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A Silicon Valley tech company has partnered with Redwood City and East Palo Alto to promote a new platform that simplifies transferring money to users’ families in Mexico. The platform allows users to do so free of charge and preserve more of their income.
“Many of our immigrant families are often vulnerable to scams or forced to carry large amounts of cash, making them susceptible to theft or loss,” said Redwood City Planning Commissioner Maggie Cornejo. “So this is a safe way to put it in a card and prevent scams, robbery or just losing the cash.”
Prósperos, co-founded by Salvador Chavez and Vinay Pai, is an early-stage start-up that offers fee-free money transfer services. Prósperos is specifically designed to make sending remittances to Mexico simple and efficient, Pai said.
The founders have teamed up with Peninsula leaders to raise awareness about the platform and enhance financial inclusion and security in underserved communities. Together, they aspire to address the challenges faced by immigrant families who often rely on costly check-cashing services and traditional transfer methods that carry high fees and risks of theft.
In a press conference held in Redwood City on Thursday, the founders highlighted that for families with limited financial resources, these transaction fees can accumulate over time, creating a significant financial burden. Additionally, using cash-based services increases physical risks, as individuals carrying large amounts of cash are often exposed to theft or loss. They added how many also lack trust in traditional financial institutions, stemming from concerns about scams and security vulnerabilities that disproportionately affect Black and Latino consumers.
Chavez elaborated that anyone can set up their account on a mobile app — available on iPhone and Android — within four minutes. Once that is done, the company issues two debit cards — one for the user in the United States and one for their family member abroad. The card is shipped free of cost to Mexico and can be used in any Latin American country except Venezuela, Honduras, Ecuador and Nicaragua. Pai explained that these exceptions are due to high inflation in those countries and limitations with Prósperos’ credit card processor, which does not operate there.
The partnership between Prósperos, Redwood City, and East Palo Alto focuses on promoting this digital remittance platform and empowering immigrant families by providing them with a secure, efficient way to send money home.
“I want to make sure our leaders and residents are aware of this, especially because 75% of our population speaks Spanish, which means they likely have some connection to someone in Mexico,” said Cornejo.
East Palo Alto Mayor Antonio Lopez noted his city is a “bank desert,” with limited access to local banking institutions. Many residents struggle to access financial services that they can trust.
“Prósperos is an innovative platform. People often ask, ‘What’s the catch?’ but there is no catch. These individuals are dedicating their time and expertise to address the needs and injustices faced by the most vulnerable members of our community, many of whom are Latino and people of color,” he said.
According to the Federal Reserve Bank of Dallas, Mexico is the second-highest receiver of remittances in the world, trailing only India. In 2022, remittances from the U.S. to Mexico reached $55.9 billion. Mexican migrants, who number approximately 11 million in the U.S., typically send the funds home to support their families. In 2002, the average monthly remittance to Mexico was $390.
Remittances can be made using several different modes, such as wire or bank transfers. Typically, these methods involve a fee and an exchange rate margin that eats into the individuals’ income.
Pai recalls the story of one of his customers in Salinas who earns a paycheck of $1,500 picking strawberries but faces substantial fees from local check-cashing stores. He spends $20 to $30 to cash each paycheck, totaling about $250 monthly. After cashing his paycheck, he typically sends $1,000 home to support his parents, incurring an additional 2% to 5% fee for the transfer. Overall, he loses nearly 7% of his income to access and send money.
“With Prósperos, he does everything for free,” Pai added.
Unlike traditional money transfer services, Prósperos allows users to set up their accounts for free and send funds without paying transaction fees.
The platform facilitates almost instant transfers, so family members can access funds as soon as they are sent, eliminating the need to travel to physical locations to receive money. The provided card can be used for everyday purchases, such as groceries, gas, or clothing.
Prósperos earns money by charging merchants a percentage of the transaction fees when users make everyday purchases with their cards. Users do not incur any fees for using the service, including for transferring money or cashing checks.
“Our mission is to eliminate those fees and give that money back to these hardworking people,” said Chavez during the conference.
But Prósperos’s usage extends beyond these two cities. According to Pai, since the product’s launch in July, they have gained customers in Napa, Sonoma, Salinas, Southern California, and most recently, Texas.
Although Prósperos is a Bay Area-based startup, the founders chose Salinas as the location for their office because of its large farmworker community.
“So there are a lot of new customers each year, and they’re the ones that are getting preyed upon by check cashing stores,” said Pai. “They think it’s acceptable to pay 2% to cash a check, 7% a week to get a loan, like an unsecured loan. So these poor farm workers are paying like 300% APR a year for a loan.”
By starting in Salinas, Prósperos aims to provide its services to a community that can benefit the most.
Additionally, the product complies with all banking laws, allowing even undocumented workers to open accounts using the Mexican matricula, a document issued by the Mexican consulate.
As for San Mateo County, both Cornejo and Lopez added they are committed to raising awareness about the platform within their communities to create a ripple effect of financial security and opportunity for all.
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