PayPal, Western Union Named & Shamed for Overcharging the Most on Money Transfers to Mexico

Remittances to Mexico is a $36-billion-a-year business.

By Nick Corbishley, for WOLF STREET:

Remittances from workers of Mexican descent based mostly in the US, but also in other countries, are a lifeline for Mexico’s economy, accounting for almost 3% of GDP. Millions of people depend on relatives working in the U.S. In some Mexican states, they can represent as much as 10% of total revenues. Most of that money gets spent very quickly in the Mexican economy, often on rents or building costs.

This year, Mexico is on target to receive about $36 billion in remittances, an increase of around 7% on the previous record high of $33.4 billion in 2018. To put that figure into perspective, it’s more than the $29.3 billion in revenues that state-owned oil company, Pemex, obtained from its exports of crude oil and other hydrocarbon products in 2018, and is also more than the $30.7 billion Mexico received in foreign direct investment.

Mexico is the third largest recipient of remittances worldwide, behind India ($82 billion forecast for this year) and China ($70 billion), both with populations more than ten times larger than Mexico’s. This year, remittances are nearly ten times larger than they were in 1995. So $36 billion a year is big business for the money transfer companies, and everyone wants to get a slice of it.

Now Mexico’s government has publicly lambasted a number of financial companies for overcharging on “remittances” made by workers of Mexican descent based mostly in the US to individuals in Mexico. And it piled pressure on banks to lower the charges or to remove them altogether.

The average commission for sending remittances from the United States to Mexico is $9.22, the fifth highest in Latin American (after Colombia, the Dominican Republic, Costa Rica and Cuba), according to the the World Bank. The problem is not just the upfront fees the firms charge but also the delusive exchange rates they bake into their transfer calculator.

The two worst offenders when it comes to fee gouging, according to Mexico’s consumer protection agency Profeco, are PayPal Holdings Inc.’s Xoom and Western Union Co. For instance, for a money order of $300 from Chicago the two firms charge between $5-$8 and use exchange rates that are sharply lower than any of their competitors.

“They are the two worst options for sending your money to your mother or your wife,” said the director of Profeco, Ricardo Sheffield, in a press conference on Monday. The companies that currently offer the best deals include Cloud Transfer, PagaPhone and Banorte, Sheffield said, adding that Profeco will start publishing monthly data on the best and worst money order firms in the U.S. and has set up an online portal that consumers can check.

The Mexican government’s decision to name and shame the highest charging money transfer companies comes at a time of intensifying competition in the sector, as newcomer digital services like TransferWise and WorldRemit enter the fray, often with lower fees and better exchange rates.

Big banks are also sniffing around for opportunities. Last month, Spain’s largest bank, Grupo Santander, which also controls Santander Consumer USA, announced it will no longer be charging fees on remittances to Mexico from account holders sending money from its U.S. branches. Besides being free of fees, Santander’s new remittances program will “offer a competitive exchange rate” as well as transfers that will usually finalize on the same day as the deposit is made.

“We have great confidence in Mexico and Mexicans, and given the complex global situation and [the country’s] own internal challenges, we want to tell the authorities, our teams, customers and communities: we are here,” said Grupo Santander CEO Ana Botin during a sit down with Mexico’s President Andres Manuel Lopez Obrador (AMLO for short). Thanking Botin, AMLO added, “With their example, other banks are sure to follow.” Which was a nice promo for Santander.

The deal offers mutual benefits for Mexico’s government and Santander. AMLO can say to his supporters that he’s fulfilling his manifesto pledge to curb the massively inflated bank fees in the country, when in actual fact his government has done precious little to address the problem. As for Santander, while its remittances gambit may hit its fee income, it stands to lure new clients on both sides of the U.S.-Mexico border while also gaining brownie points with the new administration.

But not everyone has access to fee-free transfers yet. Dubbed “One Pay,” the initiative will at first be available only to customers of the 600 branches Santander has in the eight northeastern states it operates in. Some time next year, it will be expanded to include digital transfers that can be processed via mobile phone platforms. Then, some time in 2021, it will be opened up to clients of all U.S. banks. But the program is available only to those with bank accounts. The “unbanked” in the US will continue to pay the biggest fees and get the worst exchange rates.

