For many Mexicans with family in the United States, remittances are an essential source of income — about $40 billion a year cross the border going south. Fortunately, there are many quick and safe ways to send your loved ones money when they need it most.
With this guide, you’ll learn about the different options for sending money to Mexico so that you can find the best option for you.
What Documents Do I Need to Send Money from the United States to Mexico?
Every money transfer company has its own policies. However, most of them accept a US Driver’s License or a passport to send money from the US to Mexico.The Mexican government website points out that banking institutions also accept consular registrations as official IDs. This registration is valid to open bank accounts or send money from the US to Mexico. To request your consular registration, contact your local consulate.
That being said, before initiating your money transfer, it’s best to ask the transfer company what type of documentation you’ll need. This information is usually available on the company’s website or by calling their customer support number.
Money Transfer Options
The best option to send money from the United States to Mexico depends on your individual needs. The Consulate General of Mexico in New York recommends asking yourself the following questions:
- Who will receive the money in Mexico?
- How easy is it for them to pick up the funds at a bank or other establishment?
- How will they use the money?
- Is it best for them to receive cash or a direct deposit to their bank account?
- How quickly does my family in Mexico need to receive the funds?
- What is the transfer fee?
- How much money do I need to send?
- Are there any additional fees?
Once you’ve answered these questions, it’ll be easier to compare the different options available to you. This will help you decide which is the most convenient method for you and also for the person who will receive the money in Mexico.
Remember that your go-to method may not always be the best in case of an emergency. If your circumstances change, it’s best to reevaluate your options to find the most efficient and affordable option.
Many US banks and credit unions offer money transfers to Mexico. If you plan on sending money regularly, ask your bank if they participate in Directo a México. It’s also important to confirm that the recipient has an account in one of the banks that can receive these transfers.
Directo a México is an agreement that allows you to send money from a US financial institution to a Mexican bank account. When you use this service, you deposit U.S. dollars, and the person in Mexico receives the equivalent in Mexican pesos using the interbank exchange rate.
Bank-to-bank remittances tend to be an affordable option with low fees. Another advantage of these services is that beneficiaries in Mexico receive their money within one business day.
Conventional money transfer companies
The first step to sending money through one of these companies is to find your nearest location. This is especially important if you want to pay in cash and do the transaction in person.
Often, these companies are located inside pharmacies or grocery stores. Once you arrive, you’ll let the agent know that you wish to send money to Mexico. They’ll ask you to fill out a simple form, hand them cash, show your ID, and pay the service fee.
Once you’ve completed the transaction, the recipient in Mexico will be able to pick up the money in a matter of minutes. This is why conventional money transfer companies are among the best options when you need to send funds urgently.
Apps and other options
Recent technological advances have made it easier to send money from the United States to Mexico. Thanks to the Internet, you can send money to Mexico right from your computer or cell phone. These convenient methods save you time and can be done using your PODERcard.
Other electronic money transfer alternatives from the United States to Mexico include:
- Electronic wallets like PayPal
- Prepaid cards that you can buy in the US and send to your beneficiaries in Mexico
- Wire transfers for recipients who live in rural areas with limited access to banking institutions
- Money Orders
What Are the Costs and Taxes?
Sending money to Mexico leads to various costs; transfer fees, taxes, and unfavorable exchange rates. The exact amounts that you pay will depend on your transfer method and the speed of service. Usually, the quicker you want your recipient to get the money, the higher the rates.
One of the most frequently asked questions is if money transfers are subject to taxes. According to the Mexican Tax Code, people who receive money transfers in Mexico are exempt from paying taxes as long as these remittances are gifts between family members.
Companies that process money transfers charge a fee per transaction. The exact amount varies from one company to another. These fees can be a percentage of the amount sent or a set fee published in their price list.
If you use a US bank that participates in the Directo a México agreement, the cost per transfer is approximately $5. The person who receives the money doesn’t pay anything on their end.
Exchange rate fees
According to the Mexican Central Bank, money transfers are subject to the most competitive exchange rate. This is relative to the interbank exchange rate, as published by the Central Bank on the day that your beneficiary receives the money.
While some conventional money transfer companies offer very low transaction fees, it’s important to point out that they use unfavorable exchange rates. That’s why it’s always a good idea to compare exchange rates before sending money to Mexico. This ensures that you know exactly how much your beneficiaries will receive in Mexican pesos.
Keep in mind: The Mexican Central Bank recommends using the United States Federal Reserve website to research the daily exchange rate.
How Much Money Can You Send to Mexico?
This is another question that often comes up amongst our readers. While some companies have a remittance limit, the amount depends on the company that you’re using.
With the Directo a México agreement, you can send as much money as you want and as often as you’d like — as long as the transfer occurs between your bank and your recipient’s financial institution.
The Mexican Government’s Office of Services and Procedures does establish a money transfer limit in regards to taxes. The maximum amount that a family in Mexico can receive without paying taxes is $155,000 per year.
Sending Money to Mexico is Easy and Safe
Access to technology has made it easier and faster to send money from the US to Mexico. As you can see, the most convenient method depends on each person’s needs and how often they transfer money. Knowing this is key to choosing the right option for you.For more information on sending money from the United States to Mexico or other countries, take a look at our simplified guide to sending money abroad. It includes many valuable tips to help you protect your money and send remittances safely. We also recommend getting your PODERcard: a bank account created by the SABEResPODER team to serve our community.