Strengthening the remittance market: How secure channels turn family support into lasting stability

Remittances are much more than money transfers: they are a daily act of care and a silent source of stability for millions of households in Latin America.

The flow of remittances toward Latin America remains high and, in several countries, has reached recent records, making them a critical source of income for millions of homes. In receiving countries like El Salvador and Honduras, remittances hit historic figures in 2024–2025, consolidating themselves as the “engine of family consumption and representing a significant portion of national income” in many cases. In Colombia, remittances have grown steadily in recent years, reaching levels that account for a historic proportion of the GDP and the savings capacity of many households.

At the same time, international standards and regulatory updates have placed a greater emphasis on the transparency and security of cross-border payments, reducing the risk of fraud and losses for both senders and recipients. These improvements open the door for remittances to be used not only for immediate consumption, but for savings, investment, and as a shield during an economic crisis.

However, this is a complex process because, technically, a remesa (remittance) crosses several links: the sender, the operator (remittance company or bank), the cross-border payment infrastructure, and the final channel. At each point, there are costs, delays, and risks. When the route is opaque—for example, when useful information about the origin or destination of the payment is missing—the chances of errors or withholdings increase. This is why the recent update to international standards demands greater transparency in the information that accompanies each payment, improving traceability and reducing fraud.

The Financial Action Task Force (FATF) has recommended the following actions to improve the flow of remittances in the United States:

Clear roles in the payment chain: It is now better defined who must include the correct information in a payment and who must keep it unchanged. This helps ensure that if a problem arises, it is easier to know who to turn to, making payments more secure.

Mandatory and standardized minimum data: For international person-to-person payments above 1,000 USD or EUR, the FATF (known as GAFI in Spanish) requires that basic data such as name, address, and date of birth always be sent. This simplifies the work for banks and operators, speeds up transfers, and helps clearly identify who is sending and who is receiving the money.

Mandatory use of anti-fraud and error tools: Financial institutions must use technologies that verify that 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: Purchases made with credit, debit, or prepaid cards remain exempt from these requirements, but the regulation now clarifies what is understood by the “purchase of goods and services” to avoid confusion.

Actions that protect

The global remittance market is valued at around 700 billion dollars, and the United States is one of the primary sending countries. The importance of remittances for Latin America and the Caribbean is undeniable; therefore, the U.S. government seeks to improve its transparency and security practices to protect this valuable market for so many families. Among the regulations aiming for this goal are:

• Dodd-Frank Act and the CFPB (Consumer Financial Protection Bureau): Focused on transparency and consumer protection in remittance transfers.
• AML / CTF Standards (Anti-Money Laundering and Counter-Terrorism Financing): Providers must apply due diligence, report suspicious activities, and maintain records.
• OFAC Sanctions (Office of Foreign Assets Control): Prohibiting transactions with sanctioned countries, entities, or individuals.

Beyond the regulatory framework, families currently have various tools to better leverage the remesas they receive. One option is to receive the money directly into a savings account, which reduces withdrawal fees and allows for the activation of automated savings plans. There are also cooperatives and cajas rurales (rural credit unions), which often offer more accessible financial products with low fees, small loans, and a focus close to the community.

In many countries, the use of mobile wallets and instant payment systems has become common, allowing people to transfer, pay, and manage funds without the need to handle cash. Added to this are the services of accredited operators, which provide greater security: fraud protection, shipment tracking, and, in some cases, better rates or more competitive commissions.

Finally, guidance from NGOs and community groups plays a key role. These organizations help families transform remittances into savings or investment plans, providing 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 support something lasting, it must rest on secure rails and informed decisions, so that today’s help is transformed into tomorrow’s stability.