BTS

BBVA USA
Family Remittances
USA to LATAM
BBVA Bancomer Transfer Services Inc.
Washington DC
June 28, 2005
Bancomer Transfer Services (BTS)
„ Subsidiary of BBVA Bancomer Financial Holdings
„ BTS’ mission is to provide high quality payment services
for family remittances in LATAM
„ High quality payment services are supported with a
propietary technology platform
„ Technology platform incorporates one of the most
stringent compliance programs and a state-of-the art AML
monitoring system
„ BTS acts as a money transfer engine, allowing MT’s to
provide their consumer with a reliable and secure
alternative to wire money at affordable prices
„ Claims ratio: 0.02%
BTS has been promoting switching to formal payment channels, which
provides benefits to all the participants of the remittances market
„ In Mexico, family remittances started to switch to formal
payment channels back in the year 2000
„ Many new participants joined the industry, due to formal
access to formal payment networks
„ With access to formal payment networks, new participants
were able to offer:
„ High quality service at payment to beneficiaries
„ Competitive prices
„ Strengthen compliance programs
„ This provides the consumer with more reliable and secure
alternatives to wire money at affordable prices
Source: Banxico
90% of the family remittances to Mexico are transferred
electronically and mainly through formal payment channels …
Family Remittances to Mexico
$20,000
Market with Diverse
Participants
Market Dominated by
Western Union & MoneyGram
$15,000
$10,000
BTS
$5,000
$0
Source: Banxico
(USD $ mill)
Total
Others
BTS
Informal Activity
Rest of the Electronic Transfers Market
1996 1997 1998 1999 2000 2001 2002 2003 2004
4,224 2,227
4,865 2,377
5,627 1,974
5,909 6,279
8,896 1,017
9,815 13,266
2,002
1,930 1,112
1,883 16,613
2,117
77
136
216
189
750
3,540 4,797 5,602 6,263
Electronic Transfers 2,145 2,502 3,034 3,746 3,599 4,244 4,001 5,779 8,233
… and the remittances from the United States to
Mexico could exceed $20 Billion in 2005
15%
$20.8B
13.0%
20000
$16.6B
10%
$13.3B
6.3%
5%
$6.6B
15000
10000
$10.5B
$9.3B 5.0%
25000
5.3%
3.1%
3.1%
5000
0
0%
2000
2001
2002
Average cost per wire
2003
2004
2005 e
Remittances US$ Billion
Source: Pew Hispanic Center Report, The Remittance Marketplace, June 2004
BBVA Bancomer through its BTS solution, has played
a key role in lowering consumer costs
Transactions
(000´s)
17,376
15,042
12,657
9,633
37
Funds
192
415
714
657
2,174
1995
1996
1997
1998
1999
2000
$23
$77
$136
$216
$189
$750
2001
$3,540
2002
2003
$4,797 $5,603
2004
$6,556
Consumer cost of wiring $360
(USD)
$50
$22
$45
$18
Market with a Few
Participants
$40
$35
$14
$13
$28
$27
$26
$22
1995
1996
1997
1998
$31
$11
Market with New
Participants
$23
$18
$11
$10
$10
$20
$10
$13
$7
$11
$5
$6
$4
$6
$4
$6
1999
2000
2001
2002
2003
2004
(USD $ mill)
Mexican Banks have participated in 2/3 of family
remittance payments
1.8
2003
2004
2005
1.6
Non electronic
1.4
USD $ Billions
1.2
Other electronic payments
1.0
0.8
Other banks
0.6
0.4
BBVA Bancomer
0.2
0.0
E
F
M
A
M
J
E
F
M
A
A
S
O
N
D
E
BBVA Bancomer
0.37
0.36
0.43
0.44
0.51
0.51
0.50
0.55
0.51
0.53
0.46
0.43
0.39
0.42
0.51
0.52
0.60
0.56
0.56
0.60
0.55
0.58
0.50
0.48
0.46
0.46
Otros Bancos
0.15
0.19
0.17
0.22
0.19
0.22
0.25
0.19
0.31
0.15
0.05
0.31
0.18
0.20
0.33
0.32
0.36
0.39
0.34
0.39
0.36
0.29
0.39
0.38
0.31
0.36
0.32
USD $ billones
J
A
S
O
N
D
M
J
J
F
Otros electrónicos
0.28
0.20
0.23
0.27
0.32
0.32
0.30
0.33
0.31
0.33
0.34
0.29
0.26
0.29
0.33
0.35
0.44
0.41
0.41
0.43
0.35
0.38
0.32
0.33
0.31
No electrónicos
0.13
