In recent years, payments sent by immigrant workers back to their home countries have soared. According to the Inter-American Development Bank (IDB), in 2003 Latin America received $38 billion of those payments, up from $32 billion in 2002. Of that sum, immigrants in the United States sent approximately 75 percent.

The size of this flow of money from the United States corresponds to the increase in the Hispanic population living and working in the United States; according to the U.S. Census Bureau, their numbers grew by 50 percent from 1990 to 2000 and in 2003 totaled 39.9 million. The majority of Hispanics in the United States come from Mexico, the world's largest remittance-receiving country; a 2003 Pew Hispanic Center report says that 18 percent of all adults there receive remittances originating in the United States.

Remittances--noncredit payments, which are often sent to a distant place--can have an even larger impact on smaller countries (see the map on page 20). The 2003 Pew report indicates that in E1 Salvador 28 percent of the adults receive remittances, and those remittances are equivalent to 18 percent of the country's gross domestic product. According to the IDB, remittances sent to countries in Latin America in 2003 totaled more than the combined amount of foreign direct investment in and official development assistance to Latin America.

Choosing among remittance methods

Migrants have a choice of how they transfer their money back to their homeland. Informal--and often less secure--means such as sending cash with a courier or through the mail remain the choice of 17 percent of Latin American remitters, according to the Pew report, though this figure has been on the decline. Wire transfer companies currently dominate the remittance market, with 70 percent of Latin American remittances sent through companies such as Western Union and Moneygram. These companies have gained the trust and loyalty of the Hispanic community and have adapted to the needs of this community by offering convenient locations, hours, and a comfortable business environment for Hispanic immigrants.