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Earthport, a cross-border payments services provider to banks, is seeking permission from Reserve Bank of India to start operations in the country.
Currently, only banks are authorised to do bank-to-bank outward remittances. Players such as Western Union, who also do outward remittances, do it in association with banks.
“For a cross-border outward remittance you need an AD1 licence, which RBI has so far issued only to banks and to no other players. However, it is not that the regulation limits it only to banks. It is probably that no other player has applied to the RBI or hasn’t made a business proposal like us,” said Sajeev Viswanathan, Executive Director and President-Global Strategy, Earthport.
The company believes that it can help banks cut down costs and make the remittance process more transparent by having a fixed fee structure.
Globally, Earthport has clients such as HSBC, Standard Chartered, American Express, Bank of America Merrill Lynch.
“We want to expand to India and other Asian markets because as per a survey, the cross-border payment transaction revenue from the Asia-Pacific region is estimated to grow at a very rapid pace second only to the MENA (Middle East and North Africa region,” said Hank Uberoi, Chief Executive Officer, Earthport.
The survey by Boston Consulting Group also suggests that the cross-border remittance market in Asia-Pacific market is supposed to grow by 14% between 2010-2020, higher than other European and American markets.
Uberoi added that they have made presentations to RBI and Indian Banks’ Association regarding the business model and are awaiting feedback.
