The study reached two major conclusions:

  • Although the cost of sending remittances is now much lower than in the late 1990s, the rate of decline has slowed markedly in the past three years. Prices have dropped only slowly despite rapidly growing volume and increased competition in the marketplace. This suggests that further price reductions might be difficult to achieve under current market conditions.
  • A substantial number of banks and credit unions in the United States have launched major initiatives in remittance services over the past three years. So far, however, they have captured only a small fraction of the market which continues to be dominated by wire transfer firms. In the U.S.-Mexico channel, which has been the target of most of the effort, American financial institutions account for no more than 3 percent of the remittance traffic. Currently, with the exception of debit card withdrawals, the cost of sending the average remittance from the United States to Mexico is about the same whether it is sent via a bank or a wire transfer firm.