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Money transfer company Xpress Money will soon offer instant direct account transfer services through the IMPS (Immediate Payment Service) platform.
Currently, the company offers Direct Account Credit service through which customers can transfer money directly into their bank accounts in India within 24-48 hours. But through the IMPs platform the time taken will be reduced to less than one day, said Sudhesh Giriyan, COO, Xpress Money.
Xpress Money is also looking at other channels of money transfer such as online services and kiosk based models. In the online service model, customers will be able to log onto the company’s website and transfer money through net banking, debit or credit cards.
India is the largest receiver of remittance and received $70 billion in 2014, according to a report by the World Bank.
“Of the total inward remittance that comes into India, $55 billion is through direct account transfer, while cash transfer accounts for $15 billion. There is a big white collared segment of non-resident Indians whom we want to target using direct account transfer. We have 50,000 locations for cash payouts and we are looking at new partners,’’ Giriyan said.
The company has presence in 150 countries and hopes to reach 200 by end of this year. Within India, the company is looking to expand in states like Punjab, Rajasthan, Bihar and Uttar Pradesh.
“Typically we see a surge in remittance when the rupee depreciates. Especially from the middle-east countries where banks give loans at 4%. So, people borrow money and put it fixed deposits in India where interest rates are around 9%. So, they get an arbitrage of 5%. We saw a surge in remittance in the third quarter last year and we have seen an increase in the last few days also,’’ Giriyan said.
The cost of remittance is among the lowest in India, at less than 5%. Other countries which have similar charges are Pakistan, Bangladesh, Philippines, etc. These countries traditionally see large inward remittance. Cost of remittance is high in Africa, where it is around 12%. In G8 countries the charge is about 7-9%. There are talks to bring down the fee to 3% in India, Giriyan added.
