Mumbai: Travel- and foreign-exchange-focused fintechs such as Niyo, Scapia, BookMyForex and Thomas Cook India are facing a double hit from the war in West Asia, and from the persistent weakness in the Indian rupee—both forex usage and remittances have fallen.
Most users are opting to carry higher cash amounts than to rely on cards and prepaid wallets, as they become more cautious about travel, even to regions outside the Gulf Cooperation Council. Also, they are increasingly opting to withdraw cash in part or in full from forex cards and wallets upon arrival at the destination, rather than continue holding balances.
The war has also disrupted business payment flows and cross-border settlements, as several local banking operations in the region have been affected, according to executives at banks and fintechs.
Travel fintech Niyo, which offers forex in cash and cards and other travel products, is seeing travellers rebalance usage as currency volatility and regional uncertainty rise, according to chief executive officer Amit Talwar. Discretionary travel to the GCC destinations has “virtually stopped” for now, with demand moving instead to the Far East and Southeast Asia.
The fintech’s product mix has also shifted as GCC travel has traditionally been more card-heavy, whereas the destinations now seeing demand support a more even split between cards and cash.
“Forex cash is picking up significantly, and travellers now prefer to carry two instruments instead of one, so they have a fallback if one stops working or becomes harder to access,” said Talwar. “Among customers already in affected (GCC) countries, ATM withdrawals have risen by about 10% or so, with users pulling out part of their balance and holding it as physical cash as a safeguard.”
Rival Scapia, which offers a co-branded credit card and travel-booking services, is seeing a decline in demand for visas, experiences and travel to Dubai and Abu Dhabi. However, founder and CEO Anil Goteti maintained that overall travel demand trends are holding steady with leisure travellers shifting from “GCC destinations to domestic routes and East and Southeast Asian markets”.
Currency uncertainty hits travel
Given the oil shock, sustained weakness in the domestic currency is driving up airfares and insurance costs.
“Rising crude prices have raised aviation turbine fuel (30–40% of airline costs), increasing airfares and reducing outbound travel,” said Manoranjan Sharma, chief economist at Infomeric Ratings. “Geopolitical risks have also led to flight rerouting, higher insurance, and cancellations, causing travel-related transactions to plunge in some regions.”
BookMyForex chief operating officer Gagan Malhotra said this includes delays in forex transfers to Indians abroad for university fees and other such payments. Users are now adjusting to the new currency levels and are trying to time transfers more actively, he said.
According to Deepesh Varma, chief business officer-foreign exchange at Thomas Cook India, currency uncertainty is changing traveller behaviour at the point of purchase, especially among leisure travellers and first-time, budget-conscious users. “Instead of buying their full requirement upfront, many are now splitting purchases into tranches, carrying a smaller amount before departure and then reloading during the trip as needed.”
Still, Scapia’s Goteti believes it is still too early to see that fully reflected in user behaviour. If the conflict drags on, oil prices stay elevated, and the rupee remains under pressure, the effect on affordability and spending patterns in international travel will become clearer, he said.
The domestic currency has fallen 4.5% since the war in West Asia began on 28 February, and 11% in FY26, hitting an all-time low of 95.1250 per dollar on 30 March. It pared some losses following measures by the Reserve Bank of India to limit banks’ currency positions, curb derivative trades and tighten offshore rupee market bets to reduce speculation. On Friday, the Indian currency closed 1.8% lower at 93.10.
Remittances dip
The hit for fintechs is not confined to travel and forex. Remittances are suffering too. While remittances to India tend to increase when the rupee weakens, this time the inflows have been slower.
“We did see a healthy increase in inflows last year when the rupee started to depreciate. But now there are concerns of job losses and businesses and restaurants being shut down, and that has started to reflect in remittances,” said a senior executive at a mid-sized private sector bank.
Banks and fintechs charge fees on international remittances, typically including a flat levy of around ₹500–1,000, a forex markup of 1.5–3.5%, and goods and services tax.
“If this continues, there will definitely be disruption. In fact, if there are job losses, we also anticipate more outflows and demand for emergency funds rather than inward remittances,” the banker said. “In the medium term, we definitely expect inflows to be impacted, which will be a pan India phenomena across the system.”
The GCC region accounts for around 38% of the $135 billion annual remittances into India, according to Sharma of Infomerics Ratings. “Conflict threatens migrant employment through layoffs and disruptions, potentially reducing inflows, weakening household consumption, widening the current account deficit, and straining macro stability.”
Mint reported earlier that the first impact of the West Asia conflict was visible among goods exporters, as delays in shipments of electronics, food products and other items created a backlog in payments that would be cleared only after consignments reached buyers in the GCC and other West Asia markets.
A finance manager at a large cross-border payments firm said some exporters are increasingly routing collections through overseas entities to manage treasury more flexibly. “Hong Kong, Dubai and Singapore have been chosen by companies because they are relatively easy places to set up. Instead of routing all payments to India, they aggregate funds there, use the forex locally where needed and remit the balance later,” the manager said, speaking on the condition of anonymity.
Kunal Jhunjhunwala, founder of Airpay Payment Services, acknowledged that the strain is now spilling over into payment operations.
“The settlement process for particular GCC corridors now takes between 24 and 48 hours longer than before,” he said, adding that rejection rates in some currency pairs had risen slightly. Indian exporters of IT services, logistics support and construction-linked goods to Saudi Arabia, the UAE and Oman are among the most exposed, he said, as even small delays can worsen cash-flow stress.