Graph 11 Distribution of remittance service providers to the LAC region
Spain Intl. MTO On person Bank/credit union Portugal
Japan
US
0%
20%
40%
60%
80%
100%
Source: Bendixen 2005.
64. The primary current market players in the remittances industry to the LAC region are MTOs, both small and very large, as illustrated in graph 11. In general, money transfer companies, firms that execute the money transfer, specialise in international remittances, offering few products or services in addition.20 Large global multinational companies, such as Western Union, MoneyGram and DolEx, compete against medium-sized regional players, of which Delgado Travel or Vigo are good examples. Each country corridor also features a group of smaller corridor specialists. 65. The case of Mexico illustrated in graph 12 is typical of what exists in other countries in many ways. There are far more small companies than in other markets because of the fact that immigrants from Mexico are the most numerous foreign-born group in the United States and because there are so many more identifiable communities. Nonetheless, competition in most corridors features a similar industrial organisation with varying degrees of market power exercised by the main global players and multiple medium and small participants with smaller market shares. 66. Among other entrants, banks, credit unions and microfinance institutions have entered the market with the offer of new services at lower cost and sometimes bundled with other financial services. In Japan and Europe, depository institutions have entered the market more decisively with tailored products and marketing. In contrast with other sending countries, money transfer from Japan (primarily to Brazil and Peru) is dominated by depository financial institutions.21 Nonetheless, the role of these institutions as RSPs, as distinct from distribution agents of MTOs in receiving countries, remains minor in the major markets, the US and Spain.
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