Western Union and MercadoLibre team up to send digital remittances to Mexico
By Noe Torres
MEXICO CITY (Reuters) – U.S.-based cash switch agency Western Union Co, introduced an settlement Wednesday with South American e-commerce large MercadoLibre to ship digital remittances to Mexico, which have change into a lifeline for the weakened native economic system.
The partnership will enable households overseas to ship cash via Western Union, whereas these in Mexico can acquire the funds via Mercado Pago, MercadoLibre’s digital finance arm, the 2 corporations mentioned.
“The period of time we save individuals who do not need to go to a bodily location to choose up the remittance, we expect that is an necessary benefit, and… you do not have to hold that money from one place to a different,” mentioned Pedro Rivas, director of Mercado Pago in Mexico.
Shops in Mexico, together with main chains resembling McDonald’s, Domino’s Pizza and Starbucks, are more and more accepting Mercado Pago as a type of cost.
In response to the businesses, greater than 70% of remittances are presently collected in money in Mexico, the place low financial institution penetration means greater than half of its 126 million inhabitants do not have an account.
Remittances to Mexico reached a file of $5.17 billion {dollars} in Might, largely as a result of financial restoration in america, the No. 1 vacation spot of migrants from the Latin American nation.
President Andres Manuel Lopez Obrador, who usually boasts of the stable development in remittances obtained by Mexico, has mentioned that they might attain a file $60 billion {dollars} this 12 months, a 16% improve from 2021.
Specialists, nevertheless, have warned that the movement of cash may lower in coming months as a result of influence of an anticipated recession in america.
“Within the first half of 2022 there are a number of unfavourable indicators for U.S. financial development, which symbolize a draw back threat for remittances,” mentioned Gabriela Siller, director of analysis at native agency Banco Base.
(Reporting by Noe Torres; Writing by Kylie Madry; Enhancing by Aurora Ellis)
