BookMyForex is an online marketplace for retail foreign exchange and private remittances facilitating easy access to better forex rates for customers
Getting your local currency converted for your overseas trips without burning a hole in the pocket is a hassle in India. There are thousands of forex services across the country, but they charge you exorbitant rates under the guise of commissions and taxes, and this amount varies from trader to trader. There is no standardisation. This often force travellers to approach black-market dealers and unlicensed forex traders, which poses huge risks.
“The currency exchange market is highly-fragmented and disorganised with thousands of mom-and-pop stores offering this service. Some of these are not even legally authorised to exchange currency and often partake in unscrupulous activities such as peddling counterfeit currency. Apart from that, forex rates can vary wildly between one service provider to another and so can the service quality levels,” said Sudarshan Motwani, who aims to put an end to this vexation with his startup BookMyForex.com (BMF).
A stock market for forex trading
Based out of Gurgaon, BMF is an online marketplace for retail foreign exchange and private remittances facilitating easy access to forex rates for customers. The platform operates like a stock market and aims to bring about way more transparency by updating rates every three seconds.
“BookMyForex offers a live platform to banks and exchange companies to transparently compete with each other to be the best rate suppliers. In return, these banks and exchange companies get access to large sales volumes from retail customers across India,” added Sudarshan, Founder and CEO of the startup.
“For customers, this means they get the best possible negotiated rates in their cities for every product, validated in real time. While the customers complete the order booking by selecting their city and forex requirement, the bank or company selected will schedule their orders for door delivery, or pick-up from their respective location,” added Sudarshan, a banking veteran with over 30 years’ experience.
BMF was founded in 2012 by the father-son duo of Sudarshan and Nitin Motwani (Co-founder and CTO). Unlike offline players, BMF does not stock currency or partake in the actual currency exchange process. As a result, it is able to save on the manpower and infrastructural costs associated with running a physical currency exchange operation, claims Sudarshan. “We are also able to mitigate all the risks (forex exposure, theft/burglary, etc.) that come along with running a physical foreign currency business. Reduced costs incurred by us also translate into more savings for our customers,” added Sudarshan, explaining the benefits.
BMF boasts of features such as live rates, ability to exchange foreign currency at zero margin (interbank rates), ability to set rate alerts, live order tracking etc. Its systems track transactions in real-time to ensure that all orders are executed as per the pre-defined service level agreements with its channel partners. All deviations from the turnaround times are tracked to produce a service-level score for the fulfilment partner and all stakeholders are notified via email/SMS.
Option to freeze the rates and set alerts
The online platform compares exchange rates and service quality metrics across thousands of banks and exchange companies and connects the customer with the most ideal forex vendor in real time. This saves customers between 2 per cent and 5 per cent in costs, according to Sudarshan. It also offers real-time rates that updates every three seconds. The user has the options to freeze rates and set alerts. You also have the cash currency buying options from ATMs overseas, using forex travel cards that save 1 per cent to 3 per cent.
As of today, BMF has over 200,000 customers. Sudarshan said the business witnessed 300 per cent growth post-demonetisation announced by Indian Prime Minister Narendra Modi on November 8, 2016. In the same month, the company received US$2 million funding from domestic PE firm Faering Capital.
BMF started off as an online platform to bring about much-needed transparency, said Sudarshan. “Over time, BMF morphed into an inherently competitive marketplace where forex companies necessarily needed to reduce the large margins that they were charging otherwise in order to get more business through the platform. This essentially eliminated the nasty haggling process that customers had to go through in order to get a good deal on currency exchange,” he explained.
Apart from this, BookMyForex also introduced the idea of offering currency exchange at exact interbank rates to retail customers, which, Sudarshan claims, has brought about a new level of transparency as the rates offered to customers now matched exactly with the rates on search engines like Google, and forex sites like XE.com.
The modus operandi
A customer who visits BMF site or calls its hotline creates an order. The platform/staff capture the customer’s requirements, all other necessary information and collect the necessary documents. After getting the required information, its system automatically finds the best forex vendor for the customer’s order based on the rates that vendors are offering in the customer’s city and their past service quality record. The order is then pushed to the vendor and it is tracked for service-level agreement (SLA) compliance all the way until the final delivery is completed.
BMF deals in all retail forex products, cash currencies, forex travel cards, wire transfers and international demand drafts. All transactions happen in compliance of India’s central bank RBI’s guidelines and are executed at banks/exchange companies’ counters. These institutions then help it to door-deliver the required amount to the customers.
“Furthermore, we also have tie-ups with different banks to provide free withdrawals from international ATMs from BMF travel cards. Our arrangements allow us to offer exact zero changes 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 cash-on-delivery limit of up to INR 50,000 (US$760).
Currently, the marketplace offers services from over 5,000 bank and exchange company branches spread across 650-plus cities in India. It has almost 50 channel partners including banks that fulfil orders received on the platform. It now plans to add another 75 channel partners in the next three months.”
BMF offers same-day delivery for all orders irrespective of the transaction size, if the order is received before 2:00 PM. It offers instant payment solutions at its 10 delivery centres to expedite the delivery and reduce the turnaround time.
Currently, BMF facilitates the exchange of US Dollars (USD), Euros (EUR), British Pound (GBP), Australian Dollars (AUD), New Zealand Dollar (NZD), Canadian Dollar (CAD), Dirhams (AED), Saudi Riyals (SAR), Japanese Yen (JPY), Swiss Franc (CHF), Hong Kong Dollar (HKD), Singapore Dollar (SGD), Swedish Krona (SEK), Thai Baht (THB) on its platform. Additional miscellaneous currencies such as CNY, MYR, ZAR can also be exchanged but these orders are processed offline as the supply of these currencies is very limited.
The company makes money through exchange income and merchant commission. “Our platform receives exchange rate quotes from multiple vendors in different cities. These rates are provided either as fixed rates (such as 66.5 rupees to a dollar) or a variable rate that is linked to the underlying interbank data feed (Interbank rate + 0.5 per cent). Our system then compares all the rates in a specific geography. After finding the best rates, the system applies a variable margin depending on multiple factors to the best rate that was found. This margin is the amount of money that we end up making on the order,” he elaborated.
“We offer zero margin or exact interbank rates on forex travel cards that also come with three free ATM withdrawal due to which customers can buy cash currencies at exact interbank rates. Our income from this type of transaction is from share of merchant commission from card swipes that issuing Banks share with us,” he concluded.
Forex trading is a lucrative business in India, but unlicensed players run a parallel economy with foreign currency, which is often used to fund terrorism and other illegal activities. Companies like BMF are attempting to bring in transparency and thereby benefitting the customers and the country.
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