Western Union, the global leader in money transfer services, is expanding its presence in India through local banking and agent network for capturing a sizeable chunk of business from the growing Indian Diaspora.
With a greater number of Indian IT professionals, doctors and students making a beeline to the western and Gulf countries in pursuit of career advancement, remittances to India has been rapidly growing over the last couple of years.
Though the US-based global financial services' company made a modest entry into India for handling inbound dollar remittances in the retail segment during the mid-nineties, it is only since 2000 that it has been investing substantially in its Indian operations to increase the volume of remittances from the 20-million strong Indian Diaspora, which is estimated to generate $160 billion in income annually.
"We are targeting the Generation-X of the Indian Diaspora, which has been steadily increasing due to the migration of young IT engineers, doctors, students to the US and Europe for employment or higher studies," Western Union's South Asia regional director Anil Kapur told rediff.com in Bangalore on Tuesday.
Recent reports from the Natural Immigration Services also indicate that Indian students constitute the largest number of foreign citizens across the US with around 66,000 on the academia rolls.
With the latest wave of migration taking place mainly from Karnataka, Andhra Pradesh, and Tamil Nadu, besides Maharashtra, thanks to the phenomenal growth of IT, biotech, and financial services' sector, Western Union is targeting the southern and western regions for expanding its business.
"Even hundreds of Indians in the oil-rich Gulf region have been stepping up their remittances to their parents or relatives back home. According to the latest RBI figures, around $15 billion gets remitted every year, and the amount has been growing at 5-10 per cent rate annually," Kapur claimed.
As against time-consuming inter and intra-bank transactions within the country as well as from their overseas counterparts, Western Union guarantees to transfer inward remittances from anywhere in the world in a matter of minutes (read 15-20).
Having tied up with as many as 18 banking and financial agents, the latest being the Bangalore-based ING Vysya Bank Ltd, Western Union is scouting for similar partners for expanding its geographical presence in the rest of the country.
"We are in talks with several scheduled and private banks for maintaining the phenomenal growth rate of 80 per cent achieved in the calendar years of 2001 and 2002.
"Though our market share of the total volume of money transfer is still hovering in the single digit, we are targeting to achieve a double-digit growth by 2005," Kapur asserted but declined to reveal the numbers in support of his claims on account of confidentiality.
Western Union is a subsidiary of First Data Corporation, a Fortune 500 company, with worldwide operations.
The company is also planning to introduce transfer of funds using the Internet from the second quarter of 2003 to minimise the cost and time taken to remit them for a transaction fee ranging between 0.4-4 per cent.
Under the latest RBI guidelines issued in July 2002, a remittance of $2500 can be transferred per transaction. The receiver in India is entitled for only 12 transactions in a calendar year.
Commenting on the alliance, ING Vysya Bank managing director and CEO Bart Helleman said the Western Union services would enable money transfer to happen in minutes, unlike hours or days in the past.
"With lots of NRI having local accounts in India, the service will be rewarding as remittances can be made to any of our branches across the country," Helleman stated.
As a business model internationally, Western Union operates through its agent network in India, approved by the Reserve Bank of India. Currently, it has a 10,000-strong network across the country.
Among the agents are AFL Ltd, Andhra Bank, Bank of Punjab, India Post, Kuoni Travels, Maharashtra Apex Corporation Ltd, Sita Travels, Transcorp International, Wall Street Finance Ltd, and Weizman Ltd.