And in Mexico there are an estimated 42 million people who are “unbanked,” for a slew of reasons including usurious fees, even for the most basic of financial services, and past scandals. They include many of the people who receive regular remittances from family members in the U.S. They may struggle to qualify for Santander’s “One Pay” program, or similar programs launched by other banks. And they too will be stuck with the biggest fees and worst exchange rates. At least, thanks to Profeco’s new web portal, they might be able to identify which ones to avoid at all cost. By Nick Corbishley, for WOLF STREET.

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  61 comments for “PayPal, Western Union Named & Shamed for Overcharging the Most on Money Transfers to Mexico

  1. Keeper Hill says:

    Not surprised. These are mob like fees and take advantage of those with the least. A special place in hell for them.

    • curiouscat says:

      They will continue because they are quite aware hell does not exist. If they are to change it must be because of forces from this world not an imaginary one.

  2. Iamafan says:

    Remember guys, donate here as always; and marine’s toys for tots using Alexa app and Amazon doubles the toys. Than you. Enjoy the holidays.

      • Em says:

        Had transfered 1k to my bro in Austria via PayPal and he declined to accept it. The money returned less 50 bucks! Still have to recoup this somehow. First ald last time using PayPal…

        • Joyce Z. Meyers says:

          I am wondering who to turn to to register a complaint. Paypal has been charging me 10% from my account to someone who has a Canadian Paypal. And there is no way to know this because they do not post on your account what their charges are.

  3. timbers says:

    If you buy online at Amazon UK or Germany, Itaty, etc, Amazon makes it hard & confusing to have your credit card do the currency exchange because Amazon rips you off when they perform the currency conversion. A paragraph or more would be needed to explain their under handed tricks to confuse. And I don’t use PayPal, either, to pay for items in foreign currency because also rip you off with bad conversion rates – I use my credit card. Who knows how long before credit cards get into the act more and join in on the rip off.

    • fajensen says:

      The “pay in your own currency scam” is built into the credit card terminals. It is a “bank thing”. I get it “offered” because my home currency is not EUR.

      For money transfers to outside of the EU my experience is that “TransferWise” (transferwise.com) are very efficient.

      Their game is that they don’t transfer any money with every transaction. They keep pools of local currency at both ends of the transaction and the transactions most of the time are local with ‘cross currency accounting’ balancing the pools. A digital version of the Hawala system.

  4. Old-school says:

    This is an interesting issue to me. If someone works here and sends their money to Mexico and that is a good thing for Mexico, then is that a bad thing for the USA?

    Something does change in the situation to the money being spent in the US. The money flows in different ways and maybe in the Macro the money flows balance out, but at the micro level things are different.

    • Zantetsu says:

      I imagine it’s complicated. Are cheaper workers willing to do more for less better or worse for the American economy? What about for the American social fabric? I expect that many fewer Mexican workers would come here if they were not allowed to remit payments to Mexican families. It would remove most of their reason for coming.

      Would that be better or worse for us? I suppose it depends upon who you are. If you are a person who wanted to do the job that the Mexican is doing, then it’s bad for you, assuming that you didn’t get some other better opportunity because someone else was willing to shore up that part of the economy on your behalf. If you are someone who buys a cheaper product or service based on the cheaper Mexican labor, then I guess it’s good for you.

      Or maybe you just don’t like foreigners living on American soil? In that case I suppose there is no way in which allowing remittances is a good thing for you. Or perhaps you’d prefer to see able bodied workers stay in Mexico and fight to improve their conditions and government there instead of opting out? Then I suppose you don’t like remittances either.

      Or maybe you like the idea that our country provides an opportunity for those across the border to improve their lives and their family’s lives by working in better conditions for more money here than they could wherever they came from?

      There are alot of valid viewpoints on this issue for reasonable people to disagree about.

      • Cas127 says:

        Z,

        A fairly even-handed presentation.

        But I think that maybe more attention needs to be paid to the draining/redirecting of financial flows out of the US – remits in the case of Mexico and – much much larger – the blocking of dollar recycling by Chinese exporters to the US (for a long time the Chinese gvt has prevented said exporters from doing anything with their enormous dollar proceeds other than putting them into essentially state controlled banks where the dollars are overwhelmingly put only into US Treasuries – bailing out the US gvt with tiny interest rates but starving US exporters of recycled dollars).

