Fintech startup PayNearby to start cross-border remittance services by October
Fintech startupwill start a facility for inward cross-border remittance by October, allowing beneficiaries to withdraw the amount as per their requirement rather than taking the whole amount in one go.
"The Reserve Bank of India (RBI) has granted us the approval under the second cohort for cross-border remittance. India gets about $80 billion as remittance every year, which either comes in cash or in bank account," Anand Kumar Bajaj, Founder, MD and CEO, PayNearby told PTI.
People from rural and urban areas can withdraw from various forex exchange providers at district headquarters or talukas. However, there are only 50,000-60,000 such forex providers.
"What we showed to the Reserve Bank is that instead of a one-time cash-in-cash-out mechanism, one can use the Rupee Drawing Arrangement (RDA), which can directly go to the bank account of the receiver, and the money can be remitted to the Aadhaar number (linked account)," Bajaj said.
PayNearby has created a dedicated IFSC code, which will act as the router to deposit the money to the Aadhaar-linked bank account of the receiver.
He said it took the company about six to seven months in the testing phase, and the refinement of the product is still in the process. PayNearby will launch this service in about a quarter or by October, Bajaj added.
"Users can go to BC (business correspondent) agents anywhere in their village or gram panchayat and give their thumb impression to match with the Aadhaar ID. And one can withdraw as little as 10%, 5%, or 2% of the remittance money unlike earlier where one had to withdraw the full amount in one go," he explained.
"It will benefit the users greatly as they can earn interest on the rest of the money by keeping it in their bank accounts," Bajaj said.
In September last year, the RBI allowed PayNearby to test the facility of routing inward cross-border remittance to the beneficiary's Aadhaar number as a virtual bank account using the existing RDA mechanism by its Second Cohort under Regulatory Sandbox for Cross Border Payments.
PayNearby completed the test phase earlier this month.
Besides, Bajaj said the company is also working towards launching financial products for the users living in rural and semi-urban areas.
"These services are for the mass 90% citizens who save money. People do want to save in a fixed deposit or a recurring deposit, you can make them invest in a property... We want them to invest that money," he said.
Bajaj said as much as Rs 1.5 trillion dispensed under Direct Benefit Transfer (DBT) has been lying unwithdrawn in beneficiaries' bank accounts, "curtailing consumption artificially".
Last month, PayNearby partnered with Protean eGov Technologies Ltd (formerly NSDL e-Governance Infrastructure Ltd) to offer PAN card-related services for its retail partners through Aadhaar and biometric or SMS-based OTP authentication for their customers.
Protean eGov Technologies is a universal, citizen-centric and population-scale e-governance solutions provider.
PayNearby offers branchless banking and other financial services to the mass segment of the country by enabling the local neighbourhood kiranas, commonly known as 'Digital Pradhans'.
PayNearby's 50 lakh plus micro entrepreneurs across over 19,000 pin codes assist more than 20 crore customers across the country.