Sending money home: the cheapest and safest ways to send remittances

Every year, millions of families in the United States send billions of dollars to loved ones in Mexico, Guatemala, El Salvador, Honduras, and other countries. That money pays for groceries, school supplies, medicine, and rent. It matters a lot. So does making sure as much of it as possible arrives safely.

Unfortunately, not every remittance service is honest about what it costs. Some charge a flat fee upfront but also make money on the exchange rate behind the scenes. Others promise 'no fee' but give you a worse exchange rate than the real mid-market rate. Both of these things can quietly reduce what your family receives.

What is the mid-market rate?

The mid-market rate is the 'real' exchange rate you see on Google or XE.com. Most remittance services do not give you that rate. They offer a slightly worse rate and keep the difference as profit. This is legal, but it is also a hidden cost. Always check the mid-market rate before you send.

How to compare services

The World Bank runs a free tool called the Remittance Prices Worldwide database. The U.S. Consumer Financial Protection Bureau (CFPB) also has a free 'Send Money Abroad' comparison tool at consumerfinance.gov. Before you send money:

• Enter the exact amount you want to send
• Compare what the recipient will actually receive in their currency
• Look at both the fee AND the exchange rate together
• Check how fast the money arrives and what delivery method is available (bank deposit, cash pickup, mobile wallet)

Do not just look at the fee. A service that charges zero fee but gives a bad exchange rate may cost more than a service with a small fee and a fair rate.

Services worth knowing about

Some widely used options for sending money to Latin America include Remitly, Wise (formerly TransferWise), Western Union, MoneyGram, and Xoom (owned by PayPal). Each one has different fees, exchange rates, and delivery speeds depending on the country and the amount. None of them is best in every situation. Always compare on the day you plan to send, because rates change daily.

Some community banks and credit unions also offer low-cost remittance programs. A few credit unions that serve immigrant communities partner with local banks in Mexico and Central America to offer very competitive rates.

Do you need a Social Security number?

Many remittance services do not require a Social Security number. You may be able to use a government-issued photo ID, a passport, or a Matricula Consular (the ID issued by Mexican consulates). Requirements vary by service and by the amount you are sending. Larger amounts may trigger more identity verification under U.S. law. Check each service's ID requirements before signing up.

Watch out for scams

Predatory money transfer scams are common in immigrant communities. Some warning signs:

• Someone approaches you in person or on social media promising a much better rate than anyone else
• They ask you to pay cash and give no receipt
• They use a messaging app like WhatsApp instead of a licensed business platform
• The 'business' has no physical address and no license

Always use a licensed money transmitter. You can verify a license through your state's financial regulator website. If something feels wrong, trust that feeling.

Protect yourself when sending

By U.S. law, licensed remittance services must give you a receipt that shows the exact fees, the exchange rate, and how much the recipient will get. Keep that receipt. If there is a problem, you have the right to cancel within 30 minutes of sending in most cases, and you may have the right to dispute errors. Contact the CFPB at 1-855-411-2372 if a licensed service does not fix a mistake.

A small habit that adds up

Sending a slightly larger amount less often can sometimes reduce your total fees. For example, two transfers of $300 may cost more in fees than one transfer of $600. Think about what schedule works best for your family and your budget.