Cash going to Mexico likely to start at a bank

Mexicans who work in the United States and send money south of the border are moving into the financial mainstream, according to a new survey.

Fully 70% of migrants interviewed by Mexico’s central bank said they had a U.S. bank account. The findings also suggest that U.S. financial institutions are playing an increasing role in the money transfers. People with bank accounts often are able to send money at a cheaper rate than if they wired the money through other means.

The survey by the Bank of Mexico provides the central bank’s most detailed profile yet of Mexicans working in the U.S. who were responsible for most of the record $23 billion sent to Mexico in 2006. The survey was based on a poll of more than 8,700 people who send the money, known as remittances. They were interviewed in seven Mexican border cities in December 2005, after crossing by foot or car from the United States into Mexico for the holidays.

Those surveyed were not asked about their immigration status. Bank of Mexico analyst Jesus Cervantes said central bank officials assumed most of the Mexicans interviewed were working in the United States legally given the timing of their return and the high percentage of those saying they had a bank account. Illegal immigrants in the United States are generally unlikely to have bank accounts. Tighter border enforcement has dissuaded many illegal immigrants from making the traditional holiday trek to Mexico.

Still, the aggressive pursuit of Latino customers, undocumented or otherwise, by American financial institutions clearly is helping to facilitate the movement of money.

U.S. banks were among the first to accept so-called matricula consular cards issued by the Mexican government as proof of identify.

“It’s a very good business for them,” Cervantes said.

Bank of America Corp., which has launched a trial program offering credit cards to some customers without Social Security numbers, already offered its patrons a no-cost money wiring service to Mexico.

Falling fees for electronic transfers have helped make remittances Mexico’s No. 2 source of foreign exchange, topped only by petroleum sales. The cost of wiring $300 to Mexico from the U.S. last year averaged $10.40, 63% less than in 1999, according to the Bank of Mexico report, which was released this month. The central bank recorded 65.8 million remittance transactions last year, averaging about $350 each.

Remittances are such an important pillar of Mexico’s economy that the government has spent considerable effort in improving the financial reporting of this flow of funds and finding out more about the people sending and receiving them.

The central state of Michoacan received nearly $2.5 billion in transfers last year, more than any other state, according to the central bank. Nearly two-thirds of all remittances flow to Mexico City and eight of the country’s 31 states.

Mexican families use the money sent almost exclusively to buy basics such as food, appliances and schooling. Nearly 70% of senders surveyed said they wired money to their loved ones regularly. The average frequency is about once a month, a reflection of how much of a lifeline the money has become for millions of Mexican families.

Nearly 60% of senders surveyed said they had a job in Mexico when they fled for the United States, a reflection of low salaries in a nation where the minimum wage is less than $5 a day. Three quarters of the respondents didn’t finish high school.

marla.dickerson@latimes.com