In a typical case of David challenging the Goliath, Instant Cash, a product of Wall Street Finance LLC, is fast eating into the business of Western Union Money Transfer's remittance business.
Wall Street Finance Ltd, a group company, is one of the top remittance agents of Western Union Money Transfers in India.
Asgar S Patel, group chairman, House of Patels, which owns the New York-based Wall Street Finance LLC and Mumbai-based Wall Street Finance Ltd besides six other group companies involved in remittance, foreign exchange, derivatives and courier services, said Instant Cash is doing good business and it is indeed giving competition to Western Union.
"Western Union has taken up the issue with us. May be, we can continue this way for another two years," he said.
Instant Cash, which has recently tied up with Syndicate Bank, employs 400 agents against Wall Street's 2,500. In percentage term, Instant Cash remittance business volume is about 30 per cent of Wall Street's business.
Patel admitted that Western Union may not be very happy with the new role of Wall Street Finance which is Western Union's one of the oldest agents in India.
"People are doing business with Instant Cash as it is cheap compared with Western Union," he said.
Instant Cash was launched in the United States in May after it got the clearance of New
York Banking Authority. This was the first licence given in the US for money remittance business post 9/11. About 40 per cent of the international remittances to India takes place from the US.
Patel said the remittance business has seen a sharp fall after 9/11. "We were expecting at least 600 remittances per day but that has not been happening. Strict 'know your customer' norms have hit the business hard," he said.
Globally, the volume of remittance business is about $150 billion per year and US accounts for 30 per cent of the total volume.
The US fight against money laundering has made the hawala market active as the illegal immigrants are not been able to use the official route to remit money any more.
