Launch a profitable US-to-India Remittance business
This article delves into the fundamentals of establishing a lucrative US-to-India remittance business, from the initial inquiry of "why" to the practicalities of "how."
The untapped potential of the US to India Remittance market
The US to India remittance corridor presents a lucrative and largely untapped market for fintech/startups looking to make a significant impact. With billions of dollars in remittance sent to India from the US each year and a rapidly growing Indian-American Population, the demand for the best, most reliable, efficient, and cost-effective remittance services has never been higher.
India receives billions of dollars in remittances each year, and the United States is one of the largest sources of remittances to India. The Indian diaspora in the US is one of the country's largest and most successful immigrant communities. From Satya Nadelle and Sundar Pichai in tech to Kamala Harris in politics, some of the most successful personalities have Indian roots. The Indian-American population is in the millions, only second to the largest- Mexican-American diaspora. They send money back home every day, and as a result, there is significant demand for remittance companies in India.
The rise of digital remittance platforms is revolutionizing the industry, offering more convenient and accessible alternatives to traditional methods of sending money, like sending cash through money transfer outlets or paying hefty fees via online channels. With the widespread adoption of smartphones and the internet, the demand for innovative remittance solutions is increasing exponentially. By entering this market, any fintech/startup will be well-positioned to capitalize on this growing trend and establish a successful business.
How to start a US-to-India money transfer business
If you're interested in starting a remittance business from the US to India, there are several things you should consider. Remittances are a significant source of income for many households in India, and there is a growing demand for fast, secure, and affordable remittance services.Consider the following steps to initiate a US-to-India remittance business:
Research the market
It's important to understand the demand for your services and the competition you'll be facing. Companies such as Remitly, Xoom, Transfast, and Ria Money Transfer provide remittance to India and other parts of the world. Similarly, some companies cater remittance services specifically to India, such as Remiguru and many other Indian banks. Look at the current remittance providers in India and their pricing, fees, and services. It will help you determine your pricing strategy and the services you want to provide. Remittance is a serious business; go over all the things to consider before starting your remittance business thoroughly before you jump in.
Obtain necessary licenses and permits
In India, money transfer and remittance services are regulated by the Reserve Bank of India (RBI). The RBI issues licenses to entities that wish to operate in the money transfer and remittance space. These licenses are valid for the entire country and not specific to any particular state.
In contrast, all 50 states in the US have their own money transfer licenses (MTL). Money Transmission laws can vary widely between states. Depending on state laws, you will need to obtain licenses and permits to operate a remittance business, depending on the state you operate in.
Machnet's infrastructure allows you to send from any 50 US states to India.
Choose a remittance API provider
To move money from the US to India, you'll need to partner with a remittance provider that has a presence in both countries. Some popular providers include Wise and Remitly. You may also work with a player who can provide Remittance-as-a-Service (RaaS). A RaaS provider offers banking, compliance, risk management, payment processing, and global payout.
RaaS providers use their own networks and partnerships with banks and financial institutions to enable fast and secure international money transfers. They help businesses and individuals simplify sending and receiving international payments while providing greater transparency and security compared to traditional money transfer methods.
Set up a website or mobile app
You'll need to set up a website or mobile app allowing users to create an account, fund the account for remittance, and send money to India. You can hire a web developer and start building your own website and app from scratch or also can partner with provide who can offer development work.
Machnet's RaaS API is structured so that you can create your own user interface for your web or mobile app. Or, you can choose Machnet's white-label solution, where clients can develop their application and website, including branding.
Market your business
Once your remittance business is set up, the fun begins: - marketing services and acquiring customers. Advertisement, finding the right networks, and referral services are strategies most remittance companies adopt. At the same time, you need to optimize your website to maintain a strong online and prioritize excellent customer service.
Go beyond Remittance
Remittance is just one of the many cross-border money transfer services you can build. Today users are looking for more than the humble P2P money transfer and to be competitive. Companies need to go beyond remittance, and figure out what these demands are. For example, you can enable users in the US to pay for internet, hospital, electricity, and telephone for family in the US. Or, build a cross-border wallet, and enable your users to pay, hold, spend, and withdraw funds in the wallet, creating a niche service that can offer a full range of solutions your customer needs
By seizing the opportunity to launch a money transfer startup focused on the US to India corridor, you can tap into a rapidly growing market with immense potential. With the right approach, strategic partnerships, and innovative solutions with the best user experience, your business can thrive in this competitive landscape.
Machnet's program is designed to cut through the complexity of setting up a money transfer business - from compliance and regulatory requirements to the technological infrastructure - so you can focus on launching and scaling your business. Get in touch with our team for more information.