Interview of the Month

Avijit Nanda, COO, TimesofMoney Ltd

As Chief Operating Officer, Avijit Nanda heads the operations of Timesof- Money Ltd. Avijit has gathered a rich experience of 13 years in the banking industry with specialised skills in Relationship & Product Management and strong exposure to Sales and Distribution, Channel management, Marketing, and Strategic Alliances. His earlier stint includes strategic roles with market leaders like ICICI Bank and HSBC. Avijit is a born leader and an extremely ambitious, passionate and industrious individual with a desire to achieve and stay at the top.

At TimesofMoney, Avijit has played a key role in driving business development and alliances with banks and institutions to launch the Remittance platforms across the globe.

Avijit has a strong consumer orientation and excellent networking, negotiations and project management skills. He is a well-known authority on the subject of crossborder global remittances, ePayments Service and mCommerce.

Avijit has an impressive international exposure and has done in-depth study in the payments industry and expatriate markets. Avijit is currently focusing his efforts on taking TimesofMoney to the next level of success and recognition by making it a super brand in money transfer business.

About the Company

TimesofMoney (TOM) is a leading online payment service provider in India. It is part of the Times Group, India's leading media and entertainment conglomerate. TOM provides a number of services including India money transfers, global money transfers, NRI services, e-payments and co-branded cards.

The company caters to individual consumers, major banks and financial institutions located within India and across the globe with two categories of products, namely personal solutions and business solutions. Various business-to-business services offered by the company include white-labeled remittance service, disbursement solutions, payment solutions and iExchange. The company has formed strategic alliances with a number of banks in India such as Axis Bank, Bank of Baroda, Citibank, Deutsche Bank and HDFC Bank.

Q. What are the services provided by the Company and which are your target markets?

TimesofMoney has emerged as a leading player in online money transfer industry in India. The bouquet of services includes online money transfer, ‘hosted on demand’ services, NRI (non-resident Indian) services and payment services.

Online money transfer enables expatriate communities across the globe to send money home under the brands Remit2India and Remit2Home. The whitelabeled “hosted on demand” services is offered for our strategic alliance partners such as money transfer organisations and banks. NRI services are offered through our Brand Window2India, which is a comprehensive NRI portal pinned on 4 C’s of commerce, content, community and connect. Payment services involve credit card, e-wallet and payment gateway targeted at serving retail customers and emerging enterprises.

While we initially targeted the NRI pockets, we are expanding to other emerging markets. Currently, we are focusing on increasing our presence in Europe. However, the major part of the remittances still comes through the US-India corridor. And about 80% of the revenue is generated through the brand ‘Remit2India’.

Q. Tell us in brief about your journey so far.

The company was started with people from various banks coming together, for a product that was probably futuristic at that point in time. But there was a clear cut direction that the market was moving towards an offering that provided convenience, security and value for money. All this happened about seven years back.

Our product design was absolutely internal. We had technology that was internal or in-house; we had bankers who got together from cash management and NRI investment banking and got in writing the specifications from a scratch. The architecture of the engine was designed in such a way it could accommodate a definition module of what is send currency and what is a receive currency. So if you define send currency as dollar and receive currency as Indian rupee, the US to India corridor is started. That’s how it started off.

We started off with four countries into India, and grew up to about 35 countries over the next three years. At this point of time, for the ‘into India’ channel, we are using our brand ‘Remit2India’ which is available in about 32 countries. Last year, we had strategic alliance with a bank to provide Cash Management Services (CMS) across the globe. We launched ‘Remit2Home’, a global money transfer brand, which is actually a channel for money transfer from any country to any country. At present, there are 15 countries at the receipt side and 37 countries linked at the send side. We want to grow the number from 15 countries to 80 countries by end of fiscal year 2008 (March 2009).

TimesofMoney started off with 50 transactions a day, and now we have an average of approximately 5,000 transactions per day, which we are targeting to increase to 6,000 to 7,000 transactions a day.

The company started off with traditional products like Wire & Check, and then we innovated and went into Direct Debit. We offered Direct Debit product which is an ECH product in the US, UK, Singapore and Australia (sponsored through a various domestic clearance systems). Now, we are moving towards a model where one can send money not necessarily from an internet platform, but through telephone dialing. Further, we are looking for transfer of money through mobile handset.

Q. Do you expect the money transfer/remittances market growth to outperform financial services/banks in the short to medium term? Whom do you consider your main competitors, existing and potential?

According to World Bank estimates, remittances are growing at a CAGR of 10-11%. The online space is expanding much faster at close to 80% thereby indicating a movement of customers from conventional methods to new age-channels such as online remittances. The online remittance industry is certainly going to outstrip financial services in the short to medium term.

In the independent online remittance marketplace in India, TimesofMoney currently enjoys a 60% market share with the rest being divided amongst several players such as Xoom.com. This of course excludes the remittance services provided by large retail banks in India and offline remittances (cash transfer) provided by money transfer companies.

With domestic markets offering better option for investment and remittance needs moving from pure “family maintenance needs” to “investment needs”, the new age channels such as online and mobile are definitely coming across as a strong contender against offline and the remittance services provided by banks.