0.12
0.13
0.14
0.19
0.17
0.18
0.17
0.17
0.15
0.13
0.21
0.14
0.15
0.18
0.18
0.20
0.18
0.18
0.18
0.16
0.17
0.16
0.24
0.16
0.15
Total
0.93
0.87
0.96
1.07
1.21
1.22
1.23
1.25
1.29
1.16
0.97
1.24
0.97
1.05
1.35
1.37
1.60
1.53
1.49
1.60
1.42
1.41
1.37
1.43
1.25
1.29
2003
2004
2005
Fuente: Banco de México, 2005
More than 61% of the payments processed through Banks
were
paid by BBVA Bancomer during 2004
IN 2004, BBVA Bancomer paid almost half of the
remittances that were transferred electronically
Payment of family remittances transferred through electronic wires
(USD $ Mill)
2004: $14,496
Other
$8,233
57%
Source: Banxico
BBVA
Bancomer
$6,263
43%
In 2005, BTS’s volume continues to grow at
two digit rates
15.5%
15.5%
2Q 03-2Q 04
3Q 03-3Q 04
13.7%
17.4%
1Q 04-1Q 05
4Q 03-4Q 04
13.7%
12.0%
1Q 03-1Q 04
19.0%
AM 04-AM 05
15.4%
2Q 03-2Q 04
3Q 03-3Q 04
15.1%
18.4%
1Q 04-1Q 05
4Q 03-4Q 04
18.8%
1,308,815
1,158,364
1,599,626
1,346,941
1,685,974
1,423,804
1,789,770
1,733,450
1,456,982
1,346,941
1,167,313
3,419,193
3,064,893
4,205,373
3,698,527
4,520,748
3,852,114
4,594,386
4,042,293
4,562,437
3,950,592
3,698,527
3,202,190
1Q 03-1Q 04
1,555,354
Funds
(USD 000)
Transactions
13.0%
AM 04-AM05
This confirms that BBVA Bancomer’s leading service is the
consumer’s top choice to wire money back to Mexico
Based on Mexico’s success, we are extending BTS’s
international network ...
Banks
MT’s
Retail:
BFS
22 Locations:
• Texas
• California
México
Wholesale:
Merchants
Harris
Wells Fargo,etc.
Agents
USPS
BTS
Banco
Agrícola
+ 35,000 third party POS
Central
America &
Caribean
Guatemala
• Banco de Desarrollo
Rural.
• Banco Uno
• Banco Industrial
El Salvador
• Banco Agrícola, S.A.
• Banco Salvadoreño
• Banco Uno
Nicaragua
• Banco Uno
• Banco de la
Producción
Honduras
• Banco Mercantil
• Banco Uno
Dominican Rep.
• Banco del Progreso
• Banco BHD
South America
Perú
Colombia
Venezuela
Ecuador
• BBVA Banco Continental • BBVA Colombia
• Banco Davivienda
• Interbank
• Banco GranAhorrar
Argentina
• Banco Colmena
• BBVA Banco Frances
• BBVA Banco Provincial
Chile
• BBVA Banco BHIF
Brazil
Paraguay
Bolivia
• BBVA Paraguay
10
10 locations:
locations:
•• Madrid
Madrid
•• Barcelona
Barcelona
•• Valencia
Valencia
•• Lorca
Lorca
11 Agent:
Agent: 22 Offices
Offices
Madrid
and
Madrid and Málaga
Málaga
Africa
In progress
• Banco de Guayaquil
• Banco del Austro
• Banco Internacional
Uruguay
• BBVA Uruguay
Dinero
Dinero
Express
Express
• Bradesco
• Banco Mercantil
• Banco Bisa
Asia
In progress
And into new market segments with ad-hoc products
USA
Account - Account
“Intercuenta Express”
Banked
Unbanked
MEX
Banked
Cash – Account
Envíos de Dinero Card
Banked
Cash - Cash
Unbanked
Unbanked
CONCLUSIONS
„ With formal channels the sender enjoys better and more
alternatives to wire money back home
„ BTS’s solutions provide the following advantages:
„ Point of sale has less claims and can provide better service
to their customers (0.02%)
„ The transmitter has better control of activities and can reach
many destinations through the same pipeline
„ Payment entities can rely that the most stringent compliance
and monitoring applictions screen every transaction
„ Beneficiary can always count that the money will be ready for
payment
„ Due dilligence is performed to network participants in order to
join the program
CONCLUSIONS
„ And the most important benefit of formal payment channels:
„ Consumers are wiring 31% more money back home:
„ 1999 average face value per transaction: $287 USD
„ 2005 average face value per transaction: $377 USD
„ At lower prices:
300% price reduction !!!