MEXICO CITY — Wells Fargo & Co. said Thursday it has nearly doubled the number of locations in Mexico where recipients of remittances, a major source of foreign-exchange inflows, can pick up the money that their relatives send home from the U.S.
Under the agreement with Houston-based Transnetwork Corp., Wells Fargo, of San Francisco, will add more than 4,000 receiving locations, bringing its total to more than 9,000. The payout locations include stores run by supermarket chain Organizacion Soriana, furniture and appliances retailer and consumer finance concern Grupo Famsa, as well as branches of Banco Santander and Mexican development bank Bansefi.
The deal comes as remittances to Mexico recover from a decline in 2008 and 2009 when Mexicans working in the U.S. suffered from rising unemployment and declines in the construction industry, where many migrant workers are employed.
Daniel Ayala, executive vice president and head of Wells Fargo's global remittance services, said that business growth as a result of additional locations varies, and could be as little as 5% or in double digits. But "every time we add, it increases our volume," he said.
With senders of remittances becoming more savvy about exchange rates, transfer costs, convenience, and security, the importance of having more receiving options — such as retail chains that open weekends — is more an issue than market share, Ayala said. The official declined to give Wells Fargo's share of the Mexican remittances market, but said it is "in the billion-dollar-plus range."
Wells Fargo's Mexico network also includes banks BBVA Bancomer, HSBC Mexico, Banorte and the government-run financial and communications-services concern Telecomm Telegrafos.
Remittances to Mexico in the second quarter totaled $5.81 billion, up 3.7% from the same quarter of 2009. The transfers, whiich generate more dollar inflows into Mexico than foreign tourism, fell 16% to $21.18 billion last year after a 3.6% drop in 2008.
Levels have begun recovering despite a sluggish U.S. labor market. Ayala said an efficient relocation of the migrant labor force, either geographically or into different areas of the economy, appear to be behind the recovery in remittances.
Mexico is the main destination for remittances, although Wells Fargo also sends money to Central America, the Dominican Republic, five South American countries and four countries in Asia. It hopes to add more.
The remittances business "is one we'll continue to expand and focus on," Ayala said.