DOMESTIC MONEY REMITTANCES SERVICE

MARKETING

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Opportunities in Domestic Remittances

• Strong existing demand and volume: A research shows migrants send monthly amounts between Rs.1,000 to Rs.3,000

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up to Fortnightly

Monthly

Once in Two months

Quarterly

As Needed

Semi-Annually

Annually

NA

3%

45%

15%

14%

9%

7%

1%

7%

Frequency of remitting1

Upto 1000

1001-2000

2001-3000

3001-4000

4001-5000

5001-6000

6%

26%

26%

8%

9%

5%

Remittance Amount Sent

Source: MicroSave research on remittances in India (Punjab-Bihar/UP corridor): http://www.microsave.org/research_paper/understanding-remittance-networks-in-punjab-and-uttar-pradesh

Current Remittance Channel

• Increasingly, migrants use bank accounts to transfer money home.

• Increasing financial inclusion changing the face of informal channels. Tappawalas (in Orissa) and courier services use bank accounts to move money between places giving rise to bank couriers.

• However, high levels of dissatisfaction exists with current channels of usage including POs

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Current Remittance Channels

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71%

5%3%

8%

11%

1%

Remittance Channels Surat/Gandhidham

Bank

Bank Courier

Carried by self or others

Courier Services

Tappawalla

Post Office

53%

12%

6%5%

8%15%1%

Remittance Channel Ludhiana/Panipat Bank

Friend/ Relative - carry Money to Source

Carry Money Self

Post Office

Courier

Bank Courier

NA

Source: MicroSave research on remittances in India (Punjab-Bihar/UP and Gujarat/Bihar/Orissa corridor): http://www.microsave.org/research_paper/understanding-remittance-networks-in-punjab-and-uttar-pradeshhttp://www.microsave.org/research_paper/understanding-remittance-networks-in-gujarat-orissa-and-bihar

Remittance Channel Preferences

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Remittance Delivery Channel Value Proposition Weakness

Banks Instant Delivery , Safe, Cheap Time-consuming, Difficult for recipient, Far Away

Bank Courier Instant Delivery, Safe Not in own bank a/c

Hawala/ Tappawalla Doorstep Delivery, Convenient High Cost, Unsafe

Carried by friend/ self Trust, doorstep delivery Can take time, robbery

• However, this number hides the large hindrances remitters face in using banks including: • Long lines and lengthy processing

time• Difficulty of opening bank account• Inconvenience• Lack of doorstep delivery

• Not surprisingly, formal and informal have completely opposite strengths and weaknesses

Trust

Delivery Time

Processing Time

Cost

Proximity

Staff Behaviour

0

2

4

Remittance Channel Preferences

Formal Informal

Current Status of Domestic Remittance• Formal and informal channels of remittance co-

exist– Formal: bank, post office– Informal: courier/hawala, friend, self, and tappawala (for Orissa only)

• Good business opportunity– Close to 70% remitters send up to Rs.5,000 per month

• No single channel matches remitter/recipient requirements– Bank, the most trusted channel does not provide doorstep delivery, high

processing time– Courier, which delivers money at the doorstep, charges high fees and is not

safe– Post office, which delivers money at doorstep, delays delivery, expensive14/02/2014 1.1.6

Customer’s requirement

• Customers are not willing to wait in long bank queues

• They also appreciate more flexible hours and better service than bank branches currently offer.

• Customers willing to pay more than bank charges for better service

• Lesser procedures/documentation

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Can Post Offices bridge the Gap?

• Post Office’s key strength– Doorstep delivery, particularly important for recipients– Cheaper services example iMO, MMT etc– Customer need not have any account with PO– Easy access– Trust and safety

• But delay in delivery has to be reduced and experience and repeated transactions needed to build trust.

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•How Post Office can fill this gap & what is their role in it?

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Classroom Discussion

Welcoming steps• Post Offices wearing a new look due to

implementation of project arrow• Welcoming atmosphere in all the POs, thanks to

National Cleanliness Drive• Introduction of Mobile Money Transfer to suit the

customer requirements for faster remittances• Combined money remittance booking form for easy

documentation & delivery information in mobile for iMO & MMT, Mobile alerts track & trace for others

• Introduction of state of art technologies through India Post 2012 projects including Rural ICT

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What’s my Role? What should I do? How I can Help

• Gain in-depth knowledge of all the products and services

• Cultivate good behavioral skills & good customer service techniques

• Judge the requirement of the customer and suggest suitable remittance service

• Briefly explain the process of the service and required documents from both remitter and receiver

• Keep stock of required forms14/02/2014 1.1.11

• Assist the customers in documentation• Configure India Post web address in day’s

message in MPCM counter receipts• Enter the correct PIN Code & other details

including Mobile Number while booking • Enlighten customer about Track and Trace and

other requirement• Place all the booking form & other documents

before supervisor for immediate authorization14/02/2014 1.1.12

What’s my Role? What should I do? How I can Help

• If you are in a delivery office, process the transactions as early as possible

• Every day login into website and keep your credentials active

• Have a list of near-by offices offering different kinds of services and suggest it to customer in exigencies

• Take print out of all the eMOs received in your office, and arrange for same day delivery

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What’s my Role? What should I do? How I can Help

• Take returns in the Postman module with proper remarks and submit the account

• Update information into the central server by giving call through communication modules regularly

• If you are in RD counter, give information to Group Leaders about Money remittance service and ask them to share the same with others

• If you are in-charge of a office, make proper arrangement of funds for early pay-outs

• Look for better queue management

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What’s my Role? What should I do? How I can Help

INTERNATIONAL MONEY REMITTANCES SERVICE

MARKETING

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International Remittances Market

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India is the largest recipient of international remittances in the world.

