The Hindu Business Line : MoneyGram plans widening reach in Tier II, III cities

Mumbai, Oct. 12 Inward remittances company MoneyGram plans to expand its base in the Tier II and Tier III cities in a big way in the next few years. The company is setting up its flagship outlets Red Shops as a part of branding exercise.

“Our tie-up with Indian Oil Corporation Ltd is a step in this direction,” said Mr Harsh Lambah, Regional Director - South Asia, MoneyGram India Ltd. Indian Oil has presence in about 20,000 locations and the company plans to make use of IOC’s wide base in the rural and urban areas.

Remittance service

MoneyGram has tie-ups with Thomas Cook, IndusInd Bank, UAE Exchange, Catholic Syrian Bank, Indian Bank, IDBI Bank, The South Indian Bank and The Dhanalakshmi Bank, among others. The company has identified select branches of these companies and banks to conduct its remittance service.

“Only identified branches of the bank or agent company would offer the remittance service, as we would want to have a well established and updated infrastructure in place before rolling out the services in different locations,” said Mr Lambah.

MoneyGram is also looking at tying up with retail outlets in order to provide remittance service. It has tie-ups with retail giants like Wal Mart in the US. “We are talking to a couple of retail outlets in India but nothing is decided now,” he said. The company has In-Person bill payment and electronic payments services in the US. It also plans to roll out similar ventures in India after establishing itself well in the remittance business.

Market size

According to RBI’s report, the Indian remittance market totals about $24 billion and witnesses a compounded annual growth rate of 20 per cent. India’s current share is about 10 per cent of the $269-billion global remittance market.

Mr Lambah said that a huge part of the remittance market was still left untapped. “There has been a marked change in the pattern and nature of people travelling out of the country. Initially it was believed that the Gulf had maximum number of people from Kerala, but now it is changing with a lot of people from Punjab in these countries,” he said.

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