        In both cases, historically unprecedented levels of financial flows are being re-directed outside of the US – during the very same 20 years that have seen some of the worst US job/wage growth ever.

        Conventional economic theory says the leakage of these flows should not matter – but conventional theory never thought about the Chinese lockup (or 15 million Mexican illegals).

        It is possible to debate the issue but that really isn’t what happened in the US for many years – the vast issue was just blown/brushed off by the US gvt and it’s MSM familiars for many years.

        • JoAnn Leichliter says:

          Remittance levels, to Mexico anyway, have been declining a bit of late, as fewer people are able to cross the border illegally. In one town where a meat packing plant was raided by the INS, virtually all of its workers went bye-bye. Wailing and tooth gnashing from the packer ensued, with claims that now no one would work there. Lo and behold! At the following job fair, all positions were filled by American citizens. There probably aren’t really jobs that Americans won’t do…

        • Zantetsu says:

          Citations please, JoAnn. I searched google and found plenty of stories about the raid but was unable to find any confirmation that they subsequently were able to replace the staff, and whether or not it was at the same pay rate and if not, how that has impacted the financials of the company. I would be interested in reading how it turned out if you have the details.

  5. Steve Anderson says:

    Where does Remitly fit into all of this?

  6. Iamafan says:

    Hey Bezos are you listening. Amazon to the rescue. They need your help Uncle Jeff.

  7. Breta says:

    This is what cryptocurrencies are for. No banks in the middle.

    • Zantetsu says:

      Yeah, but wake me when we have a viable cryptocurrency. Bitcoin isn’t it, unless you think the whole world can survive on 7 transactions per second, or believe in the farce that is the lightning network because you don’t understand why it’s technically flawed.

      • medial axis says:

        Why is it technically flawed?

        • Zantetsu says:

          It requires all participants to enter into an agreement that any one of them could cancel at any time. The only way to know whether or not your contract has been cancelled is to watch the blockchain constantly. This is unlike normal bitcoin where you only have to watch the bitcoin as long as you are actively engaged in a transaction. Having to watch the blockchain constantly is not tenable for most clients.

          It only gets worse when you try to use the ‘feature’ of lightning which allows you to transact with a third party via intermediary lightning contracts. Now you have to watch the blockchain for the cancellation of all contracts along that chain. It’s basically technically unsustainable.

          People use it though, mostly because they *want* it to work because they are get-rich-quickers hoping to show that bitcoin is viable and are willing to ignore any technical problem as long as others are willing to do so too.

        • medial axis says:

          @Zantetsu

          I think the solution they have for your first para is Watch Towers and for your second is Hash Time Locked Contracts (HTLCs).

          AIUI, HTLCs enable an LN payment from A to B throught n other nodes to be the equivalent of n+1 node to node LN payments. I won’t put up more details for fear of breaking Wolf’s rules. Besides, us arguing about it won’t settle the matter, only time will.

    • John Taylor says:

      Exchanging currency always costs money, more so when the currency is question is volatile. From that standpoint, exchanging earned US dollars for the crypto of your choice, transferring it, and then exchanging the crypto for Mexican pesos to spend would be a very expensive way to send this money.

      • Harrold says:

        Heck, even the Coinstar kiosks at my local grocery store allow you to convert your pennies and nickels into Bitcoin now.

    • Wolf Richter says:

      Cryptocurrencies are a scam. What they’re for is a wealth transfer. Prices have collapsed. There are thousands of them out there. They breed like cockroaches.

      • Cas127 says:

        Wolf,

        “Crypto currencies are a scam”

        Maybe mostly in their current manifestations (having thousands of them does seem fairly insane/predatory) – but I think that the major impulse behind them (the removal of government monetary manipulation power) is what will be remembered as world historic.

        I don’t think it is an accident that crypto has surged during a period of gvt monetary manipulation unprecedented in modern history.

        Savers have seen the earning power of their hard won savings essentially taxed away by 60 to 95 pct – due to ZIRP.

        And mostly to save from ruin the most reckless and corrupt in US (looking at you US gvt and its “clients”).

        The thousands of species of crypto will vanish – but the danger/daily reality of obscured gvt expropriations will perpetually persist (it is in the nature of the vast majority of people who inhabit gvts) – so the need for an “honest dollar” (not subject to sub rosa dilution) will persist.

