September 14, 2005
The Center for Financial Services Innovation
Jennifer Tescher, Arjan Schutte, and Katy Jacob 
 
The money flowing from the United States to Mexico currently represents the largest remittance market in the world. At the current rate of growth, these immigrants are expected to send over $20 billion to Mexico in 2005 and spend an estimated $948 million in fees and other costs getting it there. To provide a more complete picture of the impact of the exchange rate spread on pricing, Appleseed Centers collected and analyzed exchange rate data for wiring money from the United States to Mexico. Our study revealed that unpredictable and undisclosed rates make it extremely difficult for consumers to make informed decisions about remitting money to Mexico, and keep the market from operating efficiently for three primary reasons: lack of marketplace transparency, lack of consistent access to correct pricing information, and lack of standardized pricing disclosure practices. Our report offers three recommendations on how to best handle the problem, any one of which would build greater transparency  and consumer protection  into the remittance market.
 
File attachments:

• Creating a Fair Playing Field for Consumers (application/pdf)