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Wells Fargo & Co. has struck agreements to add 4,000 access points to its global remittance network in Mexico, nearly doubling its current site total in that country.
August 25 -
Banks that want a partner network to help them offer remittances now have more options, and at least one of the alternatives is gaining traction.
June 1
Wells Fargo & Co. is expanding its remittance network by adding access points in Latin America and Asia, in an attempt to gain more money-transfer business from former Wachovia Corp. customers.
The San Francisco-based bank on Tuesday announced a deal with UniTeller Financial Services Inc., the U.S. money-transfer company of Grupo Financiero Banorte. Through UniTeller, Wells Fargo now has new remittance-distribution partnerships with nine banks and alternative financial services providers.
The deal will increase the number of locations where people can pick up money sent by Wells Fargo customers. The bank's new remittance access points are in Guatemala, Colombia, Ecuador, Honduras, Peru, Philippines and Vietnam. Wells also says the deal will help it expand the remittance services it offers in Mexico through its
Wells Fargo, long known as a West Coast bank, bought Charlotte-based Wachovia during the financial crisis and is now trying to increase its visibility on the East Coast. The UniTeller deal will allow Wells Fargo to expand its remittance business to Wachovia customers, says Daniel Ayala, executive vice president and head of Wells Fargo's global remittance services unit.
Wachovia did not offer the same remittance services as Wells Fargo. Now, as Wells finishes converting Wachovia branches, customers on the East Coast will be able to use remittance services that they "never have been able to get access to in the past" from traditional banks, Ayala tells American Banker in an interview.
Wells Fargo has long been considered a leader among traditional financial institutions who offer remittances. The bank relies on that business to appeal to so-called underbanked consumers, who generally use alternative financial companies for things like check-cashing and money-transfer services.
Ayala says the bank's money-transfer business helps Wells Fargo attract new customers and increase loyalty among existing customers. The company now has 34,100 remittance access points in 15 countries in Latin American and Asia.
Wells has seen "double digit growth" in its remittance services in recent years, Ayala says, adding that the bank processed $1.41 billion in money transfers in 2010, a 41% increase from 2009.
Ayala would not disclose more specifics on the bank's remittance business or the terms of its deal with UniTeller. But Wells Fargo intends to continue adding remittance-pickup locations, and Ayala says he hopes that expansion will generate increased growth.
His company is increasingly trying to challenge the dominance of Western Union Co. and MoneyGram International Inc., which have long specialized in providing money-transfer services. Those specialists cater to many underbanked consumers, including immigrants sending money to friends and family in other countries.
Ayala says Wells Fargo's pricing, convenience and dependability give it an advantage over the traditional money transfer companies. The bank's customers can send remittances online or at a local branch and do not have to worry about their safety the way they would when carrying large amounts of cash to wire service locations, he says.
Banks are increasingly turning to existing transfer services or processing partners to
The bank is scheduled to report its third-quarter earnings on Oct. 17.
