Federal Reserve Bank officials on Wednesday showcased an innovative money-transfer service aimed at Mexican immigrants who send cash south of the border.
The service, called Directo a Mexico, allows U.S. residents to transfer money from banks here to Mexican institutions for 67 cents, plus individual bank fees of $3 to $5 per transaction.
The program is a partnership between the Federal Reserve Bank and its Mexican equivalent, Banco de Mexico.
Denver is the third of 16 U.S. cities scheduled to host information sessions aimed at educating banks and community leaders about the program.
Wednesday’s event, held at a hotel conference room in downtown Denver, attracted 15 Colorado banks, a handful of community groups and several employees from FirstData Corp., the Greenwood Village-based company that owns money-transfer giant Western Union Financial Services.
While Western Union charges about twice what Directo a Mexico does to transfer money from Denver to Mexico, company officials said the market is big enough for both services.
“It’s a large market that continues to grow,” said Western Union spokesman Victor Chayet. “Other products won’t necessarily cut into our business.”
Western Union’s speed is one advantage, Chayet said. The company can transfer money in minutes, compared with Directo a Mexico’s next-day service.
About 25 million Mexico natives live in the U.S., including 5 million who regularly send money to relatives or friends in Mexico, according to Federal Reserve officials.
U.S. residents transferred about $16.6 billion to Mexico in 2004. That number is expected to grow to about $20 billion this year.
Directo a Mexico will likely be available by year’s end in at least one Colorado bank, Alpine Bank in Glenwood Springs. Dozens of banks nationwide, including some in Kansas, California and Georgia, offer the service.
“This will fulfill one of the largest needs (Latinos) have,” said Abraham Baeza, a banking officer with Alpine Bank. “It will be a key product to serve the Latino community and help them understand the financial services that are available.”
The program nationwide handles about 25,000 payments a month totaling $10 million, said Elizabeth McQuerry with the Federal Reserve.
“Clearly, this is an important financial service that people need,” she said.
Staff writer Will Shanley can be reached at 303-820-1260 or wshanley@denverpost.com.
