1st Interstate Targets Latinos Through Peso Money Orders
LOS ANGELES -- First Interstate Bancorp. has teamed up with Mexico's largest bank to offer customers peso-denominated money orders at some of First Interstate's branches.
"Given the significant number of Mexican nationals in California who send money to their families in Mexico, we saw this as an excellent opportunity to enlarge the scope of First Interstate's services to the Latino community," said David F. Loretta, an executive vice president at First Interstate Bank Ltd.
BankAmerica, which also targets this market, estimates that about $5 billion is sent from the United States to Mexico every year.
First Interstate's peso money orders are issued by Banamex USA Bancorp., drawn on Banamex and available in 31 of First Interstate's 332 branches and will soon be available at more locations.
First Interstate touts its program as being cheaper and easier than programs at other banks. Unlike dollar-denominated money orders, the peso money orders can be cashed for their full face value at any of Banamex's 750 branches. The receiver does not have to pay a fee and need to have a Banamex account. The cost is $5 to the sender.
Bank of America is also trying to appeal to this market with a program it calls DineroSeguro or "safe money." It is a wire transfer product that goes through Bancomer, Mexico's second-largest bank. A Bank of America customer pays $30 for the first wire and $25 for subsequent transfers, while a noncustomer pays $35. There is no minimum wire amount.
Competitors Not Involved
So far, Wells Fargo & Co., and Security Pacific Corp. have no specific products to appeal to this market.
"This is a word-of-mouth product," said Martin Del Secco, a Los Angeles-based Banamex product manager. Nonetheless, First Interstate and Banamex will soon run a commercial on a local Spanish-language television station. They are also planning a print campaign in Spanish newspapers. Participating branches are decked out with posters and brochures.
Mr. Del Secco said his bank is trying to interest banks in other states in this product.