Cross Border Payments: Why you need a Strong India Strategy


India’s importance is probably not new to you. For years, we have all sat in meetings, read articles or attended conferences that highlighted the importance of India. Anytime you have an emerging economy that is comprised of over 1.2 billion people, you are going to get people’s attention. Per a UN Report on migration trends, India has the largest diaspora population in the world at over 16 million living worldwide. Any competent executive involved in a global business will be focused on India.

For Global Payments professionals, having a comprehensive India strategy is a requirement in today’s business environment.

Remittance Providers

Whether you’re a retail agent giant like Western Union or an up and coming online star like TransferWise, you need to capture market share in the India. With over 16 million Indians living and working around the world, India has become the largest money transfer corridor in the world. According to the Migration and Remittance Factbook 2016, India receives more in remittances than 4 countries in the top 10 combined and almost $10 billion more than the number 2 country, China. Over $72.2 billion was sent to support families in India and impact the local economy. These numbers are for officially recorded remittances. The true size of remittances, including unrecorded flows through formal and informal channels, is believed to be larger. If you don’t have Diwali on your marketing calendar, then stop reading and do that now.

Mobile Payments

Everyone thinks mobile is the future for payments. India is leading the way for mobile in general and mobile payments specifically. The mobile payment transaction volume is trending for compounded growth rate of over 90% and reach INR 153 billion by FY22 in India, a recent study shows. Mobile payment transaction value in India is projected to grow at a 150% CAGR according to a study titled “Indian M-wallet market”, jointly conducted by ASSOCHAM and research company RNCOS.

India has one billion mobile subscribers, an incredible user base that can transition easily to payments and business transactions on mobile. In 2016 the Mobile banking segment grew to over 386 million transactions. That has increased by 49% year over year in 2016.

Gig Payments

Whether it is paying for a logo on Fiverr, invoicing for app monetization on Admob or sending Google AdSense commissions, companies need an effective cross border payments platform. There are millions of Indian contract workers that provide services around the world. Getting funds to them quickly, inexpensively and in a form factor they desire is required to keep this global workforce connected. One of the top gig marketplaces, Freelancer.com, says India is poised to be a dominant player. "India is the top country in the world and in Asia where our users have been growing progressively. We believe the country has potential to become the top freelancing and crowdsourcing hub in the Asia region, even globally," Freelancer.com Country Manager for Indonesia, Malaysia, India, Pakistan and Bangladesh Helma Kusuma recently told the India Times.

Accenture believes a “gig” or on demand workforce strategy can become a competitive advantage for companies. And the companies that can pay their on-demand workers quickly and conveniently will have a competitive advantage.

Demonetization Uncertainty

When the Indian central governments began its demonetization policy, many heralded the “End of Cash”. The immediate result was a run on ATMs across the country and some initial panic. Luckily the initial unrest has settled down and digital transactions are taking hold in the larger cities. In the more rural areas, the adoption is slowed by infrastructure and customer preference. Cash is king in India and businesses report that some of their wholesalers won’t take a digital payment or that they prefer cash/check. Payment companies that want to expand into India will confront financial illiteracy and limited awareness among their customers. And anyone entering the market face an evolving legal environment in the treatment of customer privacy.

India is a land of opportunity for payments companies. The government and a significant portion of the population are embracing innovation. Granted there is still limited financial inclusion and many people are unaware or fear new payment options. But that can be said about almost every country around the globe to some extent. As one of the world’s most important developing economies, India’s potential for significant advances in financial inclusion far out way the short-term obstacles. Are you ready to be part of the future?

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