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A remittance is a transfer of money from one person in one country to another in another country. Learn how they work, the types that exist and how to send remittances from the U.S.
A remittance It is a money transfer that a person sends from the country where they live and work to another person in a different country, usually a family member. The term comes from the verb “to send”, which means to send or command.
In the context of Latino migration in the United States, remittances are the shipments that immigrant workers make to their families in Mexico, Guatemala, Honduras, El Salvador, Nicaragua, Colombia, the Dominican Republic, Ecuador, Peru, and other Latin American countries. According to the Inter-American Development Bank, in 2026 it is projected that Latin America and the Caribbean will receive more than $174 billion in remittances, with the United States being the main source of those funds.
For many families, remittances represent a significant part of their monthly income: they pay for rent, food, children's education, and medical expenses.
The process is simpler than it seems:
With Félix, the entire process happens via WhatsApp: without additional apps, without queues, and in minutes.
Types of remittances
The commission is the fee you pay for sending money. Learn about the types of fees, how to compare them, and how to reduce what you pay when sending remittances.
A perpetration is the fee that a shipping service provider charges to process your remittance. This is the visible cost of the transaction: what the service charges you as the sender to facilitate the transfer.
The commission can be a fixed fee (for example, $3.99 per shipment regardless of the amount), a percentage of the amount sent (for example, 2%), or a combination of both.
However, the commission is only one of the two components of the real cost. The other is the margin that the supplier applies to the Exchange rate. To know the true cost of a shipment, you must consider both.
A number of services are advertised with “zero commission” or “no charge”. What they usually don't say is that they recover that margin by applying a less favorable exchange rate. You see $0 in commission, but your family member gets less money than they would with a service that charges a small commission and uses a rate closer to the market.
The only way to compare accurately is to look at the total amount your beneficiary receives, not just what appears as commission on the screen.
To understand how costs work in detail, check out the full guide: Remittances and money transfers from the US: everything you need to know.
The payee is the person who receives your money transfer. Learn what data you need, how to add it, and what options you have to collect your remittance.
In the context of money transfers, the payee is the person designated to receive a remittance or transfer. This is who you choose as the recipient when you start shipping.
In the US corridor -Latin America, the beneficiary is usually an immediate family member: a mother, a brother, a son, or the spouse who stayed in the country of origin. When you send money with Felix, your beneficiary receives a notification via WhatsApp and chooses how to collect the funds based on the options available in their country.
The data you need depends on the delivery method you choose:
The Beneficiary You don't need to have a bank account to receive cash. In most destination countries, there are agent networks where you can withdraw funds by presenting your identification and the shipment reference code.
With Félix, the process is direct from WhatsApp: you indicate to the chat the name of your family member, the country of destination, and the preferred payment method. Félix saves this information so that in the next shipment you only have to confirm, without re-entering the data.
To find out what data is needed depending on the destination country, check the pages of each broker: Mexico, Guatemala, Colombia, and the other available countries.
You can also check out the full guide: Remittances and money transfers from the US: everything you need to know.
Complete guide to remittances from the United States to Latin America. Methods, costs, exchange rates, regulations, and how to send money safely and affordably.
Una bank transfer is the electronic movement of funds from one bank account to another. It can occur within the same country (domestic transfer) or between different countries (international transfer).
In the context of remittances, an international bank transfer involves sending money from a U.S. bank account directly to the bank account of the payee in their country of origin. To do this, you need your family member's full bank details: bank name, account number, and in some countries, a specific code such as the CLABE in Mexico (an 18-digit number that uniquely identifies the account).
There are two ways for the money to reach your family member's bank account, and they are very different in cost and speed:
For the vast majority of those who send remittances on a regular basis, the bank deposit via supplier it's the most convenient option: it's faster, significantly cheaper, and doesn't require you to go to your bank or know the SWIFT codes.
For a full comparison of all available shipping methods, see the guide: Remittances and money transfers from the US: everything you need to know.
The exchange rate determines how much money your family receives. Learn what it is, how it works and how to get the best rate when sending remittances from the U.S.
An exchange rate (also called the exchange rate) is the price of one currency expressed in terms of another. In a nutshell: how many units of local currency you receive for every dollar you send.
For example, if the exchange rate of the dollar to the Mexican peso is 20.15, it means that for every $1 dollar sent, your payee receives 20.15 Mexican pesos. If you send $300, you receive 6,045 pesos. If the rate were 19.80, you would receive only 5,940 pesos. A difference of 35 cents in the rate equals $105 pesos less for your family.
Not all rates are the same. There are two that you should know:
Interbank rate (mid-market rate): It is the “real” market rate, the one that banks use against each other to exchange currencies. It's the right reference point and you can search for it on Google by searching, for example, for “dollar to Mexican peso” or tools such as /dolar-today/Mexico-mxn.
