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Business, politics, and the economy are defined by both change and continuity, and the money transfer industry is not insulated from these trends. Although the fundamentals of growth are more or less the same—changing needs or behavior of senders and recipients, competition among financial intermediaries, policies and regulations, use of innovation and technology—there are several key developments within those that will shape this year’s performance at an estimated 2 percent growth.

This modest growth will affect purchasing power in countries highly dependent on remittances, such as Honduras, Nicaragua, and Guatemala. Overall, remittances represented 5 percent of all of Latin America and the Caribbean’s GDP, and their contraction will be reflected in the economic performance of many countries, reducing private consumption.

At least seven factors have been identified that will have a modest impact.

First, the decline in the number of remittance senders will continue in 2026, though in a smaller proportion. It will be driven mostly by declines in migration and increases in deportations.

Given current trends, irregular migration in 2026 may be estimated at 380,000 people, or 15 percent of the average number of arrivals between 2020 and 2024. This number is similar to or slightly higher than irregular arrivals in 2025 (360,000 people). This point matters because irregular migration captured 80 percent of Central American and some South American migration and 50 percent of Mexican migration. Moreover, most of these migrants began sending money in the same year they arrived, thus contributing to the significant growth of transactions during that period. As arrivals began to decline, so too did new senders.

Moreover, deportations in 2026 will likely continue a similar number from 2025 under a conflictive political environment but targeting certain nationalities at higher risk of deportation, such as those under expired humanitarian parole, those with expired work permits and no authorization to stay in the country, those with a notice to appear in court, and those on deportation orders.

In turn, the number of remitters may decline by negative 3 percent to negative 5 percent, depending on trends in each country.

Second, the principal amount will not increase above 5 percent due to income constraints unless migrants choose to tap into their savings (half of their savings are committed to emergencies). Last year, the sending principal increased by 20 percent, which explains the growth seen during that year. However, that effort raised the income share of remittances sent from 15 percent to 18 percent. Keeping both wage increases and the use of savings in mind, and assuming continued remitting, indicates that migrants will continue to remit amounts similar to those in 2025.

Third, migrants’ responses to the tax on remittances reflect important trends. Importantly, the choice of money transfer method is not fixed; people may switch between cash and digital transactions at any time. The calculation of transactions by companies indicates that the pattern remains 47 percent cash and 53 percent digital. 

However, when migrants are asked about their previous transactions, there are some differences. A survey of 200 migrants in February 2026 about whether they had paid the 1 percent tax and what sending method they used conducted for this article showed important results. Some people remitted the prior transaction in cash, whereas others shifted to digital. Another critical development is the number of transactions, which increased from 14 to 18 per year, a trend that led to revenue increases across almost all money-transmitting companies.

Moreover, when migrants were asked whether they paid the tax on their last transaction, 40 percent said they did. The percentage who responded varied by the sending method they were currently using. More importantly, 60 percent of migrants who paid the tax said they would continue to do so, while the remaining 40 percent said they would use another method (such as a mobile application or a prepaid card).

Fourth, one key consequence of the remittance tax is a kind of race to offer and market digital transactions. The tax may have pushed MTOs to market their existing digital platforms faster or to accelerate their introduction. On the payout, money transfer companies are seeking to strengthen their relationships with financial institutions that accept deposit transactions, and many payers are further promoting account deposits. Their interest stems from the need to accelerate financial inclusion and the use of digital payment vehicles in the country, which remains low in some places at less than 20 percent use among adults.

Fifth, constraints from various regulatory bodies are adding complexity and difficulties to the industry. Financial regulatory agencies have cautioned against considering transactions from people without work authorization. State legislatures in seven states want to add taxes on remittances, and four other legislatures want to increase scrutiny of identification verification requirements.

Sixth, competition is occurring in different segments. The partnership and acquisition of Intermex by Western Union challenge how its market share could fluctuate. Intermex’s volume in Latin America is double that of Western Union’s, but both companies have experienced low growth.

At the same time, in addition to offering digital transfers on the front end, many companies are adopting stablecoins on the back end to manage foreign exchange and settle their transactions. They are also further exploring and introducing artificial intelligence methods to process transactions, from consumer support to AML compliance. These developments are adding complexities in their operations and tightening competition.

Seven, the political crisis and pending transition in Venezuela added this country as a critically important remittance corridor, with over 750,000 transactions originating from the US, and more companies offering transfers to that country. As geopolitical developments continue and Cuba confronts its economic collapse and a potential transition to economic stabilization, the money transfer marketplace will be a key centerpiece of a humanitarian recovery.

Although these are critical determinants, there is uncertainty about behavior and structural change. For example, will migrants choose to send less money given their economic constraints? Will the increases in oil prices and other economic constraints lead to unemployment in the US among Latino migrants?

Overall, a preliminary review of available data suggests that the region shows a modest 2 percent growth. Growth in Mexico remains a problem, distinct from what occurs in other countries, due to intrinsic demographic patterns among Mexican remitters. This growth is to be taken as the baseline, whereas possible upward trends may result from migrant resilience. Finally, it is important to consider other factors, such as slowing economic activity in some countries, accompanied by potential political turmoil in countries like Nicaragua, Ecuador, Honduras, or Guatemala, which may shift migration intentions and further pressure irregular arrivals at the Mexico-US border.