Thomas Cook ties up with Itzcash to tap remittances market2 min read . Updated: 21 Dec 2015, 05:40 PM IST
The travel and tours company is planning to use the 75,000-plus touch points Itzcash has across India to offer remittance services to customers
In a bid to capture the inward remittances market, travel and tours company Thomas Cook (India) has announced a partnership with Itzcash, a payments processor. Thomas Cook is hoping to use the 75,000-plus touch points Itzcash has across India to offer remittance services to customers.
“Thomas Cook is the principal agent of UAE Exchange and Moneygram, and ItzCash has signed up as a sub-agent to Thomas Cook. As a part of this association, ItzCash’s channel (ICW–Itz Cash World outlets) will be used for inward remittances and will act as customer touch point for the beneficiary," said Naveen Surya, managing director, Itzcash.
Using the partnership, Thomas Cook hopes to become the leading inward remittance distributor in the country. Given the increase in remittances to India and the advent of payment banks, receivers of remittance might see more such services in future as well.
India saw rapid growth in inward remittances (2.5% in 2015 compared with 0.6% in 2014), according to a World Bank report, titled Migration and Remittances-October 2015. “Remittances to developing countries are expected to rise by about 4% in 2016 and 2017," the report said.
A PricewaterhouseCoopers India report states that India’s unbanked population was at 23.3 crore in 2015, while the World Bank places India among the top destinations for inward remittances.
According to the IFMR Centre for Micro Finance, money transfer through informal channels costs 4.6%, while through banks it works out to about 3%. Currently, industry estimates suggest that foreign money transfers through the informal route form a good 70% of the total domestic remittances, most of it in rural areas.
With greater access to formal channels as agents like Itzcash expand their footprint, this number might shrink.
Itzcash plans to expand the remittance service to more locations. “In the next 12 months, Itzcash will make this service available across 5,000 locations, especially in the key remittance corridor," said Surya.
An increase in the number of payment banks is also expected to help. Payments banks in India “could help transform the rural remittances market", said the World Bank report.
The Reserve Bank of India has permitted payments banks to provide remittance services, including through mobile phones. It might be the reason why firms such as Itzcash, competitors to payments banks, are trying to cash in on services that they might not be allowed to offer directly.
Competition in the remittances market would help bring down costs and aid in increasing reach.