        And so the need and desire for supply-stable crypto.

        • MC01 says:

          I have been hearing about “Stablecoin” for five years now, maybe more. Yet it seems to me that cryptocurrencies are the very definition of unstable: to be a reliable alternative currency they shouldn’t fluctuate all over the place like they do. What good is to me and my business if Whatevercoin is $5,000 one week, $7,500 the next, $3,000 in two months and if valuations are driven by handful of “whales” that can cause even more damage than any central bank?

          The myriad of highly dubious schemes around, from completely worthless “tokens” issued by shady companies operating out of seedy offices in Malta to Bitcoin vending machines peddled by equally shady outfits in Dubai, doesn’t exactly fill me with hope: this is a sector that needs to through a lot of self-policing if it wants to fulfill a fraction of its promises.

  8. Matt Keprta says:

    The illegal aliens from Mexico should not be here first of all. And second, the money needs to stay in the country. Mexico has a major rule of law problem. Why abet them? I have no sympathy to people who step on the sovereignty of my nation. I am very very sick of them leeching off of our broke nation. I worked in the ITIN unit at the IRS and they all are liars, cheaters, and thieves. And the IRS does not care. I could write a small book on what I saw at the IRS. Complete insanity.

    • nick kelly says:

      If you have purchased any US grown produce (lettuce, etc.) you have benefited from Mexican labor.

      California growers laugh about US college kids who are in some kind of Woody Guthrie fantasy and want to be a fruit picker and play guitar in the evenings.
      In strawberries they last about two hours.

      Strawberries are known as ‘the fruit from hell’ to the workers. The ultimate stoop labor, it is shunned if possible by Hispanics and the work often falls to Mestizo Indians based in Mexico.

      The US land owner will not be the employer: that would expose them to all kinds of legalities like wage laws etc., so a Mexican is set up as the contractor who on paper operates the business.

      California’s Big AG (the source of most US produce) is largely based on Mexican labor.

      BTW: Individual Uno employed many illegal Mexican
      workers at his golf resorts. The hiring agent would scrutinize their forged documents and say: “Sorry this is not good enough. Go to someone else and get a better quality paper,then come back”

      He was paying heavy equipment guys ten bucks an hour.
      The financials of these properties are being adjusted for the higher labor costs. Why have no charges been laid against the employer?

      • Cas127 says:

        Kelly,

        15 million Mexican illegals in the US are not all just working in CA ag.

        And if you believe that they are all that stands between the US consumer and $20 strawberries…I have some Chinese tariff inflation to sell you (note soaring US import goods consumer inflation over last 18 months of tariffs…cough cough).

        • Frederick says:

          15 million? Seems like there are more than that in NY alone lol

        • Wolf Richter says:

          Cas127,

          There are a lot of numbers being thrown around these days, but let’s be specific here.

          The total population of “illegals” in the US is between 10 million and 12 million people, according to the latest estimates by Pew. If someone says 15 million, in my book that’s close enough since no one knows for sure. But, but, but…

          Not everyone who speaks Spanish or Chinese is illegally in the US. There are many bi-lingual or tri-lingual US citizens and permanent residents, and many US citizens and permanent residents who don’t speak English well. You cannot tell from just looking at them or listening to them who is illegally in the US.

          Of these people illegally in the US, some are Mexicans, but others are from Central America and South America, and there are illegals from Asia and Europe and what not. So it’s a mix. They’re not all Mexicans.

          In fact, among Mexicans in the US, over the past few years, there has been a net-outmigration, with more Mexicans going back to Mexico than coming to the US. The growth in illegal immigration among Spanish speakers in recent years has been from Central America and South America.

          Most of the sob-stories in the media (such as NPR) about illegals getting caught and getting treated badly in the US cite illegals from Central America, not Mexico. Mexico has its own problems with this flow of people from the south.

        • Raymond Rogers says:

          Wolf if you believe there is a net outflow of any illegal population, I have oceanfront property in Afganistan to sell to you. Illegal immigration that does not entail overstays is vastly understated, and has been for decades.

          Just as local Chinese officials get to report their own GDP growth numbers, so to do US immigration officials about illegal crossings vs. apprehensions. They dont get promoted telling the truth.

      • fajensen says:

        Those kids are mental weaklings, with no resilience at all. I have picked both strawberries and onions for six weeks straight as a vacation job in my youth.

