Western Union sees no threat from upstart

The global money transfer services provider, Western Union company, claims to be in a comfortable position in India and does not see any major competition from its peer firm, MoneyGram.

Western Union, which has 40,400 agents across India in over 4,000 towns, cities and villages, is now focussing more on developing its brand at the grassroots through promotional and awareness programmes.

When asked if the company has any major challenges with the entry of MoneyGram into the Indian market, Suvodeep Das, marketing director of South Asia, Western Union, said, "It will take a while for it to become a threat to us."

However, he maintained that its peers had not posed a challenge to it up until now. He further said, "Our strength lies in our competitive pricing."

He said the company is presently focussing on consolidating its position in India through brand-building at the grassroots, investing in network expansion throughout the length and breath of the country, and through competitive pricing of its services.

According to Das, the country received the largest inflow of foreign exchange through remittances, amounting to $26.8 billion last year.

This is way ahead of the foreign exchange inflow through foreign direct investment (FDI) and software exports (IT industry) that stood at $11.2 billion and $23 billion respectively last year.

The largest Indian diaspora are based in the US and West Asia with a population of 3 million and 3.6 million respectively. There are over 20 million Indians living abroad. However, in India, the company registered a growth of 95 per cent in the last six quarters and it expects a similar growth to be maintained in future.

On the competition faced by the company, he said the company is facing major competition from the banks presently.

However, he said his organisation had conducted a practical study where some of the executive remitted small sums of money abroad through Indian banks. It revealed that it takes at least two days to reach the desire destination. Thereby, its organisation stand much more competitive when it comes to speedy service.

Western Union claims to have a 17.4 per cent market share globally of the total remittance market that stood at $269 billion, while as per an estimate MoneyGram might have a 4 per cent market globally. As per Das, World Bank estimated that by 2010, the global remittance market will stand at $289 billion.

However, Das could not give the marketshare of its company in India, as the company does not discloses country-wise data. But mentioned that in India three states - Punjab, Kerala and Gujarat- are the major receiver of remittance from overseas.