India is a priority market for Western Union

Western Union, one the largest players in the multi-billion dollar remittance market, is upbeat about the growth of money transfer business in India. Western Union offers services through an extensive network in assistance with banks, post offices, and retailers. In this interview Anil Kapur, MD – South Asia, Western Union, talks about the company’s journey so far in India and challenges ahead.

NDTV: Tell us more about your growth story in remittance business in India?

Anil Kapur: There are over 200 million migrants around the world and the remittance market is estimated at nearly USD 369 billion. India in the past five years has become the largest receiver of remittances anywhere in the world beating China, Mexico and Philippines. Western Union entered India few years back seeing the growth in emerging markets like India and China.

NDTV: Why do you shifted your focus towards India?

Anil Kapur: At the start of the decade a lot of people from small parts of India were finding it difficult to get employment opportunities within cities, so they started to migrate to foreign countries and that is where you started to see the boom of Indian population in various countries. At that time the rupee was weak and people were more attracted to go abroad and send money to India, which made us to start looking at the Indian market. Western Union, one the largest players in the multi-billion dollar remittance market, is upbeat about the growth of money transfer business in India. Western Union offers services through an extensive network in assistance with banks, post offices, and retailers. In this interview Anil Kapur, MD – South Asia, Western Union, talks about the company’s journey so far in India and challenges ahead.

NDTV: Tell us more about your growth story in remittance business in India?

Anil Kapur: There are over 200 million migrants around the world and the remittance market is estimated at nearly USD 369 billion. India in the past five years has become the largest receiver of remittances anywhere in the world beating China, Mexico and Philippines. Western Union entered India few years back seeing the growth in emerging markets like India and China.

NDTV: Why do you shifted your focus towards India?

Anil Kapur: At the start of the decade a lot of people from small parts of India were finding it difficult to get employment opportunities within cities, so they started to migrate to foreign countries and that is where you started to see the boom of Indian population in various countries. At that time the rupee was weak and people were more attracted to go abroad and send money to India, which made us to start looking at the Indian market.

NDTV: It has been good 7-8 years for Western Union in India but the environment here is not only changing but also becoming more competitive?

Anil Kapur: Western Union has above 50,000 agent locations in India across 5,000 cities, towns and villages. It includes more than 8,500 post offices and more than 20,000 branches of leading banks. When we signed a contract with India Post many people said to me, Anil, it is a government institution and nobody goes to a post office. But in our case we made it an exciting offer because such a deal would provide India Post an opportunity to sell a host of other products to prospective customers.

NDTV: How much do you think India Post contribute to Western Union business?

Anil Kapur: They are the largest agents of Western Union but we also work with about 35 banks in India. And if I put all the 20,000 bank branches together, they do less amount of business than 8,500 branches of India Post.

NDTV: Looking at immense competition in money-transfer business, what sets you apart beside your service and philosophy?

Anil Kapur: We’ve got the world’s virtually fastest transaction service that is nearly 10 minutes, the world’s largest distribution network spread across 200 countries and territories, and I think we offer one of the most famous brands in this business. The combination of all these sets us apart.

NDTV: Are you looking to scale up your business? What are the challenges do you see to expand your business?

Anil Kapur: In a country of over 1.1 billion people, there are over 70,000 bank branches. Western Union already has 50,000 locations but our customers in remotest areas still have to travel long distances. So our first challenge is to expand our distribution network to much more than 50,000 locations. We want a Western Union location in every corner of India so that our receiver can come in and receive money through our service. The second challenge is to create brand awareness and product awareness because most of people think us to be a bank or an insurance company.

NDTV: Why is the company not tempted to get into an NBFC business model?

Anil Kapur: The core business for Western Union has always been money transfer. Just look at the sheer size of the USD 369 billion global remittance market and guess what after having been in this business for 130 years, Western Union has only 17 per cent market share worldwide. This I think is the biggest opportunity for us!

NDTV: Why is that you wouldn’t want to offer consumer finance seeing that you’ve managed to get rural network going and your widespread reach with banks?

Anil Kapur: We are exploring avenues beyond the money transfer business. One such option that we are looking within the money transfer space is that we have recently an agreement with Bharti for mobile money transfer. We are also looking at area of micro finance as an opportunity. Besides this, Western Union International Bank (WUIB) offers tailored services through multiple channels.

NDTV: To what extent will you to be able to ride on India’s retail growth?

Anil Kapur: One of our recent partner has been Anil Ambani group`s brokerage and financial services firm, Reliance Money and we see this as a big opportunity for us. The retail sector offers big opportunity for Western Union because of working hours constraint with India Post and banks.

NDTV: Two years down the line what is your target at Western Union?

Anil Kapur: Five years back we had less than 3,000 locations but today we have over 50,000 locations. I don’t want to put up a number. If you consider the fact that India Post has 155,000 post offices across India and we have only 9000 of them, I believe there is huge opportunity for Western Union in terms of growth. Last year we grew our transactions at over 70 per cent and we have that consistent growth for several years now. We see ourselves growing at similar kind of rates consistently and I think we have just started in India.