The news: Western Union partnered with Argentina-based online marketplace MercadoLibre to enable digital remittances in Mexico, according to Reuters.
Recipients in Mexico can collect Western Union remittances from the US via Mercado Pago, MercadoLibre’s Latin American digital payment platform.
Why it could work: Remittance inflows in Mexico grew 22.9% last year to hit $51.42 billion, according to our forecast. This makes Mexico one of the top five recipient countries, per World Bank, and more than 95% of those remittances came from the United States.
The sizable Mexican immigrant population in the US can take advantage of Western Union’s 61,000 agent locations and a strong digital presence that comprises millions of digital wallets to send money back home. This isn’t Western Union’s first Mexico-based partnership, either: It teamed up with PagaPhone in May so US customers can send money to Mexico using Pagaphone’s SmartPay mobile wallet.
Other US remittance providers have also dug into the region:
The big takeaway: Mexico’s remittance inflow is expected to grow to $56.24 billion this year, making up 7.3% of worldwide inflow, per Insider Intelligence forecasts. Western Union can capitalize on this growth through local partnerships with companies like MercardoLibre.
The company’s tie-in with MercadoLibre is astute; it can take advantage of the ecommerce firm’s vast user base of over 80 million as it looks to expand services to other Latin American markets. This can help Western Union maintain its dominance in an increasingly competitive space that has been flooded with money transfer fintechs eager to muscle in on the market.
Keep reading: Check out what we expect for the cross-border payments market in our Global Remittances Forecast 2022 report.