Here's what most people believe before they relocate: once I'm living abroad, banking will sort itself out. I'll open a local account, keep my home accounts running, maybe add Wise, and everything will flow.
That's not what happens.
Moving abroad does not make banking easier. In many cases, it makes it harder. Sometimes permanently. The systems you relied on at home start treating you like a risk. The new country you moved to doesn't trust you yet. And the fintech apps bridging the gap weren't designed to be your entire financial infrastructure.
If you're planning a move to Latin America, or you're already there and wondering why nothing works the way you expected, this is the reality check nobody gave you before you left.
Section 1
Why Expats Assume Banking Will Sort Itself Out
The assumption comes from a reasonable place. You've had bank accounts your whole life. You've opened accounts in different cities, maybe different states or provinces. It was paperwork, but it worked.
So you assume the same logic applies internationally. You'll land in Panama or Colombia or Mexico, walk into a bank, show your passport, and open an account. Or you'll just keep using Wise and Payoneer and it'll be fine because those work everywhere.
Three assumptions are doing the heavy lifting here, and all three are wrong.
Assumption 1: I'll just open a local account
Most countries will not open a bank account for a tourist. You need residency, and sometimes residency isn't enough. You need the right residency, with the right documentation, at the right bank, with the right referral. Walk into Banco General in Panama City as an American tourist and ask to open an account. They'll politely show you the door.
Assumption 2: Wise works everywhere
Wise is excellent. I use it. But Wise is not a bank. It's a money transmitter. The protections are different, the compliance thresholds are different, and the account closure policies are different. Wise works beautifully until the day it doesn't, and when that day comes, there's no branch to visit and no appeals process that reliably works.
Assumption 3: Once I leave, my home bank won't care
Your home bank will care more, not less. Non-resident status triggers compliance reviews. Foreign addresses trigger questions. Transaction patterns that look normal to you look like red flags to their systems. Some banks will quietly freeze your account. Others will close it outright and mail a check to an address you no longer live at.
Section 2
Tourist Banking vs Resident Banking
There's a hard line that most expats don't understand until they hit it.
As a tourist, you can spend money in a country. You can use ATMs, pay with cards, receive money through fintech apps. But you cannot open a local bank account in most of Latin America. You're a visitor. The banking system doesn't owe you anything.
As a resident, doors start to open. Local banks will consider you. You can receive funds locally. You can build financial infrastructure that doesn't depend on your home country.
But residency isn't a magic key. It's the start of a process, not the end of one.
Panama
Paraguay
Colombia
Mexico
The pattern is consistent across the region. Tourist status means limited access. Resident status means possible access. Neither means guaranteed access.
Section 3
Fintech Is a Bridge, Not a Foundation
This is where most expats get into trouble.
Wise, Payoneer, Mercury, Airwallex, and similar platforms feel like banks. They have apps. They have cards. They hold your money. You can send and receive transfers. For months or years, they work perfectly.
But they are not banks.
They're money transmitters or e-money institutions depending on jurisdiction. The regulatory framework is different. The protections are different. And critically, the account closure policies are different.
When a traditional bank closes your account, there are processes. Regulations require notice periods. You have some recourse.
When a fintech platform closes your account, you often get an email saying your account has been restricted, your funds will be released in 30 to 90 days, and the decision is final. No explanation. No appeal. No human to talk to.
This isn't fear mongering. It happens. It happens to people who did nothing wrong, whose only crime was tripping an algorithm or matching a pattern that triggered a compliance review.
The lesson isn't to avoid fintech. Fintech is essential for expats. The lesson is to never depend on a single platform for your entire financial life.
Section 4
The Proof of Address Trap
Here's a problem nobody warns you about until you're standing in a bank lobby watching your application get rejected.
Banks want proof of address. A utility bill in your name. A lease agreement. Something that shows you actually live where you say you live.
If you're renting an Airbnb, you don't have a utility bill. If your lease is informal, which is common in Latin America, you might not have documentation the bank accepts. If you're using a virtual address or a friend's address, that's often detectable and grounds for rejection.