UAE – India [25.09 %],US – India [21.82%], UK – India [7.45%] are

3 among the top 10 global remittance corridors.[ Source : Boyars-Intrinsic-Research-Report-Western-Union]

Opportunity

• Commercial banks have only a 5% share of the global remittance market, because it’s not considered to be part of traditional core banking business.

• In India though there is over 99000+ bank branch network, only 36,000+ inhabited areas have a bank branch out of the 600,000 inhabited areas in the country.

• The remittance services offered by the banks are not geared toward cash payouts to the recipient.

• Here Post Office is having an opportunity

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Remittance Service Providers

• The remittance market in India is serviced by– Post Offices– Commercial banks & Co-Operative banks– Non-bank Money Transfer Operators (MTOs)– Foreign Exchange Bureaus &– Wide variety of commercial entities [incl. Internet]

(acting as agents and subagents)

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Global Remittance Market

• Today, one in five dollars remitted globally passes either through– Western Union, which owns 16% of the market or– MoneyGram, with 4% market share

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Status of International Remittance

• Currently international remittance market for cash payouts in India is captured by – Western Union[WU] – MoneyGram[MG]

• India is the largest recipient of international remittances in the world (World Bank Report)

• In India both the Money Transfer Operators [WU & MG] are providing these services through its agents

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• In India [World Bank Report]– WU is leader in this Money Transfer Service Scheme– It has more than 50,000 agent locations in India– Operates in more than 7,000 cities and towns &– Works with more than 30 leading banks.

• India Post is among the single largest agents of WU. • Around 8,500 post offices offer WU services [World Bank

Report].• Western Union’s remittance through India Post

– In FY 2012-13, Rs 1482 crores to 592311 customers– In FY 2013-14, Rs 3473 crores to 1398763 customers

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Status of International Remittance

Low Cost of remittance by POs

• The cost of remittances by commercial banks is 12.53 %– Significantly higher than the global average at 8.36 %– with MTOs cost of remittances is 6.69 %– Where as with post offices it’s only 5.93 %

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What’s my role?

• Keep your login credentials active• Help & assist customers in documentation• Remember Code: 8 digits for MG, 9 digits for IFS, 10

digits for WUMT, 26 digits for France IFS• Keep a list of loyal customers• Keep Help-line numbers for emergencies• Keep a list of near-by Post Offices offering the same

services & inform the same to customers in case if you are not able to serve

• Process the transactions as early as possible• Arrange cash for early pay-outs14/02/2014 1.1.23

STRATEGY OF MONEY REMITTANCE MARKETING

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Strategy of Marketing Money Remittances

• Employees should have knowledge of Money remittance services offered by the Department

• Create Product awareness w.r.t. MMT, iMO among general public by Word of Mouth publicity by our staff members

• Network of Postman be used for collection of remittance by the senders

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• Extension of counter hours from 9am to 9 pm especially in case of IMTs where other agents are operating

• Expansion of services like iMO and MMTs in all Post Offices

• Monitoring of Money remittances for faster remittances

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Strategy of Marketing Money Remittances

• Use of combined MO remittance form in case of domestic remittance for easy documentation

• Target migrated population who send money for their family maintenance regularly and special arrangement can be made for collection & remittance of the amount

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Strategy of Marketing Money Remittances

• Post Office premises, Mail vans, Passbooks, MPCM receipts can be used for advertising our own product instead of promoting other’s product

• Use of Direct Post, mouth publicity through Postman Staff, PLI/RPLI melas, Philately exhibition etc

• Effective use of Social Media for promoting India Post’s products

• Better Infrastructure like seating arrangement, writing desk, Drinking water, Fan, Lighting for customers and cleanliness in POs

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Strategy of Marketing Money Remittances

• Use of MPKBY agents, SAS agents & others for promoting India Post’s products

• Advertisement in FM Radios, TV Channels, Local news paper, Cable TVs

• Standing Instruction facility for regular money remittances to ease the documentation & to save valuable customer time

• Better queue management and faster arrangement of money for payments

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Strategy of Marketing Money Remittances

Strategy of Marketing Money Remittances• Use Posters, banners, Hoardings & Open kiosks/information desks

in melas & jathras like during Dasara in mysore, kodogu- Bramhotsavam in Tirupathi (AP), During Onam festival in kerala , Kumbha melas, Durga pendals, Puri rathyathra, Republic Day parade in New Delhi etc

• Arrange for distribution of pamphlets and direct posts• Canvas for the products & services in schools, colleges,

apartments, State & Central government offices, PSUs, Training Centers, shopping complex, shopping Malls, banks, townships, bus stands, railway stations

• Target migrated populations who are sending amounts to their dependents like workers in big construction locations/projects, casual laborers in factories, small, medium and large scale establishments, manufacturing industries

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Continued

The strategy should contain• Prerequisites at the PO(HR, Infrastructure) • Identification of the market/customers• Promotion of the product • Analysis of the impact of the marketing effort

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Activity

The trainees to be divided in to 6 groups and to prepare marketing strategy for the following products• MO including eMO• iMO• MMTS• MO Videsh• WUIMT• Moneygram14/02/2014 1.1.32

Activity

• Make 10 groups of 3 trainees each and ask them prepare some – marketing posters– advertisements– role plays– slogans with catchy words– poems etc.

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