Plan a foreign trip and foreign exchange is one of the final necessities one runs for. Often, in the last-hour hurry, the customer ends up paying much more than what he/she should actually have to.
Forex players in the country are slowly but steadily changing the scene, using the possibilities of online retailing.
Apart from the traditional service providers like Thomas Cook and UAE Xchange, which also offer online forex services for travelling, start-ups like BuyForexOnline and bookmyforex are gearing up to tap the niche segment. Bengaluru-based buyforexonline, for example, claims it has been doing 1,000 transactions in a month, growing at 40-50 per cent every month.
Thomas Cook India, which does over 1,000 online forex transactions a month, is also seeing huge growth in its online business. “We have seen a dramatic growth in our online forex sales, with a very high repeat rate,” said Abraham Alapatt, head of marketing & customer service.
The online entities are trying to differentiate themselves from traditional retailers by providing round the clock services, unlike banks where services are restricted to working hours and market days.
Though forex is a $2-billion (Rs 12,000 crore) market in India, unlike the online consumer segment, online retailing in this space is still largely unexplored. Since forex is a largely regulated space, the online retailers are trying to conform with Reserve Bank of India (RBI) guidelines by getting a licence to operate forex services from authorised dealer such as Centrum.
The customer can apply for forex online and upload relevant details like passport, visa, ticket, etc. After validating the documents, the retailer delivers the forex at the customer’s preferred location.
“The KYC (know your customer) verifications as required by RBI norms are done with each customer in a very strict manner. During the first level of verification, the customer has to upload his/her passport, ticket, visa and attested copies. Before the forex is delivered, the originals of the uploaded documents are verified personally by the employees of buyforexonline, only after which the forex is released,” said Ananth Reddy, founder and managing director.
Online retailers claim they provide better rates than traditional competitors. For instance, most banks charge four to six per cent but the new players’ charges are close to 0.5 per cent.
In the case of BuyForexOnline, it also fixes and holds the forex rate after the customer uploads the relevant documents online. This rescues the customer from paying high rates in the ever-fluctuating sector. “We follow the rate set by online aggregator XE.com. The rate is set, fixed and held based on the base rates provided by XE.com, the currency converter portal,” added Reddy. While buyforexonline normally takes two days to get the forex delivered to the customer, in urgent cases it also supports immediate delivery.
Reddy has worked in the segment for more than 20 years with the likes of Thomas Cook, VKC Credit and Forex Services. Though buyforexonline was launched in 2013, it was relaunched in 2014 with improvised portfolio and services. One of the major changes the company brought in was by collaborating with MakeMyTrip in its second edition. As a result, customers who go to the online travel portal can now book tickets, hotels, get travel insurance and even book forex online.
The focus of online forex retail companies is usually the basic travel quota segment, including retail customers and students. Currently, there are at least 10 million people travelling abroad from India in a year and this poised to go up to 50 million by 2020.