        The onions are far worse. To pick the onions, one would lie on a platform behind a tractor and pick up the onions from the ground, knock of the dirt and throw them onto a conveyer belt along the side of the platform. Everything would be done inside a warm cloud of dust, diesel and onion fumes. Your chest will be compressed and you can only twist your back and use the shoulders, which is a hell of a strain on the joints.

        Nobody normal does that for more than 2-3 days straight, it used to be far better money than the strawberries though.

        The strawberries, the trick is to keep the legs and back straight stomach ‘compressed’ and swivel at the hips. Every 2 meter or so one will have filled a whole crate with strawberries and there is a break fixing the new one where one can straighten up and ogle the wimmen a bit. And one can eat a couple of the berries too.

        The benefit gained from having done shitty work is that one now knows that if everything goes totally sideways, one can always do that for a while again and it will, surprisingly enough, be totally survivable. I wouldn’t want to make a career out of it though.

        The irrational fears of failing at a new jo or a new business and then having to do ‘life-ending’ shitty work, is transfixing far too many competent people in jobs they hate, working for idiots they despise!

        • JoAnn Leichliter says:

          Thanks, fajesen. The idea that Americans can’t work has become somwhat self-perpetuating. Want hard work? Try detasseling corn. But thousands of teenagers in rural areas have done it annually, back in the day. Manual labor may be hard on the body, but you recover better than from hard mental activity. Having done both, I prefer the former.

        • tom says:

          Grew up working harvests. Long hours. No fit bit, or calorie counter app needed. If we groused about hours, the threat was
          always that we could stay home & they would bus in the Mexicans.
          Was back in the days if you were on welfare & fit to work, you were required to work if a job was found for you.
          Never had one that lasted a full day of work. So its not just todays kids.

          I absolutely love your last paragraph!! It is so correct.
          Wife and I built a business we have enjoyed for almost 30yrs
          and counting.

      • sierra7 says:

        Nick Kelley:
        True. Having personal experience in ag back in the mid 20th century hiring labor for harvesting row crop veggies in CA we did have to go every day to the employment agency to try to get “Americans” to work the fields and it was near impossible to do so. All of our workers in those days turned out to be in the Mexican/American “Bracero” program (not perfect by any means); they were mostly all very hard workers, sent most of their earnings back to families in Mexico. Try to stem the tide of ag workers from “south of the border” to dependency on US citizen workers and we will all end up crying in our plates.
        And another commenter wrote about “employers” and their responsibility in hiring “illegals”. Yes! Like the bankers those huge meat/fowl/hog packing firms that hire as many as possible thru ethnic contractors to absolve responsibility only make the problem worse.
        US industry/Ag etc., loves “illegals”. It disrupts the idea of organized labor in their plants/industry.
        If Americans had to pay “American labor costs” for their food there would be far less frivolous spending on useless “consumer” goods and would hurt the overall economy. And, they would either learn to have back yard gardens or scream bloody murder to have someone rescue them.
        Why is it that so many labor laws exclude agricultural workers???????

        • Just Some Random Guy says:

          Siera,

          You couldn’t get Americans because you offered a low wage, probably lower than what welfare pays.

          There is no such thing as a labor shortage. There is a shortage of people willing to work for the wage offered. Pay strawberry pickers $25/hr and you’ll have Americans lined up around the block to do the “jobs Americans won’t do”. Pay them $5/hr (or whatever the going rate is these days) and yeah nobody but illegal workers will sign up.

          This goes to any industry not just ag. I keep hearing over and over how the US has a shortage of 20K truck drivers. Nope. There is a shortage of 20K people willing to work for what truck driving currently plays. Double that pay and within a week that “shortage” goes buh bye.

      • Harrold says:

        Many California agriculture workers obtain a lawful visa called the H2-A. There were almost 200,000 H2-A visas issues last year.

    • Daedalus says:

      In my neighborhood, ‘illegal aliens’ once picked squash and field peas. They spent the summers here and then went home for a few months in the winter. Nice, hard-working folks that I looked forward to seeing.

      Then came the ‘crackdown’. Now, the fields that used to grow veggies are grazed by beef cattle. There is no magical ‘legal’ labor force available to pick your food. If you don’t believe it, listen to your hero. “Employment is over 95%!” So, why aren’t wages going up?

