BUSINESS OVERVIEW
Migrants’ remittances, an age old phenomenon, have assumed great importance over the last decade. With increasing internal migration, they are considered to be an ‘important and stable source of external development finance’ for households in source regions, reducing transient poverty and at times even structural poverty.

The primary reason for migration is to earn livelihood and the means of earning the same could be any of the following: a. Farming based labor b. Skilled or semi skilled labor c. Manual labor of any other form

Also a migrant for the purpose of this case study is primarily someone from the rural setup and falls in SEC D1, D2 or E1, E2, E3 as per the new categorization.

The total internal migrant base as per 2011 stats has swelled to close to 1.14 crore. Total annual remittance per customer is at a staggering Rs 14,600 and the annual potential of the overall remittance market is at a staggering Rs 20000 crore. A gender cut of remittance is as below:

What are the ways thus for a person to transfer or remit, the conventional ways are,    Bank transfer Post office based transfers: Online transfer via FINO etc

Hawala and transfer by hand are unconventional means to transferring money.

Each of these means has its own set of advantages and inherent challenges/issues. Details as given:

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The most favored and prevalent mean is utilizing banks services to get these transfers done. But at the same time what we need to realize is that a majority of those transferring cash are unbanked or underbanked. (Unbanked: Without bank account, Under-banked: Has bank account in his/her hometown but has migrated to an urban town). The next big thing in the remittance industry seems to be mobile based remittance service where in the customer would be able to store virtual money on his mobile phone (M-wallet) and transfer using the same. This is largely being termed as Mobile commerce or M-commerce based remittance. The telecom companies would play a major role in this industry as they are directly in touch with the end customers. But the telecom companies cannot carry out lending, borrowing and m-commerce activities without being regulated by the Reserve Bank of India. This is because the Finance Ministry is apprehensive that mobile operators, after collecting the money from people for m-commerce, could start earning revenues on it by acting as money lenders and that too, without being regulated by the RBI. The success of all remittance based avenues (Banks and other financial services institution such as FINO etc) continues to lie in increasing the number of transactions, and as such, there have been efforts by these to try and reach the end customer by aggressively opening bank branches or money transfer micro branches. TELECOM COMPANY’S PERSPECTIVE Telecom companies have now stepped up and are slowly making inroads to enter the mobile commerce industry by issuing mobile wallets to their customers. One critical aspect and success pillar is taking over the mantle of money transfer from the banks and successfully deploying it in the mobile commerce space. Although the telecom companies have a huge distribution setup, the RBI regulations do not allow them to convert each and every existing outlet into a mobile wallet accepting retail merchant, and at the same time being a micro money manager. Also at the end customer end there are restrictions in terms of: a. Amount that can be transferred in a month b. Amount that can be sent in a single transaction c. Time taken to complete a transaction shall be more than a Third party transfer

The advantage over a bank are– 1. Ubiquity – In a given geography (city, state), retailers providing the m-commerce service shall far exceed the banks and other financial institutions. 2. Convenience – As opposed to a bank with limited hours of service m-commerce is an anytime transfer mechanism. BUSINESS CASE A leading telecom company has already forayed into a mobile based money transfer (remittance) based services, using which the customers would be able to store virtual cash on their mobile phones and spend at transfer the same. a. This can be done to either someone having a similar wallet b. Or to a bank Market studies reveal that the early adopters of the wallet service as such would be from the age group of 18 -30, and the most efficient channel to reach out to them is the internet and mobile. But at the same time the target audience for the money transfer instrument would be migrants or bread earners who have moved to a different state/location. The company intends to engage its prospects and customers in conversations, creating awareness about the product and driving usage. Keeping in mind the target group’s consumer behavior and the available tools for communication, you are expected to propose an on ground marketing and communication strategy: The following points have to be kept in mind 1. 2. 3. 4. 5. 6. Strategy to be rolled out on a national level Strategy has to be sustainable and not a one-time activity. Need for customer segmentation, if any Strategy should drive usage in terms of no. of transactions and value Roll-out strategy must also be included, with timelines given for each activity Strategy should focus equally on customer centric approach involving customer initiated transactions and trade assisted ones **** This case study is confidential and should not be shared in any form****