Provider Fee: This is the rate that the remittance service offers you. It is almost always less favorable than the interbank one because the provider applies a margin, which generally ranges from 0.5% to 3%. That difference is part of how the vendor generates revenue.
A 1% difference in a monthly shipment of $300 means $3 less per transfer, or $36 a year that your family doesn't receive. In larger shipments, the impact is greater.
To understand how costs and rates affect the actual price of your shipments, check out our guide: Remittances and money transfers from the US: everything you need to know.
Complete guide to remittances from the United States to Latin America. Methods, costs, exchange rates, regulations, and how to send money safely and affordably.
Each year, more than 174 billion dollars to Latin America and the Caribbean from different parts of the world, with the United States being the main source: it represents 96% of the remittances that Mexico receives and more than 73% of those that arrive in Central America. This money reaches Mexico, Guatemala, Honduras, El Salvador, Nicaragua, Colombia, the Dominican Republic, Ecuador and Peru, among other countries.
For decades, sending money was complicated and expensive. You had to go to an office, stand in line, pay high commissions and wait for days. Today, the landscape changed completely. Digital services allow you to send money in minutes, from your phone, without leaving your home, and with much lower rates than before.
Sending a remittance isn't just a financial transaction: It's paying your mom's rent. It's that your children go to school. It's just that your brother can buy medicine when he needs it. It's the most concrete way to tell your family: “Here I am, even if I'm far away.”
This guide is designed to help you understand everything you need to know about sending remittances from the United States: how the system works, what methods are available, how much it actually costs, how to protect yourself from fraud, and what about taxes.
A Remittance It is a money transfer that a person sends to another person in a different country, usually a family member. The term comes from the verb “to send”, which means to send.
In the context of migration, remittances are the shipments that immigrant workers make to their countries of origin to support their families.
Although it seems simple from the outside (you open an app, enter the amount, and the money arrives), behind each shipment there is a process that involves several steps:
In each shipment there are several actors:
Sending money from the U.S. is a regulated activity. Companies offering remittance services must be registered as Money Services Business (MSB) before the FinCEN (Financial Crimes Enforcement Network), a division of the Department of the Treasury. In addition, many states require their own licenses to operate.
CFPB (Consumer Financial Protection Bureau) protect your rights as a consumer. Thanks to the CFPB Remittances Rule, any registered supplier must inform you before each shipment: the exact amount your payee will pay, the exchange rate applied, all fees, and the estimated delivery date. If something goes wrong, you have the right to dispute it and, in many cases, to cancel the shipment within the first 30 minutes.
Knowing how the system works empowers you. When you understand the rules, you can better choose the service that best suits your situation.
Not all shipping methods are the same. Each one has advantages and limitations. The best option depends on factors such as: how quickly the money needs to arrive, if your family member has a bank account, and how much you are willing to pay in fees.
Bank transfer is the sending of funds directly from a bank account in the U.S. to a bank account in the country of destination. This process generally uses the SWIFT network for international movements.
It's a reliable and well-regulated method, but it has clear drawbacks: the cost is high (between $25 and $50 per transfer to most banks), the delivery time can be 2 to 5 business days, and both the sender and the payee need active bank accounts. For one-off shipments of large amounts, this may be an option. For regular monthly remittances, it's generally not the most affordable.
Digital services are today the most popular way to send remittances. Platforms such as Felix, Remitly, Wise and others have transformed the market by offering fast transfers (usually in minutes or a few hours), much lower fees than banks, and the convenience of doing everything from the phone.
Felix works directly via WhatsApp. You don't need to download a separate app or create an account on a new site. If you already use WhatsApp, you already have everything you need. It's especially convenient for people who aren't used to using multiple financial apps or who prefer to communicate in a familiar environment.
Cash agents, such as stores that offer shipping services, are still a valid option, especially when the payee doesn't have a bank account and prefers to pick up the money in person. The service usually takes between one and two hours to be available. Commissions are variable and generally range from $5 to $15 per shipment.
This option requires the sender to physically go to a location. For many people with tight schedules, this can be an inconvenience.
Money orders are pre-printed payment instruments that are purchased with cash and sent by mail. They are a traditional option that is in clear decline. They are slow (3 to 7 days), relatively uncomfortable, and can be misplaced. Nowadays, there's little reason to choose this method over digital alternatives or cash agents.
In most cases, digital services offer the best combination of speed, cost, and convenience. The key is to know which service within that category gives you the best total price, and that's what we explore in the next section.
There are two parts to the cost of sending a remittance. Many people only see the first one and don't notice the second. Understanding both is essential in order not to overpay.
