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Saturday, May 19, 2012

Gulf News

Dubai The UAE could be one of two trial markets as the UK-headquartered payment services company Xpress Money makes a move into the individual to business (or business to individual as the case may be) transaction space. Its home market could be the other test market with the trials expected to start post-summer.

“There are very few payments facilitators who are already offering such a service capability and those who are got into it quite recently,” said Sudhesh Giriyan, who heads the regional operations at Xpress Money. “By getting in ourselves at the earliest we expect to narrow any advantage the others may have.

“As of now, we are trying to feel the market out by talking to institutional clients.”

Sources at local remittance houses reckon this is the way forward for the industry. Having institutional clients readily translates into substantial funds flowing through the remittance pipeline and that can only be a good thing for all industry players.

Xpress Money — which came into being in 1999 — only services individual to individual payments, with the UAE — where it has 350 locations operated by various exchange houses — and the GCC being one of its top transactional markets globally. Last year it entered the US and more recently Australia. The plans are to extend coverage to Latin America.

Widely rated

That is why the company wants to get into payment settlements involving individual to business and vice-versa. This category is widely rated within the industry as the next big thing.

Such services could be utilised to make an airline booking, whereby a customer can do the needful at a physical location where the Xpress Money service is available, or for a business to send salary contributions to outstation employees.

“We are formulating the systems and will also require having in place strict compliance practices,” said Giriyan. “Also, future corporate clients would need to be assured that we can provide optimum coverage through physical locations and that’s being addressed. We will also need to maintain bank accounts.

“It’s different to the typical compliance requirements for individual to individual and quite exhaustive.”

Not that remittance volumes involving individuals are showing any signs of slacking off. The estimated volumes last year through the GCC corridor were estimated at $76 billion (Dh278.9 billion). Saudi Arabia alone would account for more than $25 billion, enough to place it among the Top Three worldwide.

“But it’s still the US that is the biggest remittance market by far and the recession does not seem to have had any impact,” said Giriyan. “Last year it was estimated at $51.6 billion and it’s not difficult to see why — the whole of Latin America depends on individual remittances coming out of the US and so are many markets in Asia.

“China, India and Mexico remain the biggest recipients of remittance transactions, which goes to show that customer to customer volumes are not saturated. But customer to business opens up a whole new stream of opportunities.”

By Manoj Nair?Associate Editor

© Gulf News 2012. All rights reserved.