Intensifying competition in the cross-border money-transfer business, Citibank unveiled a low-priced service Tuesday that it hopes will make inroads against established services offered by such rivals as Bank of America Corp. and Wells Fargo & Co.
Citibank said it will allow its account holders to move as much as $3,500 instantly to Banamex accounts in Mexico for $5, plus a commission of about 2% over the bank-to-bank foreign exchange rate.
BofA and Wells Fargo charge $10 to transfer account holders’ funds to Mexican banks.
Citibank, a unit of New York’s Citigroup Inc., said it also will charge $5 to move money from one of its U.S. accounts to another domestic account and $10 for transfers to Citibank accounts in 12 foreign countries besides Mexico.
The program is available to online Citibank customers and at most of its automated teller machines, although ATMs in former branches of California Federal Bank, which Citigroup acquired last year, won’t provide the service until later this year.
Representatives of for San Francisco-based Wells and BofA, the biggest retail bank in California, declined to comment on the Citibank program.
Immigrants wire $10 billion annually to Mexico, and banks are vying for a share of the business, which is dominated by money-transfer firms ranging from tiny storefronts to First Data Corp.'s Western Union.
In 2001, Citigroup bought Grupo Financiero Banamex-Accival, parent of Banamex, Mexico’s largest bank.
BofA transfers funds to Grupo Financiero Santander Serfin, in which it has a 25% stake.
Wells Fargo has a partnership with Grupo Financiero Bancomer.
In a related move Monday, U.S. Bancorp said it would allow Mexican immigrants without bank accounts to use specialized ATM cards to send funds to ATMs in Mexico for as little as $10, a service other banks already provide.