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TransferWise is moving into a new $25 billion market

Apr 19, 2016, 09:30 IST

TransferWise

The US-Mexico money transfer corridor is the biggest in the world, and TransferWise wants a piece of the action.

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On Tuesday, the British-Estonian money transfer startup is launching transfers between the US and its southern neighbour.

It's a huge market, powered by the flow of remittances from Mexicans working abroad - almost $25 billion (£18 billion) was sent to Mexico in 2015, the majority of it from the US.

TransferWise is hoping its promise of fees lower than traditional financial services will prove attractive to Mexicans living abroad sending money home. It says that more than $5 billion (£3.5 billion) has been spent in fees transferring money from the US to Mexico over the last five years.

In a statement, TransferWise cofounder Kristo Käärmann said: "We are thrilled to finally introduce TransferWise to the millions of Mexicans abroad who work so hard to stay connected to their families back home. We aim to work just as hard to provide them with the cheapest and most convenient service moving forward."

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TransferWise has further Latin American launches in the works: It says it plans to bring in Argentina, Peru, Colombia, Chile, and The Dominican Republic in 2016. On Friday, the service also officially launched in Canada.

The flow of remittance has unexpectedly become a hot-button political issue in the US due to Republican hopeful Donald Trump's unconventional campaign.

One of Trump's cornerstone pledges is to build a wall between the US and Mexico to prevent illegal immigration. He intends to make Mexico pay for it, threatening to cut off the flow of remittances unless it coughs up between $5-10 billion. Doing so would likely plunge Mexico into a recession.

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