American real estate mogul and presidential hopeful Donald Trump has announced his intentions to impound all remittance payments derived from “illegal wages” and increase fees on all temporary visas issued to Mexican CEOs and diplomats. Trump also vows to increase fees on all border crossing cards – of which we issue about 1 million to Mexican nationals each year - and increase fees on all NAFTA worker visas from Mexico.
‘Mexico must pay’
The majority of migrant Mexican workers send most of their salaries back to Mexico to their families. According to the World Bank, three of the most frequently used remittance service companies – Western Union (6.1%), MoneyGram (6.64%), CitiBank (14.59%) charge 9.11% on average, excluding the conversion fees.
If Trump’s immigration plan ever goes through, it will likely create a disastrous working environment for any foreign immigrants in the U.S., and will increase the transaction fees of remittance outlets, which are already taking a large cut of the migrants’ earnings.
Trump wrote on his official presidential campaign website:
“Mexico continues to make billions on not only our bad trade deals but also relies heavily on the billions of dollars in remittances sent from illegal immigrants in the United States back to Mexico (US$22 billion in 2013 alone) […] Mexico must pay for the wall and, until they do, the United States will, among other things: impound all remittance payments derived from illegal wages.”
Bitcoin as a solution
Many bitcoin exchanges and bitcoin payments service providers have been offering a fully customized exchange platform, where users are able to cash out their bitcoins to local banks, remittance outlets and ATMs.
Bitcoin withdrawals in Mexico especially have been facilitated by several of the country’s bitcoin exchanges, including Bitso, Volabit and Unisend. Bitso in specific has been aggressively pushing its joint project with the Mexican Government to develop a platform for quick cross-border payments and remittances across South America. This also means that Bitso will support all local currencies in South America, through local bank and remittance service provider’s partnerships.
The world’s first peer-to-peer digital cash, money-transfer network and global bitcoin remittance application Abra has also announced that the platform will be launched very soon, which will enable Mexican immigrants to transfer cash instantaneously, without any transfer fees or bank accounts.
The Abra network is similar to Western Union, where individual Abra Teller (brokers) deal with customers in regions across the world. For example, if a Mexican family wants to withdraw bitcoin that has been sent from one of its family members in the U.S, they could contact an Abra teller nearest to them, set a meetup and receive cash at a lower cost.
CEO Bill Barhydt explained, “Abra tellers use smartphones to allow any other Abra users to deposit cash or withdraw cash from anywhere in the world.”