Fed seeks to boost international remittances to Mexico

Northwestern Financial Review, Oct 1-Oct 14, 2005

The Federal Reserve Banks and the Banco de Mexico are introducing Directe a Mexico, a joint, Spanish-language marketing effort designed to help U.S. financial institutions increase their historically small share of the rapidly growing U.S. to Mexico remittance market.

Directe a Mexico provides financial institutions with promotional tools designed to encourage and assist their customers in using the Federal Reserve Banks' FedACH International Mexico Service. U.S. banking customers benefit from secure transfers, low fees and the wholesale foreign exchange rate being applied to every payment - regardless of payment value.

"FedACH International Mexico Service will further link and integrate communities and their financial institutions in the United States and Mexico, with the added benefit of providing the lowest remittance transaction cost in the market," said Manuel Orozco, senior associate of the Remittances and Rural Development Program at the Inter-American Dialogue based in Washington, B.C.

FedACH International Mexico Service is offered as part of the Federal Reserve Banks' suite of FedACH services. Depository financial institutions in the United States originate cross-border transactions via FedACH in U.S. dollars. Payments are transferred from FedACH to the Banco de Mexico, the Mexican gateway operator, where they are distributed via the local payments system. Payments are posted to the receiver's account in pesos on the next banking day - with every payment receiving a wholesale foreign exchange rate regardless of amount.