      This lack of people willing to grow your food drives up the price of your veggies (but to some extent diminishes price of your beef). And, you might be interested to know, there are many former farms in my neighborhood that have simply gone fallow. The land is owned by old families (no strings), and they find raising food for you to be less fun than you might imagine.

      People who live in big cities have been ‘leeching off our broke nation’ for a long time. The current poor in Appalachia were rich in resources. Where did the coal profits go? The water in the Colorado River goes to who, and the ‘infrastructure’ to move that water was paid for by the little guy. In Ohio, most of the land that supplied your food was seized by financial corporations in the 1970’s, thus reducing landowning farmers to corporate employees. Some folks produce stuff you need to live, and those who get the stuff are calling those who feed them the ‘leeches’?? Wow!

      On another topic, if the IRS wanted to ‘turn a profit’ for the country, it would go after the big-time ‘liars, cheaters, and thieves’, not Mexican labor or the small farmer. I was audited three times. The first time, I slowly gathered my little scraps of paper and no money was owed. (IRS lawyers were paid for nothing). The next time, the same process occurred and I was better prepared. I discovered a deduction I hadn’t taken. (The IRS paid me). The third time, they gave up in mid-audit (IRS lawyers were paid for nothing).

      Instead of harassing little guys and Mexican labor, why isn’t the IRS concentrating on the really big ‘liars, cheater, and thieves’, people that would net them a profit? Say, for example, those with international reach who can ‘cook the books’ by shifting money to ‘tax friendly venues’? Why don’t they go after Trump, for example?

      • Just Some Random Guy says:

        Employment is over 95%!” So, why aren’t wages going up?
        ___

        Wages have gone up a lot since YOUR hero left.

        Median income 2016: $57,617
        Median income 2018: $63,179

        I realize this will never be mentioned on CNN or MSNBC, which is why you have no idea it’s happening.

        • cb says:

          Great. Let’s applaud inflation.

          There is a difference between individual real wages going up and nominal household income going up.

          Government mandated minimum wage hikes have contributed to rising nominal household income California. That has pushed prices for rents, restaurants and services in Southern California. The Govt gets more taxes. Several workers to a household in much of California. The purchasing power of the dollar is being diminished.

          I see nothing heroic in the current push to have the FED suppress interest rates.

    • Petunia says:

      The bad news is the money flowing out of the US does not only go to Mexico, it goes around the world. A weekend look at the service counter at a Publix is an education on illegal immigration.

      The amounts of cash are stunning. I routinely saw transactions in the thousands being sent, they took a long time because they have to be broken up due to limits of $1K. This means they also charge the fees over and over again on what should be one transaction.

      • $1000 is the limit I think. This came about with the money laundering laws after 9/11. Story goes a guy tried to pay off his CC balance, it was over 5k and the government froze the payment. I send my broker a personal check and he grills me like Joe Friday. I am pretty sure this is why potus is hiding his tax returns. Just about anyone can get caught up in this, trying to circumvent the regulations.

  9. John says:

    Whoever thinks that mexican labor or any type of cheaper labor saves them as a consumer any money is sadly mistaken. Business operates by charging the maximum it can. Irregardless of labor costs. This goes for domestic or foreign based businesses.
    That said, they will always prey on the weakest and those with no other options. Welcome to capitalism.

    • Just Some Random Guy says:

      The word irregardless does not exist in the English language. What you mean to say is regardless.

      That aside, are you seriously suggesting labor costs don’t affect prices? I’m intrigued. Do tell….

      • Wolf Richter says:

        Just Some Random Guy sez:

        “The word irregardless does not exist in the English language.”

        Random House Unabridged Dictionary sez it exists just fine, it’s just “nonstandard,” like so many things in English, quoted directly:

        ir·re·gard·less adv. Nonstandard. regardless.
        [1910–15; IR-2 (prob. after irrespective) + REGARDLESS]
        —Usage. IRREGARDLESS is considered nonstandard because of the two negative elements ir- and -less. It was probably formed on the analogy of such words as irrespective, irrelevant, and irreparable. Those who use it, including on occasion educated speakers, may do so from a desire to add emphasis. IRREGARDLESS first appeared in the early 20th century and was perhaps popularized by its use in a comic radio program of the 1930s.

