The clear blue hues of Corsica from the movie Tamasha or the roads and adventure of Barcelona from Zindagi Na Milegi Dobara may have gotten you thinking of your next trip out of the country. But hold your horses; it isn’t as simple as it looks, and unlike the cast and crew of these films, your planning isn’t done by a professional team. This is especially true when it comes to currency exchange and figuring out forex rates.
While everything from the prices of the next new phone on the market to the daily ups and downs of the stock market was easily available online, foreign exchange, according to 62-year-old Sudarshan Motwani, was still a black hole.
This is how BookMyForex was born two years ago. The idea was to provide a transparent, trustworthy and systematic platform to handle the consumer’s currency-related needs. It is a retail forex marketplace that is linked to live forex rate data feeds, akin to what is used in the stock market.
Started with seeding people from friends and family references, today, BookMyForex has a team of about 70 people, most of whom are in the age group of 22 to 28. “Today, the online retail forex marketplace has emerged as an industry, and we have an about 80 percent market share,” claims Sudarshan.
Their current business run rate is at Rs 600 crore, and the revenue run rate is at Rs 3.5 crore a year. The team recently raised series A funding of $2 million.
When they started BookMyForex, Sudarshan and his son Nitin Motwani felt that forex needed a leveler. Otherwise, it was a free-for-all, with banks and money changers charging five to six percent, and airports and hotels 10 to 15 percent.
Furthermore, different branches of the same exchange company, or even a bank, could offer different rates. As a result, travellers had to haggle, look at multiple places for the best rates and generally faced a negative experience while carrying out foreign exchange transactions.
Explaining this, Sudarshan says,
Our rates for all forex products other than cash currency notes are linked to live rates that are updated every three seconds. For cash currency, we have made arrangements with banks to allow three free overseas ATM withdrawals, allowing us to make cash currencies available at exact live inter-bank rates. Conceptually, we made it possible for customers to pay exact zero currency exchange costs and keep the entire amount for holidays and education fees, among other things.
Sudarshan was nurturing the idea of forex online for a while. He had experienced the hassles that one goes through to acquire forex in India, and the industry was completely disorganised. He says, “I had regulatory and technical challenges that I could overcome only when my son, who was working in Cisco Systems, San Jose looked at the project and offered solutions and meaningful insights. In fact, he even chose to join BookMyForex.”
The two main challenges he experienced were in getting customers to look at retail forex online and getting banks and exchange companies to believe that online retail forex was an idea with high traffic potential.
Sudarshan’s boss and promoter of Centurion Bank of Punjab agreed to angel fund the project and they opened a few of the bank branches to test try the concept.
BookMyForex deals with retail forex products, cash currencies, forex travel cards, wire transfers and international demand drafts. All transactions happen in compliance of RBI guidelines and are executed at Banks/Exchange companies’ counters.
These institutions then help BookMyForex to door deliver the required amount to the customers. Furthermore, the also has tie-ups with different banks to provide free withdrawals from international ATMs from BMF travel cards.
“Our arrangements allow us to offer exact zero charges on card issuance, reloading or currency encashments. We offer our services from over 650 cities and offer door-to-door delivery in over 183 cities with a COD limit of up to Rs 50,000,” says Sudarshan.
The platform has a fully automated customer connection mechanism that helps customers visit and place their orders on the site. Subsequently, they connect the request to the most suitable channel partner automatically and in real-time. Once that is done, every single order is tracked until it is executed to the customer’s satisfaction.
Today, there are several different players like fxkart, buyforex, tickmill and iforex in the space. Also, fintech seems to be the flavour of the season. In the first half of the year, $285.65 million was invested in different fintech startups.
The team claims to have a strong first mover advantage, and says that BookMyForex is extremely customer-centric. Sudarshan believes that this is one area where banks and exchange companies haven’t done well in terms of aspects like online order tracking and dedicated customer management cells.
“Other than that, we are very heavily invested in technology that tracks transactions at any time. We are also a very large setup, offering business volumes to our bank and exchange company partners, who in turn are able to offer much better settlement rates that are mostly passed on to customers,” he explains.
BookMyForex’s immediate plans are to rapidly increase their footprint in Tier II and III cities for their existing B2C products, alongside which, they are also creating tech solutions for B2B and corporate businesses using their online portals.