Money transfer company WorldRemit expanding into Nevada

WorldRemit, which allows people to send money abroad from their computer or phone, is expanding into Nevada to tap the state’s large Hispanic population.

“We are penetrating Latin America now, and Nevada is a key state for exactly that reason,” Erick Schneider, WorldRemit’s head of Latin American business, said in a telephone interview.

People with Latin American roots account for nearly one-third of Nevada’s 3 million-plus residents. Most of them are from Mexico, the largest country for remittances in Latin America.

Money transfers from the U.S. to Latin America, especially Mexico, jumped late last year amid concern that President-elect Donald Trump would seek to impose taxes on remittances. Remittances to Mexico rose 9 percent to $27 billion in 2016.

“We still see very aggressive growth, especially to Central America, in the first half of 2017,” said Schneider.

WorldRemit received a license to offer its services in Nevada in September and launched this week, making it the 48th U.S. state in which it is active.

WorldRemit doesn’t accept cash or have physical locations aside from corporate offices, enabling the company to keep its transfer fees low.

It charges a fixed fee that typically ranges from $2.99 to $7.99 regardless of the amount sent, said Schneider. Fees to Latin America start at $0.99 plus a 1 percent currency conversion charge.

WorldRemit’s average fee comes out below 5 percent, said Schneider. That compares with a market average of between 7 and 10 percent, with some as high as 15 percent, he said.

WorldRemit clients send money to family or friends abroad by entering their bank account, debit card or credit card details into the company’s company’s website or mobile app. Two-thirds of WorldRemit’s transactions are sent by mobile phone.

The recipient can either pick up cash at a specific location or receive it electronically.

No more than 10 percent of global remittance transactions are done digitally, said Schneider. The remaining 90 percent are done through physical locations such as Western Union or MoneyGram affiliates in stores or people traveling between countries. Western Union and MoneyGram each have at least 20 locations in Las Vegas, based on a Google search.

“A lot of people are still using the model of ‘I have a cousin who is flying from Las Vegas down to Ensenada,” said Schneider, referring to personal deliveries of cash back home.

However, the number of digital transactions will increase as people become more comfortable with the concept of mobile banking, said Schneider.

Digital transfers will account for about 60 percent of the remittance market by 2021, according to the GSM Association, a trade body that represents the interests of mobile operators worldwide.

WorldRemit was founded by a Ismail Ahmed, a Somaliland immigrant living in London. Ahmed founded the company in 2010 after a stint at the United Nations Remittance Program, where he helped African money transfer companies comply with anti-money laundering rules.

Contact Todd Prince at tprince@reviewjournal.com or 702-383-0386. Follow @toddprincetv on Twitter.