The digital nomad reality, where you move every few months and your address is wherever you're currently sleeping, does not map to what banks expect. Their systems assume you have a fixed address with your name on utility bills. When you don't fit that pattern, you get flagged.
Plan your paper trail before you need it
Get a lease in your name even if it costs slightly more. Get utilities transferred to your name. Build the paper trail before you need it, not after. This is solvable, but it requires planning.
Section 5
Americans vs Canadians: Different Problems, Same Outcome
Americans Have Advantages
The US dollar is the global reserve currency. More platforms accept Americans. More countries use USD or peg to it. Panama literally uses the dollar as its currency.
But Americans also carry FATCA, the Foreign Account Tax Compliance Act. This means foreign banks have to report American account holders to the IRS. Many smaller banks, and even some larger ones, simply refuse American customers rather than deal with the compliance burden. You'll find banks in Europe, Asia, and even parts of Latin America that will not open accounts for US persons regardless of how much money you have.
Canadians Have Different Problems
Fewer fintech platforms serve Canadians. Revolut won't touch you. Binance left the country entirely. The major Canadian banks - TD, RBC, Scotiabank, BMO, CIBC - treat foreign addresses with suspicion and foreign transactions as potential fraud.
The telecom situation is worse, with carriers charging $15 to $16 per day for international roaming while Americans get unlimited Latin America coverage for a flat monthly fee.
Canadians also get blocked out of many crypto on-ramps and off-ramps that Americans take for granted. The regulatory environment is more restrictive, which means fewer options at every turn.
Both nationalities end up in the same place: needing to build financial infrastructure from scratch rather than relying on what worked at home.
Section 6
Why Wise Works Until It Doesn't
Wise is the foundation of most expat banking stacks. Low fees, real exchange rates, multi-currency accounts, a debit card that works globally. For most people, most of the time, it's excellent.
But Wise has limits.
- Large volume spikes can trigger reviews
- Receiving money from sources that look unusual can trigger reviews
- Having your IP address in a different country than your registered address can trigger reviews
- Mixing personal and business activity can trigger reviews
When a review happens, your account gets restricted. Sometimes for days. Sometimes for weeks. Sometimes permanently. And during that time, you cannot access your money.
This isn't unique to Wise. Payoneer does it. Mercury does it. Every fintech platform has compliance thresholds and automated systems that flag accounts.
The solution isn't to avoid these platforms. The solution is to never put yourself in a position where one platform's decision can strand you financially.
Section 7
Multi-Rail Design
The people who stay solvent as expats all do the same thing, whether they articulate it this way or not. They build multi-rail systems.
Two accounts minimum. Different platforms. Different jurisdictions if possible. Separation between spending money, receiving money, and storing money.
If Wise freezes your account, you have Payoneer. If Payoneer freezes your account, you have a local bank. If your local bank has issues, you have crypto you can liquidate. No single point of failure.
This isn't paranoid. This is basic risk management. The same logic that makes you diversify investments applies to diversifying financial infrastructure.
Section 8
Where Residency Fits
Residency helps. Having legal status in a country opens banking doors that stay closed to tourists. It gives you a foundation to build on.
But residency also creates obligations. Tax residency can follow legal residency. Reporting requirements can apply. The country you become resident in may expect things from you that tourists don't face.
The order of operations matters. Getting residency before you understand the banking landscape can lock you into a situation that's harder to navigate than if you'd planned it differently.
Residency without planning
Can actually reduce flexibility rather than increase it. Understand the banking landscape before committing to a specific country's residency program.
Conclusion
The Bottom Line
If you're planning to move abroad, or you've already moved and banking is harder than you expected, you're not doing anything wrong. The system is genuinely difficult. The assumptions most people carry - that banking sorts itself out, that fintech is the same as banking, that residency equals access - are wrong.
The people who make this work are the ones who plan their banking stack before they need it. Who build redundancy into their financial infrastructure. Who understand that the rules are different abroad and design accordingly.
Build a compliant stack that works for your situation, not a workaround you hope survives scrutiny.
If you want help mapping a banking stack that actually works for your passport, residency status, and the countries you're targeting, that's exactly what Plan B Expat helps people figure out.
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