Félix uses USDC as a SWIFT alternative

The opportunity

The cost of sending money from the US to Mexico can be high due to fees and slow settlement from banks and payment processors.

The solution

Félix uses USDC, a regulated digital currency, to reduce the cost of transferring customer funds from the US to Mexico. This approach not only decreases remittance fees for Felix’s consumers but also expands the company's profit margins.

40%

Decrease in rate Félix could offer users while increasing profitability

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Félix is a Miami-based financial technology company that allows users to send cross-border payments from the US to Mexico using a chat-based experience in WhatsApp.

Products

USDC

Circle Mint

Regions

Latin America

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Rising remittances, persistent challenges

In 2022, remittance flows into Latin America and the Caribbean increased by 11.3%, reaching $145 billion, following a record increase of 26.5% in 2021. Even with the growing demand for cross-border payments, the process of sending money continues to be both inefficient and costly.

Cash remains the dominant method for sending remittances. Typically, immigrants visit a cash agent in the US, hand over their money, and pay a significant fee—around $10 to send $100, according to Félix CEO Manuel Godoy. A reason the fees are so high is that money can take 3 to 5 days to make it from the agent in the US to the payout agent in Mexico using the SWIFT network and its correspondent banks. This means the payout agent in Mexico needs to be pre-funded with multiple days of payout funds, which often requires an expensive loan.

Félix saw an innovative opportunity to reduce time and cost burdens in order to facilitate cross-border payments for immigrants. They achieved this by integrating USDC, a stable digital currency that is redeemable 1:1 for US dollars, with WhatsApp’s wide usage in Latin America, blending the power of blockchain cross-border payments with user-friendly communication.

Félix story

Félix chose USDC instead of traditional bank transfers for sending dollars to Mexico for three reasons: USDC settles near-instantly on nights and weekends, reducing Félix's pre-funding requirements; Félix could lower their transaction fee costs from $4.98 to $2.99, providing 40% savings on remittances for Félix customers; and Félix was able to increase their profitability. By choosing USDC, Félix prioritized customer savings while also growing their own business.

Streamlining US-Mexico payments with stablecoin technology

Integrating USDC for US-Mexico remittances is straightforward and fully compliant with legal and regulatory standards.

Félix set up their transfer system using Circle Mint, Stellar as their blockchain partner, and Bitso as their exchange for converting USDC into Mexican pesos upon arrival in Mexico. This efficient process allows Félix to pay out recipients almost instantly, even during nights and weekends, without the need to pre-fund large sums of pesos.

Recognizing the appeal of in-person money agents, where customers can easily communicate their needs and have the process explained to them, Félix replicated this experience with a modern twist. They introduced an AI-powered chatbot in WhatsApp, named "Félix," providing a familiar and non-intimidating interface. This approach taps into the daily habits of the Latin American population, who commonly use WhatsApp, making financial transactions as simple as everyday conversations.

As a customer, sending and receiving money with Félix is a simple process with instant results. When money is sent through Félix, the US dollars, paid via debit or ACH, are processed through a payment processor. These funds are then exchanged for USDC via Circle Mint, providing a near-instant and secure digital transfer. Next, Félix uses the low-cost Stellar blockchain to send this USDC to Bitso, a prominent crypto exchange in Mexico, where it's converted into Mexican pesos. Finally, the pesos are deposited into a local bank account in Mexico through SPEI, Mexico’s interbank transfer system, completing the transaction swiftly and efficiently.

Recently, major Latin American financial technology brands Nubank and Mercado Pago partnered with Félix to offer US-to-Mexico remittances inside of those companies’ products, extending Félix’s reach to even more customers.

The results

Today, Félix’s innovative approach, bolstered by Circle's robust stablecoin infrastructure, is a beneficial and straightforward way for users to navigate cross-border payments.

By converting local currencies into USDC, they reduce the need for pre-funding, surpassing traditional SWIFT methods in both speed and cost. The resulting savings enable Félix to offer competitive pricing and superior service, while simultaneously boosting their profitability.

By the numbers

40%