Western Union will be working with MercadoLibre, the South American eCommerce giant, so digital remittances can be sent in Mexico — where they’re now a huge part of the local economy, Reuters wrote Wednesday (July 6).
This comes as the economy has been weakened by the various factors. Now, families abroad will be able to send money through Western Union, and those in Mexico will be able to collect the payments through Mercado Pago, the digital finance arm of MercadoLibre.
Stores in Mexico, including big chains like McDonald’s, Domino’s Pizza and Starbucks, have been accepting MercadoLibre as a form of payment more often.
Reuters wrote that over 70% of the remittances are collected in cash right now in Mexico, and because of the low bank penetration, over half of the country’s 126 million inhabitants don’t have a bank account.
This comes as remittances hit a record high of $5.17 billion in May, as the U.S. economy was doing better at the time — the U.S. being the biggest destination for migrants from Mexico.
However, Reuters quoted several experts who said things could get worse, with money coming back decreasing in volume in the next few months alongside a potential recession.
In March, PYMNTS wrote that Walmart was working to make it cheaper for customers to send their remittances to Mexico.
Read more: Walmart Relaunches Mexican Remittances Program
Customers are able to send money from any of the retail giant’s stores in the U.S. to Mexico, with the cost coming out to just $2.50 per transaction on the Walmart2Walmart money transfer program.
That came as remittances to Mexico were up 27% compared to 2021, according to the company, and Julia Unger, vice president of Walmart Financial Services, said the low costs show how the company wants to make things more equitable in general for customers.
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