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This paper analyzes the potential for fintech to facilitate cheaper and more efficient remittances, and to enhance financial inclusion in Central America. Digital remittances remain nascent in the region, primarily reflecting behavioral inertia, small cost advantages of digital over traditional channels, and inadequate financial literacy. Through expanded alliances between traditional and fintech operators, digital remittances can further reduce transaction costs and reach those remote, low-income households in a timely and secure manner. A meaningful expansion of fintech remittances necessitates an enabling regulatory environment for digital financial services, and KYC and AML/CFT requirements proportionate to the value of transfers.

Macroeconomics --- Economics: General --- Exports and Imports --- Industries: Financial Services --- Finance: General --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Remittances --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Financial Institutions and Services: Government Policy and Regulation --- Production, Pricing, and Market Structure --- Size Distribution of Firms --- Economywide Country Studies: Latin America --- Caribbean --- Financial Markets and the Macroeconomy --- Economic & financial crises & disasters --- Economics of specific sectors --- International economics --- Computer applications in industry & technology --- Finance --- Balance of payments --- Mobile banking --- Technology --- Financial inclusion --- Financial markets --- Fintech --- Currency crises --- Informal sector --- Economics --- International finance --- Financial services industry --- Technological innovations --- Banks and banking, Mobile --- Guatemala