Launching next week, Mumbai-based remittance-enabling startup InstaReM aims to make money transfer cheaper, quick and hassle-free.
InstaReM, which stands for instant remittance, has designed and developed a low-cost money remittance model to support 200 million plus immigrants and millions of small and medium sized businesses, shared the company in an exclusive chat with e27.
“We are an online account to account cross border money transfer service that enables customers to send money directly to a bank account of their choice in the receiving country,” explained Prajit Nanu, Founder and CEO, InstaReM.
The peer-to-peer money transfer market globally is US$550 billion and is growing at six per cent per annum year-on-year.
How is the startup any different than existing players such as Western Union, Moneygram, Paypal? According to InstaReM, its core USP is the price-point it offers.
It charges a flat fee of 0.5 per cent of the sending amount. For e.g. If you are sending US$1,000, it will charge you US$5, shared Nanu.
“We charge 0.5 per cent of the sending amount, while competitors charge anywhere between two to four per cent,” he added.
Next come convenience and transparency. One of the biggest challenges that consumers face is that transfer services build in a significant FX spread to hedge their risk, whereas InstaReM claims to offer spot FX. This ensures that the fee is significantly lower and there is transparency in the exact amount that will reach your family.
Another plus, according to Nanu, is that the startup ensures money transfers to successfully take place in 24 hours to 48 hours. Considering that a lot of India is unbanked and this service works only when a bank account is in place, how will InstaReM work?
“We have partnered with banks across the country to speed creation of a bank account in such cases. We will ensure a new account is created in 72 hours,” shared Nanu.
The InstaReM story began with a very personal experience. Nanu faced a number of challenges in sending money across international borders, like opaque FX rates and extended timelines for delivery. This prompted him and Michael Bermingham, a close aide, to collaborate with a shared vision of making money transfer easier.
The service will first start to enable money transfer from Australia to India. Australia sends about US$4 billon every year, of which about US$2 billion comes to India.
The first quarter will see services expand to Singapore, Hong Kong, Malaysia, the UK and Canada. Focus will be largely to support startups to receive customer payments at the lowest possible costs. The startup’s target audience includes anyone sending money to Asian countries for personal or business.
InstaReM is privately funded and will start looking for institutional funding from March – April 2015 to assist with expansion.
The company is optimistic and is looking for 130 to 150 transactions per day on its platform by end of 2015. Here’s wishing it good luck.