Strengthening the Remittance Market: How Secure Channels Turn Family Support into Lasting Stability

Remittance flows to Latin America remain high—and in several countries, at recent record levels—making them a critical source of income for millions of households. In major recipient countries such as El Salvador and Honduras, remittances reached historic numbers in 2024–2025, solidifying their role as the engine of household consumption and representing a significant share of national income. In Colombia, remittances have grown steadily in recent years, reaching levels that now account for a historic portion of GDP and the savings capacity of many families.

At the same time, international rules and regulatory updates have placed greater emphasis on transparency and security in cross-border payments, reducing the risk of fraud or losses for both senders and recipients. These improvements create space for remittances to be used not only for immediate consumption, but also for savings, investment, and protection against financial shocks.

Still, this is a complex process. Technically, a remittance passes through several links: the sender, the operator (a remittance company or bank), the payment infrastructure between countries, and the final receiving channel. At every point, there are costs, delays, and risks. When the route is opaque—for instance, when there is incomplete information on the origin or destination of a payment—the chances of errors or holds increase. This is why the recent update to international standards requires greater transparency in the information that accompanies payments, improving traceability and reducing fraud. The Financial Action Task Force (FATF) has recommended the following actions to improve the flow of remittances from the United States:

• Clear roles in the payment chain: It is now better defined who is responsible for including correct information in a payment and who must keep it unchanged. This helps determine responsibility when issues arise and makes transactions safer.

• Standardized mandatory minimum data: For international person-to-person payments above 1,000 USD/EUR, FATF requires basic information such as name, address, and date of birth. This simplifies the work of banks and operators, speeds up transfers, and makes it easier to clearly identify both sender and recipient.

• Mandatory use of tools against fraud and errors: Financial institutions must use technologies that verify the beneficiary's data is correct. This reduces failed transfers and protects the client. Many of these tools already exist and will now become a standard. Rules for card payments: Payments made with credit, debit, or prepaid cards remain exempt from these requirements, but the updated standard clarifies what counts as a “purchase of goods and services” to avoid confusion.

Protection That Reaches Families

The global remittances market is valued at around USD 700 billion, and the United States is one of the world’s main sending countries. The importance of remittances for Latin America and the Caribbean is already clear, which is why the U.S. government is working to strengthen transparency and security practices to protect this essential lifeline for so many Latino families. These are some of the key regulations:

• Dodd-Frank Act and the CFPB (Consumer Financial Protection Bureau): These aim for transparency and consumer protection in remittances.
• AML / CTF Standards (Anti-Money Laundering and Counter-Terrorist Financing): Providers must perform due diligence, report suspicious activities, and keep records.
• OFAC Sanctions (Office of Foreign Assets Control): Prohibit transactions with sanctioned countries, entities, or individuals.

Families today also have more tools to make better use of the remittances they receive. One option is to receive money directly into a savings account, which reduces withdrawal fees and allows them to activate programmed savings plans. There are also cooperatives and cajas rurales (rural savings banks), which usually offer more accessible financial products, with low commissions, small loans, and an approach close to the community.

In many countries, the use of mobile wallets and instant payment systems has become common, allowing funds to be transferred, paid, and managed without the need to handle cash. Added to this are the services of accredited operators, which provide greater security: protection against fraud, tracking of transfers, and, in some cases, better exchange rates or more competitive fees.

Finally, guidance from NGOs and community groups plays a key role. These organizations help families transform remittances into savings or investment plans, offering guidance so that the money not only arrives safely, but also becomes a foundation for building long-term stability. Remittances are more than a cash flow: they are a bridge between opportunities. For that bridge to sustain something lasting, it must rest on secure rails and on the informed decisions of families. With regulatory improvements and the growing offer of responsible services, every transfer has greater potential to transform into savings, investment, and community resilience—turning today’s help into tomorrow’s stability