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Every month, millions of Latinos in the U.S. open their phones and send money to their home countries, sometimes before paying their own bills. This daily act has a name, global economic weight, and a dedicated date on the international calendar. If you are just starting to understand how this system works, this article provides the perfect starting point.
A remittance is a money transfer that a migrant worker sends from the country where they work to their family in their home country, and it represents one of the most important sources of external income for dozens of countries in Latin America.
What are remittances and what are their types?
Remittances are international money transfers made by people working in a country other than the one where their family lives. The most common definition, and the one that applies to the majority of global flows, is this: a migrant worker sets aside a portion of their income and sends it to their relatives in their home country.
However, the term covers at least three distinct situations:
Family remittances (the most common type): a worker in the U.S. sends money periodically to their parents, children, or partner back home. This is the most frequent case and the one with the most weight in global statistics.
Payments from employers to workers abroad: companies based in one country that pay employees living in another. For example, a U.S. corporation that transfers a monthly salary to a remote employee in Latin America.
Financial support for international students: families who send money to children or relatives studying abroad who do not have work authorization.
A necessary clarification: in accounting and business logistics, the word "remittance" is also used to refer to a batch of invoices or goods sent in a single shipment. That usage is unrelated to what we are discussing here. The remittances that matter for this article are money transfers between individuals across international borders.
Family remittances—that is, transfers from migrant workers to their families—account for the vast majority of global remittance flows and far exceed official development assistance in many recipient countries.
Why remittances matter on a global and local scale
The global flow of remittances has exceeded $800 billion in recent years, according to World Bank estimates. This figure places remittances above foreign direct investment in many developing countries, making them a real economic pillar rather than a marginal flow.
For recipient families, the impact is direct: in many households, the money arriving from abroad accounts for more than half of their monthly income. That transfer pays for rent, children's education, medicine, and food.
The case of Mexico as a scale reference: Mexico received more than $63 billion in remittances during 2023, according to data from the Bank of Mexico (Banxico). That figure is equivalent to approximately 4% of the country's Gross Domestic Product and exceeds income from tourism and oil exports. Mexico is consistently one of the top three remittance-receiving countries in the world.
This magnitude is not unique to Mexico: countries in Central America and the Caribbean show similar patterns of structural dependence on remittances as a source of national income.
International Day of Family Remittances: on June 16, the United Nations commemorates the International Day of Family Remittances, established to recognize the contribution of migrant workers to the well-being of their families and the development of their home countries. To understand the scale of that impact in the case of Mexico, check out the article on the importance of remittances in Mexico.
In 2023, Mexico received more than $63 billion in remittances, according to the Bank of Mexico, a figure that represents nearly 4% of the country's GDP and exceeds income from tourism and oil exports.
How to send a remittance from the U.S.: options and where Félix comes in
Sending money abroad from the U.S. is easier and cheaper today than it was ten years ago, but the difference between a good service and an expensive one can be significant. These are the available methods:
Traditional banks: banks allow international transfers, generally via wire transfer or SWIFT. They are secure, but usually slow (2 to 5 business days) and charge high fees, in addition to applying exchange rates with wide margins. For frequent transfers or medium amounts, they are rarely the most convenient option.
Specialized money transfer services: platforms designed exclusively for remittances. They are faster (bank deposits usually arrive in minutes), charge lower fees, and have more competitive exchange rates. Most require downloading an app or creating an online account.
Cash pickup networks: the recipient collects the money in person at an agency, a partner store, or a bank. This is useful when the beneficiary does not have a bank account. Availability time is approximately 30 minutes in many cases.
What to look for before choosing a service: the visible fee is not the only cost. The exchange rate applied by the service can significantly reduce the amount your family member receives. Always compare the final amount that arrives at the destination, not just the transfer fee. Also, check the delivery time and accepted payment methods.
Félix as a modern alternative: Félix operates entirely within WhatsApp, with no need to download an additional app. You can send money to your home country with a fee starting at $2.99, paying with a debit or credit card, or in cash at participating stores. Bank deposits arrive in about 30 minutes in most countries, and in minutes for Mexico. If you want to see the details of the process, you can check how to send money with Félix or compare the fees by country.
Frequently asked questions
Are remittances a loan?
No. A remittance is a transfer of your own money that the sender sends without expecting repayment. It does not generate debt or interest. It is different from a loan in every respect: the money sent belongs to the worker and is freely given to their family.
How long does it take for a remittance to arrive?
It depends on the service and the delivery method. With specialized services like Félix, bank deposits arrive in about 30 minutes in most countries (in Mexico, in minutes; in the Dominican Republic, up to 4 hours). Cash pickup at the destination is available in minutes in most cases. Traditional banks via wire transfer can take between 2 and 5 business days.
Are remittances sent from the U.S. legal?
Yes. Sending money abroad from the U.S. is completely legal. Money transfer services operate under federal regulation (FinCEN) and must comply with identification and reporting standards. There is no legal limit on sending remittances, although individual services may have their own limits for compliance reasons.
Sources and references
World Bank
- World Bank, Remittances Data: Global data on remittance flows by region and receiving country.
Bank of Mexico (Banxico)
- Banxico, Remittances: Official statistics on remittances received in Mexico, including the 2023 record.
United Nations
- IFAD, International Day of Family Remittances: Official information on the International Day of Family Remittances (June 16).
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