Miami U.S. banks have raced to join the remittance industry in recent years, seeking a share of the billions of dollars immigrants send to their native countries, especially around the holiday season.
But as they try to get a piece of the business, many immigrants are reluctant to shift from the smaller mom-and-pop stores and the money transfer services they are accustomed to using to send money home.
With remittances to Latin America and the Caribbean estimated to be a $45 billion industry, it's no surprise U.S. banks are interested. Many also see remittances as a way to attract new customers to other services.
In the last year alone, major banks have unveiled an array of new services to court immigrants away from the hundreds of money transfer services operating in the United States. Wachovia Bank unveiled a card that allows families in Latin America and the Caribbean to withdraw money from an ATM linked to U.S. bank accounts.
Wells Fargo Bank expanded its money transfer service to El Salvador and Guatemala, and Bank of America announced it was offering free money transfers to Mexico.
The industry's efforts have won it an estimated 3 percent of the market, according to remittance expert Manuel Orozco, of a Washington, D.C.-based think tank.
But despite the banks' efforts, immigrants continue to shy away from sending money through banks for a variety of reasons. In many cases, banks have succeeded in attracting more Hispanic customers but not in getting them to send money, Orozco said.
"They don't think of the bank as a place to send money. They think of the bank as a place to save money," he said.
Many immigrants, especially those here illegally, don't have forms of identification required to do business with banks. Some U.S. banks now accept consular identification cards from countries such as Mexico, Guatemala and Argentina, but customers still need a backup form of ID such as a driver's license or birth certificate.
Leopoldo Gomez, 36, who came to South Florida to work in a nursery, said after hearing radio ads touting Bank of America's free transfer program, he tried to open an account there with his consular card.
"I thought it's more safe to deposit the money," he said, "but they told me I needed another form of ID. I just came here eight months ago. I don't have any."
Cost is another concern. A report released in December by the national nonprofit Appleseed Center for Law & Justice found that while the entry of banks into the remittance business helped bring down the price of money transfers, banks didn't always offer the cheapest services. The average cost of sending $300 was about $15, the report said.
In many cases, banks are finding convenience also plays a role.
On Washington Avenue in Homestead, about 35 miles southwest of Miami, migrant workers spent a recent evening perusing stores for Christmas gifts such as T-shirts, cowboy boots and perfumes - as well as using the stores' wiring services.
Santos Gonzalez, 33, who arrived from Chiapas a month ago, said he liked coming to the street to pick up presents, see friends and send money home.
"You can send photos and money," he said.
Wells Fargo has worked with Mexican banks to facilitate remittances for more than a decade, but for some banks the learning curve is steep, said Danny Ayala, head of Wells Fargo's global remittance program.
"We're starting from zero for the most part," Ayala said.
Despite the slow start, Ayala is optimistic about the ability of U.S. banks to play a role in the remittance industry.
"A $45 billion market from the U.S. to the Latin and Caribbean region is definitely a market that most financial institutions would like to be part of," Ayala said.