Wise Expansion Plan Targets India’s $32B Outbound Remittances
Fintech company, Wise Payments Limited has announced plans to sign up customers from India. According to Yahoo Finance, Wise India’s expansion will see the fintech company seek a bigger portion of India’s overseas remittances which now stands at $32 billion.
Wise stopped enrolling new clients for several months to overhaul its infrastructure after securing a Reserve Bank of India license. The license allows the Wise app users to send more money overseas.
Big Market
Wise India plans are focused on facilitating cross-border payments. The fintech firm says it will commence financial services in the coming months.
“India is a huge market for remittance. We will be primarily focusing on cross-border movement that’s currently almost entirely done by banks,” Wise Head of Expansion for Asia Pacific, Shrawan Saraogi, said.
In the Indian market, Wise will be taking on leading lenders like State Bank of India and ICICI Bank Limited which have dominated the outbound remittance market. Their dominance has been enabled by dated international payment rails, strict capital controls, and heavy taxes that reduce the impact of rival fintechs.
India’s external remittances for 12 months ending March 2024 stood at $32 billion, up from $27 billion the previous year. The remittances were mainly for educational, travel, and family expenses.
Not the First Time
This isn’t the first time that Wise has served Indian clients. The fintech company has been providing outbound payments in Asian countries since 2020 through a bank tie-up. However, the outbound remittances were previously capped at $5000 per transaction.
With the new Dealer 2 license, this will no longer be the case. Wise is revamping its back-end processes to comply with reporting and tax rules before it starts taking in first time customers under this license. India charges a 20% levy on external remittances.
Affordable Service
Wise overseas remittances will be more affordable than most of its Indian rivals. On average, the fintech charges a 65 basis points remittance fee globally. This is several times lower than that of Indian banks.
“We think we can be a pretty meaningful player in that market because we will launch a product that will be fast, that will be cheap, that will be transparent,” Saraogi said.
The Asia-Pacific market contributed a gift of Wise’s global revenue for the year ending March 2024. This was the second highest revenue for the fintech company after Europe, the UK excluded.
Fintech Rush
India’s digital payments market is expected to grow and hit the $7 billion market by 2030 up from $300 billion in 2018.
In 2022, digital transactions accounted for 46% of payments in the country. It is this opportunity that has attracted global fintech companies like Revolut and Wise to the Indian market.
In April, Revolut got a Prepaid Payment Instruments license from the Reserve Bank of India. The company already has 200,000 users on its waiting list, even though it is looking to unveil payment tools in the country soon.
Related Article: Revolut to Unveil Services in UK After Bagging Banking License