Perpetation is the explicit charge that the service charges you for shipping. This can be a fixed fee ($2.99, $4.99) or a percentage of the amount sent.
But there is a second, less visible cost: the Margin in the exchange rate. The provider applies their own exchange rate, which is almost always less favorable than the market exchange rate (called the interbank rate or “mid-market rate”). The difference between the two rates is profit for the provider and a hidden cost for you.
Some services are advertised with “no commission” or “zero fee”. What they don't say so clearly is that they make money through exchange margin. The result may be that your family member receives less money than if you had used a service with a commission but with a better exchange rate.
The only way to properly compare two services is to look How much does your family member receive, not how much you pay.
Suppose you want to send $300 to Mexico.
Service A is cheaper in real terms, although it charges a visible commission. Service B seems cheaper but in practice it costs you more.
Always compare using the final number your payee receives.
These are indicative ranges based on market averages. Actual costs vary depending on the vendor and the amount shipped:
Felix offers transparent pricing: what you see is what you pay, with no surprises in the exchange rate.
Exchange rate is the price of one currency expressed in terms of another. If the exchange rate of the dollar to the Mexican peso is 20.15, it means that for every dollar you send, your family member receives 20.15 pesos. If the rate was 19.80, you would receive less. The difference seems small, but it adds up.
Market rate (or interbank rate) is the “real” exchange rate that banks use against each other. It's the price without margin, the right reference point. You can check it out by Googling “Mexican peso to dollar” or going to xe.com.
Remittance providers don't give you that exact rate. They apply a margin, which usually ranges from 0.5% to 3%, depending on the service and the broker. That margin is part of how they make money.
A 1% difference may seem minimal, but if you send $300 a month, that 1% equals $3 per shipment, or $36 a year that your family doesn't receive.
Foreign exchange markets move in real time, 24 hours a day, 7 days a week. The rate you see in the morning may be different than in the afternoon. Some providers block the rate the moment you confirm the shipment. Others apply the current rate at the time the money arrives at its destination. It's important to know which of the two methods the service you choose uses.
If you're sending a large amount, such as paying for several months of family expenses, it's worth comparing the rate across two or three services on the same day. A half percentage point difference in a $1,000 shipment is $5 less than your family receives. Ten dollars or twenty dollars of difference already changes the decision.
Each country has its own ways of receiving money, its own currency, and its own peculiarities. Here's a summary of what you need to know for each runner.
Sending money to Mexico It is the highest-volume corridor since the United States There are many options available: bank deposit through the SPEI system using the CLABE (the 18-digit account number used by all banks in Mexico), cash withdrawal on networks such as OXXO or at bank branches, and mobile wallets. Competition is high in this broker, which generally translates into better rates for the shipper.
Sending money to Guatemala is mainly done through bank deposit and cash withdrawal at local agents. Many families in rural areas rely on cash because they don't have access to full banking services. It's important to confirm with your payee which method is most comfortable for them before shipping.
Sending money to Honduras works in a similar way to Guatemala. Bank deposit and cash withdrawal through agents are the primary methods. Cash agent coverage is extensive in major cities, but may be limited in rural areas.
Sending money to El Salvador has a particular advantage: El Salvador uses the US dollar (USD) as its official currency. That means there's no currency conversion, and your family member receives exactly the amount you send in dollars. Bank deposit and cash withdrawal are the main options.
Sending money to Nicaragua It uses the Córdoba (NIO) as its currency. Bank deposit and cash withdrawal are the available methods. Digital wallet options are more limited than in other countries in the region, so you should confirm with your beneficiary the most accessible method for them.
Sending money to Colombia has one of the most advanced digital ecosystems in Latin America. In addition to traditional bank deposits, platforms such as Nequi and Daviplata allow you to receive money directly in mobile wallets that don't require a traditional bank account. Cash withdrawal is also available through agent networks.
Send money to the Dominican Republic is one of the most active runners in the Caribbean. Bank deposit in Dominican pesos (DOP) and cash withdrawal are widely available. The agent network is strong both in Santo Domingo and in secondary cities.
Sending money to Ecuador is a new broker in Felix, available since March 2026. Ecuador also uses the U.S. dollar as its official currency, so there is no currency conversion. The main method of receipt is bank deposit.
Sending money to Peru is another new broker from Felix, also available since March 2026. The currency is the Peruvian Sol (PEN). The main methods are bank deposit and cash withdrawal through agents.
The remittance industry, unfortunately, is a frequent target for scammers who take advantage of the trust and emotional urgency of people who send money to their families. Knowing the warning signs can save you a lot of money and heartbreak.