    • Zantetsu says:

      Without collusion lower labor costs will lower the cost of the product due to market competition. Are you saying there is collusion in the food industry?

  10. Tom says:

    I would hope that our government taxes these transitions.

  11. roddy6667 says:

    Western Union and MoneyGram are currency rapists, but I found out (the hard way) that wire transfers from bank to bank are even worse. Companies like TransferWise are the future.

  12. Brant Lee says:

    Funny how we are all accepting the average 3% transaction fees on using our debit cards. Banks pay little or nothing on savings accounts but rake in at least 10x that on one swipe of the card. 3% of most retail sales is a heck of a lot of money passed on to the consumer, especially on fuel sales.

  13. Ron says:

    I encourage everyone to read Paul Theroux’s new book: On the Plain of Snakes. Anecdotal, but enough to lead to reasonable macro conclusions about the Mexican/ US relationship.

    • nick kelly says:

      Just read it. I knew Mex was poor but not how poor. Theroux (one gutty Mofo to go where he goes at 75) hits one town so poor actual money is rarely seen, it’s mostly barter. In the color photos there is one of a woman holding a small basket (half a bushel?) of maize. In the other hand she is holding a woven sombrero of the tourist type. She is going to a mill to trade the hat for grinding the maize into meal. It’s hard to estimate the cost of such a small job for the mill. Five cents?

      Theroux gets shaken down by a really ugly Federale.
      Of course he has all the correct papers but when he tries to point this out the cop throws a fit and says ‘do you know what I can do to you?’ So Theroux shows him all the money he has in his wallet, about 300 but the cop wants him to go to a cash machine.

      I mention this in a coffee joint to a guy who has never heard of Theroux and the same thing happened to him. The cops were going to seize his van for not having the right tires but allowed him to pay a large fine.

      I’m a right winger by Canadian standards ( a com sympathizer if not a fellow traveler by US standards)
      but I think Mex would be better off with whatever brand of communism Cuba has now.

  14. IslandTeal says:

    Transaction fees on debit cards are driven by many factors. Most can be controlled by the user. Who is the card issuer and where processed. People are not paying attention. Kroger started collecting a fee for cash back this year. One more scam fee.

  15. polistra says:

    Sounds like competition is working properly, so this isn’t really a problem. If the government was forcing people to use only Western Union, there would be a problem.

  16. Just Some Random Guy says:

    “workers of Mexican descent based mostly in the US”

    You mean illegal aliens?

    • Wolf Richter says:

      Just Some Random Guy,

      No, we don’t mean “illegal aliens.” For your edification: This includes the millions of US citizens of Mexican descent, US green card holders of Mexican descent, Mexican farm workers legally in the US on temporary visas, etc. etc. and it also includes those who are illegally in the US who can scrape up enough money to send some back.

    • Zantetsu says:

      Dumb question.

    • cd says:

      that is the majority of this…..Mexican Americans usually have most of extended family here….

  17. cd says:

    They should not allow these remittances or tax the living heck out of them. Illegal immigrants have ate so much up of citizens taxes via services, health, housing, rentals, food banks, schooling etc. it should be outrage.

    In fact when the economy folds, I see citizens taking this into there own hands…..We are the only economy so stupid with illegal immigration…..deport all these leeches. I don’t use them for anything. There are 850K farm workers in America, use the laws and existence and the bracero – Green card gig. It worked before….

    Call me sick of paying for these illegal immigrants courtesy of potus 44’s insane illegal executive decisions…What a disaster that chump was for American citizen taxpayers….

    Heck he was going to fly people here from central america to apply for his amnesty provisions….even removed charge language……

    talk about needing some tar and feathering

    • Dale says:

      “have ate so much up of citizens taxes”. Fine piece of writing there CD. You sound as if you have not long been in the U.S. yourself, a stowaway from Nigeria perhaps, or maybe a Mara Salvatrucha outcast from El Salvador, or more likely a depressed Citizen who never took advantage of the basic education generously offered in U.S. to all who wish to improve their lot in life.

      • Wolf Richter says:

        Dale,

        “have ate” (instead of “have eaten”) is in common use in certain parts of the US, including in Oklahoma, where I used live for decades. Once you get used to it, it’s charming, actually. My trusty Random House Webster’s Unabridged Dictionary also lists this use, but labels it “Archaic.”

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