustration going to a beingness antagonistic they’ve known for 20 years alternatively than trusting a mobile app, particularly if they don’t understand what’s down nan screen,” said Bitso’s Grinberg.

But argumentation changes are forcing migrant communities to adapt. Aggressive US migration enforcement has made immoderate migrants wary of visiting costs stores tied to migrant communities, said analysts. Mobile transfers let users to nonstop costs without leaving home.

“There is simply a batch of fearfulness of going to wherever a batch of nan independent unit locations are,” said Gus Gala, a fintech and crypto expert astatine Monness, Crespi, Hardt & Co.

Cash is besides getting much expensive. Since January, nan US has imposed a 1% taxation connected rate remittances. Bank transfers and different integer payments are exempt nether nan measure, which was meant to steer group toward much traceable financial transactions, opportunity manufacture executives and analysts.

Western Union has flagged nan taxation arsenic a consequence facet to its user money transportation business. Transfers involving Latin America and nan Caribbean generated astir $385 cardinal successful 2025, aliases 11% of nan segment’s revenue, down from 12% successful 2024.

To adapt, nan Denver-based institution has promoted integer transfers. About 39% of transactions astatine Western Union were conducted digitally astatine nan extremity of 2025, according to institution data, up from 32% astatine nan extremity of 2024.

Western Union didn’t respond to requests for comment.

Moneygram said it’s noticing accelerating maturation successful integer remittances. The Dallas-based institution has recorded a 40% boost for nan twelvemonth truthful acold successful nan measurement of payments connected its integer level compared pinch nan aforesaid play past year.

Demographics are reinforcing nan displacement toward integer payments. Braulio Garzon, who operates 7 Western Union-partnered remittance locations successful New York City, said astir group who travel into nan stores are successful their 50s and 60s.

“Young group are nan early of nan financial work business,” he said.

Cabo writes for Bloomberg.