“They take a commission when they exchange dollars to pesos. That’s why it’s free,” Martinez said. “It’s better to just pay the costs up front.” He now offers transfers to the Dominican Republic for $2, lower than most other neighborhood businesses.
Every time a remittance is sent, revenues are split between three parties: the company that takes the transaction, an agent in the U.S., and an agent in the receiving country.
About $2.6 billion was sent from the U.S. to the Dominican Republic in 2005, a 40 percent increase over 2001. But even though the price wars have brought savings to Fordham’s 10,000-strong Dominican community, costs for transfers to Mexico – with a thriving market of 1,500 neighborhood residents – have not decreased as drastically.
It cost a nationwide average of $28.16 to send $300 to Mexico in 1999, according to a study by the Mexican government’s Center for Public Finance Studies. In 2005, the cost was down to an average of $10.64. In Fordham, prices linger around that average.
But the competition for Mexican customers is on the rise. Mexicans in the U.S. sent out about $20 billion in remittances to their homeland last year, more than doubling the amount sent in 2001.
At Jayson Multi Service, manager Leonarda Cruz recently rolled out a Mexico-only special, charging customers a flat fee of $15 for transfers up to $2,000. She gets an average of eight customers a day, she said.
She’s having trouble contending with giant Delgado Travel, with about 300 branches across the country, which attracts most Mexican customers in the neighborhood. Delgado still charges a percentage fee, which most businesses in Fordham have dropped – but it’s managed to become a mainstay for the area’s Mexican immigrants.
A van hawking Mexican food is parked outside the store at 184th Street and Grand Concourse during the day. After making their transfers, many customers spring for a beef taco piled with guacamole or a hot enchilada.
The extra cost of sending money through Delgado is not a problem, customers said, because it is perceived as the most reliable company. Ignacio Arellano, 43, uses Delgado Travel to send about $300 to his wife and three children in Mexico whenever he gets the chance. He washes dishes at a restaurant and hasn’t seen his family in five years.
“It’s safer,” he said. Sending money through the company gives him peace of mind, he added.
The money-transfer businesses that can’t afford to join the price battle have changed their focus. Some owners make ends meet by selling cell phones, electronics and insurance.
And others, like Edwin Guerrero of Mi Gente Multiservices, are clinging to the hope that word-of-mouth and good customer service will help them stay afloat. “There’s always going to be competition,” Guerrero said. “Whoever does things right, stays.”