Currently, remittances to India are estimated at $28 billion per annum. While a majority of these transfers are carried out using traditional options like physical check via mail (with inordinate delay in clearing), wire transfers (expensive, difficult to track) and through exchange houses (an inconvenient option, involves cash), more and more customers worldwide are turning to online remittances as a preferred alternative.

Given this trend, our potential competitors could be the telecom players entering the marketplace, with mobile remittances and financial services companies launching their branded remittance solutions.

Q. How does the company expect the global money transfer industry to grow and evolve over the next five years? What is the current pricing environment and what are the trends in the regional market?

One positive trend in this industry is that except for Mexico, remittances sent back home is driven by reasons that are beyond family maintenance. Also, in most of the countries, repatriation regulation has become much liberalised. In India, it’s USD200,000 that one can take back to his/her country. Similarly in the US, China and Philippines, the repatriation regulations have become less restrictive; it is now easy to take back money home when needed. India is slowly but surely moving towards Capital Account Convertibility (CAC). Monetary policies are not restricting the capital to flow out and similarly in other countries as well. Therefore people don’t mind sending money, so as to create an investment opportunity, realise the return on investment and take back the money when required. Such a trend is good omen for this industry, going forward.

When it comes to pricing, there is great disparity between offline and online channels. Cost of transfer depends on the amount being sent and the currency pair of remittance. Cost of transfer is mainly categorised as fee, exchange margins and service charges. Offline channels are usually 3-4 times more expensive than online channels in terms of margins. Online channels, more often than not, also waive off transfer fees.

In a market that is becoming increasingly price and service driven, margins and fees have seen a constant downward movement over the last five years.

Q. What rate of growth has the company experienced in this business over the past few years? What strategies is the company adopting for growth and increasing its market share?

The business has witnessed a CAGR of over 90% for the last three years. We have moved from offering just money transfers to offering comprehensive NRI services though our Brand Window2India. The need of money transfers has also moved beyond family maintenance. New areas which are a big ticket item for the money transfer are investment, property, healthcare and travel.

TimesofMoney is also increasing its efforts to acquire strategic alliance partners in the banking, financial services and related industries to help them launch their branded remittance services. The company through this effort intends to establish itself as a preferred service provider of technology, operations and customer support to such players.

We have witnessed a remarkable 200% growth in the last few years. We have moved from being a pure online money transfer portal to a complete NRI services provider. With Window2India we now offer a complete product basket to the NRI population making it a one stop shop for the NRIs.The relevance of this expansion is more evident as the customers today are moving from conventional channels to new age access channels like internet, phone and mobile. This surround strategy ensures that our customers “put all eggs in one basket” and we enjoy the maximum share of wallet.

Q. What is your take on the growth in the Asian region?

Asians being the largest overseas working population comprising mainly of Chinese, Filipino and sub-continent expatriates from India, Pakistan and Bangladesh, will continue to dominate the global remittance marketplace as the topmost destination for cross-border payments and the remarkable advances in technology would lead to convergence on the internet and mobile media.

Q. How soon do you expect global card/ electronic solutions to replace conventional money transfers (cash transfers)?

The adoption of electronic payment methods over conventional transfers is already and evidently underway. Leading banks in India have over the last three years launched their own online remittance services powered by TimesofMoney, because they did not want to lose customers to competition that offers such services. With the banks’ own customers switching from wire transfers and check transfers to online payments, this movement will only gather momentum over time.

Q. Which, in your view, are the areas that require more attention from the authorities – central banks and governments – to make transfer and delivery of remittances across borders more efficient and secure?

What the market requires is a regulated yet liberal environment for e-payments and central bank support on new age products such as eWallets, Mobile Transfers, and efficiency in the last mile settlement piece.

Q. With regard to the increasing concerns over personal data security and consumer rights issues, how is the industry coping with such challenges? What measures does the Company take to ensure protection of personal data and consumer rights?

Conventional services such as those offered by banks and companies offline are gearing up to be more accountable, transparent and cost effective. Online players like us are equipping the customer interface as well as the back-end ops shop with state-ofthe- art technology solutions.

TimesofMoney has stringent 128-bit encryption of customer data, secure transmission pipes between cash management partners, militarised data zones, firewalls etc. Moreover, data is protected through hot and cold backups in remote locations for business continuity purposes. The company has clearly defined policies regarding information security. Consumer rights can be addressed through forums of escalation to the President of the company.

We have inbuilt risk management programs which monitor volume & velocity and have effective risk management and mitigation processes in place. Besides this, our Customer Identification Programs have been very effective and reinforce the fact that these areas are of prime importance to us to sustain the credibility and customer trust that we have earned over the years. We also follow global standards and mandates of bodies like FFIEC and have multi layered customer authentication points in our platform.

Q. What measures can be adopted by the industry to mitigate the impact of the current adverse developments in the global economy, eg global economic slowdown, rising cost of living and currency movements?

Amidst the global economic slowdown the positive view is that of continuous and substantial cross border migration of highly skilled workforce. With expatriate populations growing in all the major economies of the world, cross border payments are bound to increase over the next decade.