Money sent home by migrants is one of the largest and most reliable flows of capital into the developing world — and it is quietly taxed by fees, delays and exchange-rate margins at every step. This is a look at who sends money to South America, why they send it, and what the act of sending actually costs. It is background, not a sales page.

Globally, remittances to low- and middle-income countries reached an estimated $685 billion in a recent year, at an average cost of 6.36% per transfer (World Bank estimates). That average cost, applied to that volume, means tens of billions of dollars a year are absorbed by the act of moving money rather than reaching the families it was meant for. For South America specifically, the flows are smaller than Mexico’s or India’s — but they follow the same pattern, and they carry the same friction.

Who sends, and from where

The South American diaspora in the United States is not one community. It is several, each with its own history and its own gravity.

Colombians are the largest of the Andean groups, concentrated in Florida, the New York metro area and Texas — a diaspora decades in the making. Peruvians have grown quickly, with hubs in New Jersey, Florida and California. Ecuadorians cluster heavily in the New York area, particularly Queens, in one of the tightest-knit remittance communities in the country. Layered over all of it is the more recent Venezuelan migration, which reshaped the region itself — most Venezuelans settled elsewhere in South America first, which is why support for families inside Venezuela so often travels through neighbors like Colombia rather than directly from the north. We cover that distinct situation, carefully and as education only, in the Venezuela diaspora explainer.

What unites them is the motive. This money is not investment or trade. It is rent covered, school fees paid, a parent’s medication bought, a sibling’s emergency handled from a thousand miles away. It is, as the house phrase goes, a population that is underserved, not forgotten.

What sending actually costs — and why it feels invisible

Ask most senders what a transfer costs and they will name the upfront fee. That is the visible cost, and it is real: on the Andean corridors it runs roughly 4.0% to 4.5% (World Bank / KNOMAD estimates). But two other costs ride along, and they are engineered to be hard to see.

The first is the exchange-rate margin. Providers quote a rate slightly worse than the true mid-market rate and keep the difference. It does not appear as a fee. It appears as “the rate,” and unless you compare it against the mid-market number, you never notice it left.

The second is time. Money that clears through the correspondent-banking network takes one to three business days, passing through intermediary banks that each take a cut and add a delay. For a floating currency like the Colombian peso or Peruvian sol, that delay is also exposure: the value can move against the recipient while the transfer is in flight.

Stack the three together and a “4% transfer” can quietly cost six or seven percent of what the sender actually parted with. Money moves the way a rumor does — fastest where the network is dense and slowest where it is needed most.

How the rails are changing

For most of modern history, sending money home meant a storefront, a paper form, and a wait. The first digital shift moved that storefront into an app — faster and cheaper, but still riding the same correspondent-banking rails underneath.

The newer shift is to move the dollar value itself over a settlement network, in seconds, and only convert to local currency at the receiving end. A stablecoin — a digital token pegged 1:1 to the US dollar — is the instrument that makes this practical. For the diaspora, the promise is not novelty; it is the removal of the two hidden costs. The amount that leaves is the amount that arrives minus a fee you can see, and it settles the same session instead of days later.

Movement is the settlement and yield layer that fintechs and remittance operators use to run these dollar-native corridors for emerging markets — sub-second settlement, over licensed rails in the US, Canada and the EU. It is infrastructure, not a consumer app; you send through a licensed operator, and Movement may be the rail underneath. We don’t draw the eye. We shake the hand. Operators building corridors into the region can look at how Movement handles corridor settlement.

What this means for a family

None of this changes why the money is sent. It changes how much of it survives the trip. For a household in Medellín, Arequipa or Cuenca, the difference between a rail that skims seven percent and one that charges a single visible fee is not abstract — it is a week of groceries, a utility bill, a margin of dignity. That is the whole reason corridors are worth writing about.

To see how each lane works in detail, start with the South America hub, then the country guides for Colombia, Peru and Ecuador.

Frequently asked questions

How much money does the South American diaspora send home? The Andean corridors from the US alone are estimated at around $10 billion a year combined — roughly $5 billion to Colombia and $2.5 billion each to Peru and Ecuador (World Bank / KNOMAD estimates). Globally, remittances to low- and middle-income countries reached an estimated $685 billion in a recent year.

Why do remittances cost so much? Three layers: the visible upfront fee, the exchange-rate margin most providers add quietly, and the time value lost while money clears the correspondent-banking network. The global average cost is 6.36% per transfer (World Bank), and the hidden layers often exceed the visible fee.

Are digital-dollar transfers cheaper for families? They can be, because moving dollar value over a settlement rail compresses both the exchange-rate margin and the multi-day delay into a single visible fee. This only holds through licensed, regulated operators — the stablecoin is the settlement layer, not a way around identity checks.

Where do most Ecuadorians and Colombians in the US live? Ecuadorians cluster heavily in the New York area, especially Queens. Colombians are concentrated in Florida, the New York metro and Texas. Peruvians have grown fastest in New Jersey, Florida and California.

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By Daniela Suárez. Last reviewed 2026-07-24. Figures are World Bank / KNOMAD estimates and may change. General information, not financial advice.