The rise of fintechs has also led to the rise of international money transfers, as they provide migrants with more convenient, faster, and cheaper options for remitting money to their families back home.
In fact, these remittances are fast becoming a core source of sustenance for many people in Latin America, and even some countries.
For context, in 2022, remittances made up 24% and 27% of the GDPs of El Salvador and Honduras, respectively, according to the World Bank.
Unsurprisingly, inflows from the U.S. account for the bulk of remittances to Latin American countries. In early 2025, BBVA Mexico reported that Mexico received $62.5 billion in remittances from the U.S. in 2024, accounting for 96.6% of remittances that came into the country.
On a granular level, these indicators signify the extent to which sending money back home matters to Latin American migrants. Broadly, it showcases international money transfers as a pipeline for investments in the region, as considerable amounts of money flowing in are directed at building businesses and enhancing the capacity of communities.
Remittance landscape of Latin America
So far, we know that remittances matter a lot for Latin American countries. Now the question is: to what extent does it matter?
In 2024, Latin America and the Caribbean countries received $160.9 billion, recording a $7.7 billion increase from the previous year and accounting for 2.3% of the total GDP of countries in the region.
For countries like El Salvador, Guatemala, Honduras, and Nicaragua, remittances remain a significant portion of their GDP, generally accounting for upwards of 19% of their GDPs. In addition to these countries, Mexico, Colombia, and the Dominican Republic stand out as the major remittance-receiving countries in the region, with Mexico alone receiving up to $64.7 billion.
Since most Latin American migrants are concentrated in the U.S. and they send money back home to improve the overall well-being of their loved ones, it makes sense that most of the remittances are coming from the U.S.
Given the significance of remittances, it is important that senders find means to send money more affordably so that the recipients get to receive more.
What you need to know to get the lowest exchange rates?
Tracking exchange rates every time you want to send money abroad might seem like a lot of work, but once you’re able to navigate and get used to the process, you will be happier for it. You could easily be saving hundreds, or even thousands, of dollars annually on remittances just by going for the best exchange rates.
Below are some factors to consider.
Understand how exchange rates work
An exchange rate is basically the price at which one currency can buy another currency at a specific time.
If you want to remit money from the U.S. to Mexico, the USD/MXN exchange rate would essentially be how much MXN a USD would get you at that point in time.
Exchange rates are subject to market supply and demand fluctuations, which means that the price of a currency could go up or down by the minute as people and organizations demand more or less of it.
Compare money transfer services
In an ideal world, all international money transfer providers would have the same exchange rate. But that’s never the case.
Generally, fintechs have better exchange rates than banks, as banks impose as high as 6% markups on their rates.
Still, within the fintechs, you’d easily find that some generally offer better exchange rates than others, usually because they have lower overheads or have limited influence of intermediary financial institutions on their service costs.
You can capitalize on the cost-saving opportunities that these differences present by comparing the exchange rates of various money transfer services. Notable services, like BOSS Money, provide a live exchange rate table that makes it easy to check exchange rates across top money transfer services at a glance.
Timing matters: Monitor market trends
Tools like Google Finance provide real-time mid-market rates for currency pairs. Using it to review the movement of the currencies you have an interest in could give you some insight into the best times to send money and schedule your transfers to fall within those periods.
Additionally, you should also keep an eye out for macroeconomic factors, such as new monetary policies and political events that might cause exchange rate volatility.
Use the right currency strategy
Getting a multicurrency account goes a long way in reducing the money you lose to exchange rates. This is because multicurrency accounts allow you to make direct transfers in a chosen currency, without having to exchange from one currency to another, thus bypassing conversion costs.
Avoid common pitfalls
Although exchange rates matter a lot, they are not the only thing that matters when attempting to save costs during international money transfers. You also have to account for other charges the service provider applies to your transactions. Basically, you have to look beyond the surface. Concentrating on exchange rates while ignoring these charges could have you losing far more than you think you are saving.
Generally, you are safer with providers with transparent pricing and flat service charge rates.
Country-specific tips
Just as exchange rates vary across currency pairs, differences exist in remittance conditions across various Latin American countries. It is important to understand the conditions applicable to sending money to each Latin American country.
Argentina and Venezuela, for instance, have very strict currency controls that significantly reduce access to foreign currencies, including the USD. This makes sending money to Argentina and Venezuela a bit more expensive, and sometimes very difficult.
Mexico, on the other hand, has some of the most liberal currency controls in Latin America, thanks to friendly government policies. As a result, the U.S.-Mexico international money transfer market is booming with lots of service providers offering very competitive rates.
You are also in luck if you are sending money from the U.S. to El Salvador, Ecuador, or Panama. These are dollarized economies with the USD as their primary currency, which makes the issue of high transfer costs due to exchange rates almost non-existent.
Conclusion
Getting the best exchange rates is clearly not as difficult as most likely thought. By taking your time to understand exchange rate costs, compare and find the right service, and appropriately time your transfers based on market trends, you’d easily get the best exchange rates in the market every time you send money abroad.
You just have to plan ahead and be proactive, and you’d be happier for it when you see how much more you saved at your end and how much more your loved ones or business partner gets to receive at their end.
Getting the best rate at any given time is simply worth it.
