Visa Inc- a global payments technology company headquartered in San Francisco-California, last week announced it has received permission from the Reserve Bank of India (RBI) to offer inbound cross-border remittance to eligible Visa Debit and Visa Prepaid cards issued in India.
The RBI permission makes Visa the first and only electronic card payments technology company in India to support more than forty banks and to enable them to offer their cardholders the facility of receiving remittances on their Visa Debit and Prepaid cards. These include some of the leading private banks of India such as ICICI Bank, HDFC Bank and Axis Bank.
Uttam Nayak, Country Manager of Visa India said: “We are excited to receive RBI’s permission to enable Visa to introduce a simple, automated delivery service to consumers. The electronification of a service that is still dominated by cash will also help the government’s objectives of driving transparency, lower costs and financial inclusion in the money transfer market.”
India is the largest recipient of recorded international remittances as per the estimates of a World Bank Report. The World Bank has estimated that India received around US$ 49 billion in 2009, representing almost 3.5 percent of India’s GDP and exceeds the total FDI India received in the same period (US$36.6 billion).Most of the current options of remittances involve high costs and inconvenience to customers, who usually have to personally queue up at an agent, during working hours to collect their funds. Several banks have had success in building enhanced services based on direct, bilateral arrangements with partners in sending countries but are facing challenges when trying to extend these to new corridors where they may not have a local presence or remittance license.
The permission from RBI allows Visa’s client banks in India to promote Visa Money Transfer capability as a new channel to receive international remittances. The service uses Visa’s global payments network, VisaNet, to process the transaction and is based on the global standards of Visa network instead of multiple bilateral arrangements.
Visa facilitates the processing of transactions on behalf of financial institutions and merchants through VisaNet, one of the world’s largest and most advanced processing networks and is capable of handling more than 10,000 transactions per second. In 2009, Visa’s global network processed 62 billion transactions with a total volume of US$ 4.4 trillion.