Citigroup to Link Mexican Accounts
Catering to the large U.S. Latino market, Citigroup Inc. is introducing binational credit card programs that can be used by Mexican clients living in the United States and their family and friends in Mexico.
The world’s largest financial services group said Tuesday that the new program would allow Mexican residents to benefit from credit lines granted to Citigroup’s U.S. clients and to withdraw cash from American accounts.
Citigroup’s Los Angeles-based unit, California Commerce Bank, will issue the binational credit cards to Mexican clients in the United States, the firm said. The U.S. cardholders can then authorize Banamex, Citigroup’s Mexican unit, to issue their family members or friends cards on the same account.
“There are a couple of objectives being served,” said Scott Strumello, a credit card consultant with Auriemma Consulting Group. “It enables Citigroup to tap into the burgeoning money transfer business, while enhancing the Banamex franchise and perhaps adding more business there.”
U.S. and Spanish banks with Mexican operations have been racing to offer banking services to the U.S. Latino community, which is a fast-growing, lucrative niche market.
Some 40 million Latinos live in the United States, of which more than half are Mexicans.
About $13.3 billion was wired to Mexico last year, roughly double the total in 1999, a May report from the Inter-American Development Bank and Pew Hispanic Center shows. Sixty-nine percent of remittances were between $151 and $600 each, and 1 in 5 Mexicans receive money from a relative working in the U.S., the report shows.
Money transfer services such as First Data Corp.’s Western Union control 70% of the Latin American remittance market, while such banks as Citigroup, Bank of America Corp. and Wells Fargo & Co. control 11%, the IADB said.
Rebeca Vargas, director of Latino markets for New York-based Citigroup, said Citigroup intended to “establish a relationship” with Banamex card customers, “and serve [their] other financial needs as well. We are offering Hispanics the opportunity to become ‘banked’ with our company.”
Citigroup said terms, rates, fee schedules and credit limits apply to the combined activity on Banamex cards. Vargas said currency exchange fees would be comparable to fees on other U.S. bank-issued cards used outside the United States.
