US-based money transfer company Western Union has partnered with South American e-commerce firm MercadoLibre to facilitate digital remittances to Mexico, reported Reuters.
The two companies will work together to enable families abroad to transfer funds through Western Union and allow recipients to collect the payments via MercadoLibre’s digital finance arm Mercado Pago.
Mercado Pago in Mexico director Pedro Rivas said: “The amount of time we save people who don’t have to go to a physical location to pick up the remittance, we think that’s an important advantage, and… you don’t have to carry that cash from one place to another.”
Mercado Pago is said to become popular with all Mexican stores, including major chains such as McDonald’s, Domino’s Pizza and Starbucks, as a form of payment.
More than 70% of remittances are said to be collected in cash in Mexico, where more than half of its 126 million inhabitants are non-banked due to low bank penetration.
Remittances to Mexico jumped to a record $5.17bn this May, primarily due to the economic recovery in the US, which is one of the main destination of migrants from the Latin American nation.
In May, Western Union formed an alliance with PagaPhone SmartPay to enable its users in the US to send cross-border remittances to Mexico.
Recent developments at Western Union
In May this year, Western Union expanded its partnership with the UK Post Office to provide retail cross-border money transfers in the country.
The partnership aims to allow UK Post Office customers to send money overseas through Western Union’s UK Post Office digital services or in-person at 4,000 UK Post Office locations across the UK. This service is expected to launch later this year.
In March, Western Union named Indonesia-based Artajasa as its new bank account and wallet payout partner.