World’s largest money-transfer company, Western Union’s doorstep payment service that were first introduced in India can now be used in different parts of the world, says Kerry Agiasotis, President & Global Managing Director- Western Union Business Solutions (WUBS) in an interview to Nupur Anand.
You have been in India for a year but you have been growing very cautiously. What are the reasons?
We announced our business plans last year but we started operations only early this year. We are looking at a client base of 1000 by next year and it is small but we are taking a measure approach and being cautious and then once we can get to a particular point then we can open the floodgates and scale it up.
There are close to 50 million Small and Medium Enterprises (SMEs) here so it will become a big marketplace. We are trying a different and an innovative business model in India and so we want to progress cautiously.
How is the business model in India different from the rest of the world?
We provide doorstep financial services to small and medium size enterprises (SME) which is a big community in India and we haven’t done this in any other market. We decided to come in this market with a slight twist and that was to be able to leverage the power of Western Union and use its pervasiveness.
In India, Western Union is everywhere; it is 20% of our global locations. So we decided to use the distribution and do something similar in the business remittance space as well. Banks have not been able to do this very successfully as this have not been commercially viable for them.
Therefore, we decided to take that opportunity and it has not been done before that a non-bank is taking up what is a banking service in international payments and foreign exchange.
Has the new business model worked for you?
Yes, it has. The whole model that we are building here is a proof that we can take our business to lot of other people as well. Western union is in every part of the world and the more that we can leverage the distribution faster the better it is for the growth of the business and we can then think of taking it to other places as well.
How is it that it this business is not commercially viable for banks but it is for you?
Being an organization that is very focused in the space of payments and remittances we have been able to create a model that makes sense in terms of operations, scalability. We have been able to leverage our strength as Western Union is present in every country of the world.
And the scale allows us to move money more cheaply and effectively than any other banking provider. So essentially, intellectual property about how to move money and technology has helped us by giving us the edge.
Banks have also been increasing their focus on the SME sector these days. So do you think competition has increased?
Definitely, it has. But with our efficiencies, our prices are lower and as a result customers are getting benefit form that and we are getting the payments to the beneficiaries faster.
As we move forward we will have to try and provide all the other services that we have been providing in 30 other countries in India as well. These will be value added services which will be an extension of payment services.