transferring money wire

The United States and Mexican governments have joined forces to tackle a problem that Mexican migrant workers have been complaining about for decades -- the high cost of wiring money back home.
Officials from the Federal Reserve and the Bank of Mexico gathered in San Francisco on Wednesday to announce their new service, ``Directo a México,'' although no banks in California currently offer the service.
But for the 40 U.S. banks that have enlisted, this new service will provide a cheaper alternative to sending remittances than the wire-transfer companies that dominate the market.
Sending money via the new bank-to-bank service can cost as little as $2 a transaction, a huge savings from the $10 and higher service fees charged by wire-transfer companies.
``Directo a México has a low cost, and the best foreign-exchange rate in the market,'' said Elizabeth McQuerry, a Federal Reserve assistant vice president. ``The originator of the remittance saves on the fee, and the receiver in Mexico also gains because they get more pesos for every dollar that's transferred.''
Money remittance is a booming business -- more than $16 billion was sent to Mexico from the United States in 2004, according to the Federal Reserve -- an increase of $10 billion from 1997. An average of $400 a month is sent by young men to help sustain their parents and siblings in rural areas where unemployment is high.
But financial institutions have largely been shut out of the industry by companies such as Western Union and MoneyGram. Those firms have longstanding relationships with migrant workers and immigrants, many of whom don't have bank accounts. U.S. banks and credit unions account for less than 3 percent of remittances to Latin America, McQuerry said.
``This is a growing market,'' said Victor Chayet, a spokesman for market-leader Western Union, who welcomed the competition. ``Our intent is to provide a much-needed service, and I believe the intent of this program Directo a México is a means to an end, that is a means to exposing a certain segment of the population to banking.''
A 1998 Mercury News series detailed how four major companies that wire money to Mexico earned substantial profits by controlling and not disclosing to customers the currency-exchange rates paid on the wired funds. More profits came from fees for domestic wires. The series -- ``Lost in Transit''-- found that as much 20 percent of funds never arrived in Mexico.
Settlement of a federal class-action lawsuit filed by migrant workers forced wire transfer firms to disclose fees. Increased competition resulted in lower costs, and even large banks -- such as Wells Fargo, which charges $8 a transaction -- started their own transfer services.
Alberto Mendoza Hernández, a spokesman for Mexico's national bank, Banco de México, said government officials in his country have been hearing complaints about exorbitant fees ``for as long as money has been sent.''
Directo a México charges U.S. banks a flat 67 cents a customer transaction, and most of the 40 banks using the service are in turn charging the customer $2 to $5, McQuerry said, regardless of how much is sent.
The customer's money is forwarded to the Federal Reserve, which transfers it to Banco de México, which in turn sends it to the participating bank in that country. The Mexican banks then convert the dollars to pesos using the official daily exchange rate plus a .21 percent fee.
The entire transaction takes about 24 hours.

from baja western onion nov 29th 2008

Transferring Money To Mexico - I just came across this site that enables you to transfer money online from the US to anyone in Mexico (or anywhere else in the world) for as low as $2.99. It's cheap and easy to use.
www.Xoom.com
You sign up online and create a profile to link into your bank account and/or credit/debit card. You can then specify an amount and a recipient. Money can be transferred directly into the recipient's bank account, or your recipient can pick up the money in minutes in Mexico at Bancomer, Banorte, Banamex, Santander Serfin, Scotiabank, HSBC (Bital), BANSEFI, L@Red de la Gente, and others. You can also transfer money to FAMSA, Soriana and CitiClub stores, making it more convenient to pick up the money after hours or on the weekend. Your recipient has to produce proof of identity before they can pick up the money.

Although it costs more, the transfer process by credit/debit card was very quick, taking just over 4 hours to complete the electronic transaction from our card directly into our Banorte account. If you're not in a rush, you can also elect to transfer by "eCheck" from your US bank account. eChecks take longer to process (up to 5 business days) but the rates are far lower, especially for larger amounts. Here are some examples of the service charge:
US Dollar
Send Amount Value Service
>From US bank account Standard Service
From Credit Card
$25.00 $2.99 $2.99
$50.00 $3.99 $3.99
$100.00 $4.99 $6.99
$250.00 $4.99 $9.99
$500.00 $4.99 $15.99
$750.00 $4.99 $19.99
$1,000.00 $4.99 $25.99
$1,500.00 $4.99 $38.99
$2,500.00 $4.99 $63.99
$2,999.00 $4.99 $75.99

NOTE: If you elect to transfer to a Mexican bank account, be sure it's a peso account. I tried to transfer dollars to a Mexican dollar account and it was eventually returned.

Certainly much cheaper and more convenient than bank wires or Western Union. - , www.Xoom.com, Todos Santos

http://www.banxico.org.mx/sitioingles/sistemasdepago/inforgeneral/sistemasPagoBajoValor/SegundoNivel/directoamexico.htm

if using wells fargo about $5.00
https://www.wellsfargo.com/per/intl_remittance/mexico

When sending money to an Account
Your Beneficiary’s qualifying Mexican Peso deposit account number at BBVA Bancomer, Banorte, or HSBC Mexico.