‘US-to-India are 38% of total remittances’

The summer heat in India has taken a toll on the global chief of remittance company MoneyGram International. “Kochi was better off than Mumbai. Here it is stifling,” says Pamela Patsley.

The chairman and chief executive officer of MoneyGram International was in India to hold the national conference of agents helping MoneyGram in its remittance business. In an interview to DNA, Patsely shared the firm’s growth plans for India and how Indian remittance transactions grew even when they shrank for other countries. World Bank estimates peg remittances to India at $52 billion in 2008, about 14% of the global market.

What have been the findings on the post-recessionary remittance scenario?
In 2009 over 2008, when the global market shrank, we still saw growth. In 2009, we grew 5-10% over the previous year and we continue to grow. For the US and Mexico, it was a bad year; Spain suffered greatly. From the global perspective in 2009, total transactions shrank by 15%, but India saw transactions rising from $52 billion in 2008 to $54 billion in 2009.

What are MoneyGram’s plans this year?
We are aggressively growing our points of presence in traditional markets. Middle East is also on our radar. We will also increase our presence in Russia and CIS (Commonwealth of Independent States) as the market there would continue to increase. Ukraine, Africa, Latin America, Dubai and Turkey are places where we would expand.

How has your network grown in India?
We had 22,000 agent locations in the country as of December 31, 2009. This number has almost doubled from what was a year ago in 2008. Also, we have grown handsomely in the first quarter of 2010 and the numbers would be out soon. We are very intent on growing further and have recognised the opportunity in India. We are keenly focusing on rural areas and are exploring creative ways and partnerships.

How big is the remittance business to India?
Total transactions from the US to India account for 38% of the remittance business globally and we are close to that figure in terms of US-India transactions of our total deals.

What is key to the Indian remittance business?
The most relevant point to a sender is that his family receives the money and  are treated well. People are transacting in a competitive scenario and a 10-minute service is of incredible value, as that can help them send money in a secure and reliable way across geographies.

How big a hindrance is the unorganised way of remitting money?
The good news is that many governments are putting in place measures to drive money towards organised transfers. They are ensuring compliance and have crackdown policies on unorganised money transfers.

For instance, in Pakistan the government reimburses the senders’ fee. This we refer to as a ‘free cents’ policy. Many governments are keenly intent on laying the right rules of compliance.

What about the RBI not allowing money transfers out of India?
There are sends to India (people abroad sending money to the country) of $54 billion. The sends out of India (money sent by people residing in India out of the country) can’t be that big. But in case the RBI allows that, then we have our network in place.

What has worked best in India so far for MoneyGram?
Agent network is our strongest asset. The UAE Exchange and Thomas Cook have also helped as faciltators for remittances. We have also signed a distribution agreement with Punjab National Bank, which is present across 4,600 locations. They were earlier in another partnership but now they are with us.

What are your other activities?
The online mode of sending money was not very customer-friendly. We have revamped our site 3-4 weeks ago for sending money from the US and consumers can do this from their home or office.