How to Send Money to Latin America Safely and Cheaply: The 2026 Guide

Sending money to family in Latin America is a monthly responsibility for millions of Latinos in the United States. In 2025, migrants sent more than $155 billion in remittances to Latin America and the Caribbean — a figure that exceeds foreign direct investment in many countries. But between fees, unfavorable exchange rates, and the new 1% federal tax, many households lose hundreds of dollars a year unnecessarily. This guide explains how to maximize every dollar you send.

Why does choosing the right service matter so much?

Consider this example: if you send $400 per month to your family in Mexico, that is $4,800 a year. A 2% fee difference between services equals $96 per year. If the exchange rate is also 3% less favorable, that is nearly $150 more lost. In total, choosing the wrong service can cost you $200 to $250 extra per year — money that should reach your family.

The two costs you must always compare

1. The service fee: The fixed or percentage charge to make the transfer — anywhere from $0 to $12 or more for cash transfers. **2. The exchange rate:** This is where many services make their real money. If the real (mid-market) rate is 17.50 pesos per dollar but the service offers 16.80, that difference on a $400 transfer means 280 fewer pesos for your family. Always compare the offered rate against the real rate at Google or xe.com.

Service comparison in 2026

Wise: Best exchange rate on the market — uses the mid-market rate with no markup. Charges 0.4% to 1.5% plus a small fixed fee. For $500 to Mexico: approximately $3 to $7 total. Exempt from the 1% tax. **Remitly:** First transfer frequently free. After that, $2 to $5 for popular Latin American destinations. Competitive rate. No 1% tax with debit card or bank account. "Express" (minutes) vs "Economy" (1-3 days) at lower cost. **Xoom (from PayPal):** Competitive rates, good coverage. $4 to $5 fee from bank account. No 1% tax. **Western Union online/app:** Same fees as at the counter but no 1% if you pay with a debit card or bank account. Advantage: enormous agent network for recipients without a bank account. **Western Union at the counter with cash:** Regular fees plus the 1% federal tax. For $500: approximately $12 in total charges.

The federal 1% tax: what you need to know

Since January 1, 2026, the One Big Beautiful Bill Act established a 1% federal tax on international remittances paid in cash, money orders, or cashier's checks. It is completely exempt if you pay with a bank account, U.S.-issued debit or credit card, or digital wallet (Apple Pay, Google Pay). If you still go to the counter with cash, you are paying more than you need to. The solution: open a bank account with your ITIN and always pay digitally.

How to protect yourself from remittance scams

Warning signs: Exchange rates that seem too good to be true. Services asking for full bank account access. Individuals offering informal transfers "without fees" on social media. Apps not found in official stores (App Store, Google Play). **Golden rule:** Only use services regulated by FinCEN. Western Union, MoneyGram, Wise, Remitly, and Xoom are legitimate registered operators.

Tips to maximize what reaches your family

Send less frequently in larger amounts — fixed fees become proportionally smaller. Tell your family the exact day you send so they can exchange at local currency houses when rates are favorable. If your family member has a bank account, always use digital transfer and avoid cash withdrawals with their additional fees.

Connect with Atton Finance

At Atton Finance we help you optimize how you send money as part of your complete financial plan. If you do not yet have a bank account in Florida, we can guide you on how to open one with an ITIN so you can take advantage of all available tax exemptions.

*This article is for informational and educational purposes only. Fees and exchange rates mentioned are approximate as of the publication date and may change. This does not constitute financial advice. Check current terms on each platform before making a transfer.*