Family Emergency Scams: Someone calls or writes to you saying that a family member of yours is in danger, in detention, or in the hospital, and needs money right away. Urgency is a deliberate tactic to get you to act without thinking. Before sending anything, call your family member directly by another means to confirm.
Lottery or Prize Scams: They tell you that you won a prize, but that you need to pay a fee or tax to receive it. No legitimate prize asks you for money in advance.
Impersonation of authorities: Someone impersonates an agent of the IRS, ICE, or the police and tells you that you owe money or that you have legal problems. They ask you to pay immediately by transfer, gift cards, or cryptocurrency. Government agencies never work like that.
Fake sites and apps: Some scammers create websites or apps that mimic legitimate services. Always verify that the URL is correct and that the site has real contact information.
Thanks to the CFPB Remittances Rule, any registered vendor is required to provide you with a pre-payment statement that includes the exact exchange rate, all fees and the amount your payee will receive. You have 30 minutes after starting the shipment to cancel it without penalty.
If something goes wrong, the first step is to contact the supplier directly. If they don't resolve the issue, you can file a complaint with the CFPB at consumerfinance.gov/complaint.
Felix is a licensed, encrypted, and transparent pricing service. If you have any questions or problems, you can contact our support team directly via WhatsApp.
One of the most common questions we receive is: “Do I have to pay taxes to send money?” The short answer is: in most cases, no.
Sending money to a family member abroad It's not a tax-deductible expense, but it's not a taxable event either. You're transferring money that you've already earned and that you've already paid taxes on. You should not report it as additional income or pay additional taxes for the shipment itself.
The only exception is the Gift Tax. If you send more than $19,000 to a single person in a calendar year (the limit for 2026), you are technically required to file Form 709 with the IRS. In practice, however, you should only pay gift taxes if your total lifetime donations exceed $15 million (exemption for 2026). For most people, this will never be a real problem.
In most Latin American countries, family remittances are not subject to local taxes. However, if you receive very large amounts or very often, local authorities may ask for explanations about the source of the funds. It's recommended that your payee check with a local accountant if they handle significant amounts.
Remittance service providers are required to submit a Currency Transaction Report (CTR) before the U.S. government when a cash transaction exceeds $10,000 in a single day. This is an automatic legal requirement, not an accusation.
What can cause serious problems is the Structuring: Intentionally dividing a large amount into several smaller shipments to avoid crossing the $10,000 threshold. That's illegal, even if the money is completely yours and comes from a legitimate source.
Users with ITIN (Individual Taxpayer Identification Number) can send remittances normally. Most digital services, including Felix, don't require a social security number. For more information about the ITIN, you can check out our guide to documents for immigrants.
In July 2025, the United States government passed the law known as the “One Big Beautiful Bill Act”, which includes a 1% federal tax on certain transfers of money abroad. This tax took effect on January 1, 2026 and applies directly to the transaction at the time of shipment.
The most important thing to know: the tax only applies to transfers paid in cash. If you pay for your shipment from a bank account, debit card, or credit card, you are exempt. Payments in cash, money orders, or cashier's checks are subject to the tax.
In practical terms:
The tax is automatically charged by the service provider at the time of the transaction. You don't have to calculate or pay for anything separately. If it applies to your shipment, you'll see it reflected in the cost breakdown before confirming.
This is one more argument for preferring digital services with payment from a bank account: in addition to being faster and cheaper, they are beyond the scope of this tax.
The remittance market is changing faster than at any time in its history. And the changes go in one direction only: faster, cheaper, and more accessible to everyone.
In 2010, most remittances were sent in cash through physical agents. Today, in the United States-Latin America corridor, digital and cash transactions are almost on par, and digital channels continue to gain ground every year. The pandemic accelerated this transition and many people who had never used an app to send money discovered that it was easier than they thought.
Real-time payments: Instant delivery is no longer a differential advantage and is becoming the standard. Instant payment networks such as SPEI in Mexico or real-time ACH in the US make it possible for money to arrive in seconds.
Conversational Finance: Services like Felix take this trend to the next level. When sending money occurs within WhatsApp, there's no learning curve or new passwords to remember. Technology disappears and what's left is a natural conversation, like when you say to a trusted friend: “Send $200 to my mom.”
Lower costs: The World Bank established the objective of the Sustainable Development Goal (SDG) to reduce the global average cost of remittances below 3% of the amount sent. Technology is making it possible to reach that threshold. In some brokers, the costs are already below 2%.
Financial Inclusion: For many Latinos in the U.S., the first digital financial service they use is a remittance service. That gateway is becoming the starting point for accessing more products: bank accounts, credit, savings, and investment. Remittances are the first step in a longer financial journey.
More options, better prices, faster transfers and, over time, a complete financial platform from the same tool you use to talk to your family.
