Money flowing from Las Vegas to Mexico

Tuesday, May 18, 2004 | 11:06 a.m.

For most people in the Las Vegas Valley, stretching paychecks means juggling bills, clipping coupons or cutting back on restaurants at the end of the month.

But for thousands of Hispanic immigrants, particularly the recently arrived, part of each paycheck goes to family members back home, to help pay for everything from food on the table to the roof overhead.

Census figures and state demographer projections show that the Hispanic immigrant population in the valley is among the fastest-growing in major U.S. cities. Now that nearly one of four Southern Nevadans is Hispanic, some 70 percent of whom are Mexican, a start-up company called American Cash Exchange chose Las Vegas as one of three cities -- along with Tucson and Phoenix -- to launch a new system for sending money to Mexico last week.

"Las Vegas is a good place to get our feet wet," said Debra Porter, spokeswoman for the New Jersey-based company, which last week finished installing 30 small machines for swiping an ATM-like card in Hispanic supermarkets and travel agencies around town.

Customers buy the cards, called "Poni," with dollars, the merchant swipes them, and the person in Mexico receiving the money uses a similar card to withdraw pesos from any ATM machine.

But Porter's company didn't just rely on demographic statistics in deciding to try out this new system in Las Vegas, which Porter said cuts out middlemen like banks, making the transaction faster and cheaper.

Before choosing Las Vegas, American Cash Exchange consulted two sociologists who work on both sides of the border studying immigration from Mexico and the sending of dollars from the United States back home: Douglas Massey, of Princeton University, and Jorge Durand, of Guadalajara University.

Durand said Nevada in general and Las Vegas in particular has proved to be one of the strongest magnets to Mexicans emigrating north in recent decades for three reasons: It's a 24-hour town so immigrants can work double shifts; there are jobs for women as well as men; and immigration authorities are seen as less aggressive than in some other cities with longer-standing Hispanic populations.

The fast-growing, hard-working population here may send larger amounts home than Mexican immigrants in other cities, Durand said. Nationwide, Mexicans sent about $13 billion south of the border last year, he said.

Durand said his data shows that about two-thirds of the Mexican immigrants who settle in the Las Vegas area are men, and about 40 percent of the immigrants are between 20 and 30 years old. Most of them work in hotels, restaurants and construction, he said. Data on the amount of cash sent from Las Vegas to Mexico was not available.

The sociologist also said that the American Cash Exchange has tapped him and Massey to create a foundation that will use 5 percent of the company's profits to fund projects in the Mexican states where immigrants come from and send money to. Those projects could range from buying soccer uniforms for local schools to building a water treatment plant, he said.

Outside the Miranda Travel Agency, located in the Supermercado del Pueblo near North Las Vegas Boulevard and Pecos Road, Marcelo Avalos, 29, was taking a brief break from unloading boxes for the supermarket Friday. A Poni card machine had been installed at the travel agency moments earlier.

Avalos came from Michoacan, Mexico, to Las Vegas two years ago. He sends about $500 home every two weeks. The money goes "to daily needs ... and to a house my family is building," he said.

A 2003 study done by the Pew Hispanic Center, a Washington-based research outfit, shows that Avalos matches a profile seen nationwide: He's from Michoacan, one of the five central highland states that are the source of most Mexican immigrants to the United States, and he arrived relatively recently. The Pew study showed that half of the nation's foreign-born Hispanics living less than 10 years in the United States sent money home regularly.

According to the study, most immigrants use wire transfer services like Western Union to send money home, with banks coming in a distant second.

Danielle Jimenez, spokeswoman for Western Union, would not supply sales figures for the Las Vegas area, but said that nationwide, transfers of money from the U.S. to Mexico had grown 15 percent during the first quarter of this year. Her company has same-day and next-day services linked to 6,000 Western Union branches in Mexico.

Daniel Ayala, senior vice president and cross-border payments manager for Wells Fargo bank, said the billion-dollar business grows at double-digit rates yearly, drawing more companies into the fray all the time. Ayala said his bank was the first to offer the service of sending money to Mexico seven years ago, with a system based on opening an account here and allowing Mexicans to withdraw money the next day from an affiliated bank with about 1,800 branches throughout Mexico.

"I equate it to the dot-com boom, where everybody wants to play," he said. "But the more the merrier -- it helps the consumer educate him or herself, about price, foreign exchange rates and so on."

Over at Giro Azteca on North Nellis Boulevard, a wire transfer agency that recently installed the Poni system, Luis Garcia, 22, came from Queretano, Mexico 18 months ago to work in construction in the Las Vegas Valley.

Garcia sends between $900 and $1,000 home every month. He said he planned to send money home before coming to the U.S., another pattern identified by the Pew study.

"We just want to get ahead," Garcia said of his family. "I came here to help."

Some of the money he earned building storage rooms in the valley was used for the construction of a house in Mexico for his family and some goes to pay for the schooling of his four brothers.

Garcia said the Poni card sounded like a good system because his family could receive pesos whenever they wanted, instead of having to wait on line during business hours. This could be particularly useful if there were ever an emergency, he said.

Juan Jose Lomeli, 30, from Jalisco -- another of the five Mexican states highlighted by the Pew study -- works for a company laying underground cable. He tried a Poni card last week. He said he sends about $300 home twice a month, some of which is helping to open a meat market his brother is managing.

Lomeli also mentioned the benefit of having the money available instantly and at any hour of the day and recalled the anxiety of having to wait three days for $600 to reach his family when his mother was operated on for sinusitis last year.

Apart from the convenience it offers, Porter said her company's system is also cheaper. This is because it uses what is known as an interbank exchange rate for dollars to pesos, a number published daily in USA Today and the New York Times. Most other companies create their own version of the exchange rate, which she said is usually higher.

Additionally, the fee American Cash Exchange charges for the service is lower than most competitors, she said.

On Monday, it would have cost someone in Las Vegas $271.85 to send 3,000 pesos to Mexico using her company's system. That takes into account an exchange rate of 11.54 pesos to the dollar and a fee of $12. Western Union, for example, would have charged $281.18 to send the same amount of pesos -- a difference of nearly $10 -- since the exchange rate listed on its Web site was 11.27 pesos to the dollar and its fee for sending that amount of money was $14.99.

In the end, the Pew study said, the money immigrants send back home is more than dollars and pesos.

It is an "expression of profound emotional bonds between relatives separated by geography."