Wisconsin State Journal

BANKS OFFERING ALTERNATIVE FOR LATINOS ATM CARDS ARE A NEW IDEA BEING OFFERED TO LATINOS HERE WHO USUALLY WIRE MONEY BACK TO THEIR HOMELANDS.

Date: Thursday, July 24, 2003
Section: FRONT, Edition: ALL, Page: A1

Byline: Jason Stein Business reporter

As local financial institutions seek ways to capture Madison's rapidly growing Latino market, many are looking at what may be a key service: international money transfers. The financial institutions have started offering local immigrants cheaper ways to send money to family members in Latin America. Their goal is to begin chipping away at the market long dominated by Western Union and other wire services.

The bankers have gotten Mexican immigrant Juan Hernandez Huesca's attention. The 54-year-old Verona resident has always used Western Union to send about $800 a month to his wife in Mexico, but now he said he wants to try a new service from US Bank instead. "Figuring it all up, there's a little savings," the groundskeeper said of the service, which he learned about through his employer, The Bruce Co. US Bank recently introduced the system, which allows immigrants to send money to relatives in Mexico through ATM cards. Mexican workers like Hernandez can load the cards with $1,000 for fees of $10 to $15, said Jesse Ramirez, an assistant branch manager for US Bank. Relatives in Mexico can then use an ATM card they receive through United Parcel Service to withdraw the money from cash machines in their area.

Pablo Sanchez, an assistant vice president for Park Bank, said he was also promoting debit cards to Latinos as a way to send money to relatives abroad. Sanchez's efforts have shown results. The number of Spanish speakers holding debit cards with Park Bank has doubled in the last year - from 345 in June 2002 to 694 in June 2003. Kim Sponem, president of CUNA Credit Union, said that earlier this year CUNA started offering wire transfers to Latinos at a cost of $10 for amounts up to $1,000.

The importance of money transfers to Latin America, both locally and around the United States, is growing along with the Latino population. The 2000 census counted 14,387 Latinos in Dane County, up 149 percent from the 1990 count of 5,774. An informal survey of 118 local Latinos by the Interfaith Coalition for Worker Justice found that they sent an average of $270 a month to relatives living in Latin America. The Pew Hispanic Center, a research institution in Washington, D.C., found that such money transfers from the United States to Mexico reached a record $10 billion in 2002.

The new transfer services that banks are offering have some clear advantages. Immigrant Jesus Gutierrez, for instance, said he pays a price for the up to four times a month he uses Western Union to send money to his wife in Mexico. Gutierrez, 32, said he liked Western Union's quick service but figured its higher costs eat up about $80 out of the $800 he sends each month. Fees for local providers of Western Union and similar wire services range between $10 and $15 per transaction, compared to $1 to $3 for a debit card, and they come with less competitive rates for changing dollars into Latin American currencies.

Even with these advantages, bankers said it would take time to gain the attention and trust of Spanish-speaking immigrants like Damian Flores, an Argentine janitor who uses Western Union "because I don't know other services." "Is (an ATM card) trustworthy?" asked fellow Argentine Alejandra Martinez, voicing a distrust of banks that poses another major challenge for those who are looking to attract Latino clients. Salvador Lara, owner of Super Tienda Latina at 6005 Monona Drive, said there were still advantages to the Western Union service he has used as an immigrant and now offers as a businessman. It was available seven days a week, he said, and was a good bet for immigrants with family members in remote, rural areas. "Western Union gets to every place in the world," Lara said.

Illustration: JOSEPH W. JACKSON III/WSJ Juan Hernandez Huesca, left, and Christopher Purdy, both of The Bruce Co., are working with the Hilldale branch of US Bank to set up a cheaper way for Hernandez and other Latino employees to send money to relatives in Mexico. Purdy says some 15 to 20 company workers might be interested in a US Bank system that uses ATM cards to send money abroad.

WSJ graphic Source: Institutions listed, WSJ research Options for sending money to Mexico

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