Aiming to disrupt the global remittances market

Headquartered in Singapore, InstaReM is a digital cross-border payments company, which is licensed as a Money Services Business in Singapore, Hong Kong, Australia, USA, European Union, India and Malaysia. “It has created a unique payment mesh in Asia, which is being leveraged by financial institutions, SMEs and individuals to make fast low-cost cross-border payments,” says Prajit Nanu, Co-founder and CEO, InstaReM, adding with pride that with its 8000+ banking partnerships globally, InstaReM powers local payments to more than 55 countries and reaches 3.2 billion people across the globe.

Disclosing that he had nothing to do with international money transfers for most of his decade long career as a sales and consulting professional in India, Nanu mentions that an accidental personal experience got him thinking about a problem that was so huge and so universal. “This incidence got me thinking about how I could convert this problem to a successful business. I spent a lot of time thinking how I can scale this concept. Michael Bermingham, the other co-founder, who shares my vision, was the first person I called in London when I strongly felt a need for a convenient, transparent and affordable digital funds transfer platform. After tonnes of in-depth research and identifying a better way to move money across borders, we got started on a technology-based solution. We started working together in 2013 to combine Michael’s expertise in compliance and my experience in sales and consulting, to incorporate InstaReM in August 2014 in Singapore,” states Nanu. They started operations in Sydney, Australia.

The startup has got endorsement from some of the marquee investors and has raised US$ 18 million in two rounds of funding. Earlier this year, InstaReM became a member of the RippleNet, Ripple’s global network of banks and other financial institutions, facilitating quick and secure payouts for RippleNet members in Southeast Asia. “When we started in 2015, we were 10 staff and focused only on one corridor, but today we have 150 staff and are present in 2000+ corridors,” comments Nanu.

Cost-effective solutions
InstaReM offers efficient solutions for the retail as well as corporate/SME users. There are many factors that differentiate InstaReM as a money transfer fintech.

Zero-Margin FX Rates: InstaReM converts currency at Zero-Margin FX rates. It offers mid-market rates sourced directly from Reuters and does not add any margins on FX at all, unlike most banks and money transfer services. “We just charge a nominal fee to cover the costs of processing the transactions. InstaReM is listed as one of the most cost-effective money transfer service in a number of corridors originating from Asia-Pacific in the World Bank’s Remittance Price Worldwide database,” explains Nanu.

Transparency: InstaReM’s transaction charges are shown before you make the remittance, unlike banks or traditional remittance firms who charge an FX spread (the difference between the inter-bank currency conversion rate and the rate quoted by the bank or money transfer company), in addition to the transaction fee.

Best Transfer Amount Guarantee: The company offers a Best Transfer Amount Guarantee to all its clients.
Speed of transaction: InstaReM is able to transfer funds typically within 24 hours in Asia, compared to the average two-to-four days transfer by banks.

Wide reach: With it’s network of 8000+ partner banks, businesses and individuals from Singapore, Australia, United States, European Union/ United Kingdom, Malaysia, Hong Kong and India are able to remit money to over 55 countries worldwide.

Bulk payments: Corporations / SMEs are able to use InstaReM’s MassPay platform for seamless bulk transfers to multiple beneficiaries in multiple currencies and regions.

Innovative approach
The focus of innovation at InstaReM is to address traditional challenges in cross-border money transfers. Leveraging the P2P model, InstaReM is disrupting the remittance business by offering faster and convenient money transfers at a fraction of costs compared to traditional players.

With InstaReM, there is no physical cross-border handling and movement of funds, unlike traditional remittance companies and banks, as InstaReM transfers funds from its local bank account to the payee’s bank account through its banking partners in the receiving country. “This allows for InstaReM to avoid incurring and passing on international bank handling fees to customers. InstaReM also bypasses SWIFT, which not only makes it more cost effective but also speedier for end users,” explains Nanu.

Nanu foresees a huge potential in digital remittances. He reminds that despite its advantages in terms of lower cost and convenience, as much as 90 per cent cross-border money transfers are still done via expensive and time-consuming traditional channels. “With our innovative approach we are looking to disrupt the global remittances market,” he mentions, disclosing that in the future, the company is in the process of acquiring licenses in Asian markets such as China, Japan, Indonesia, The Philippines. “We will also look to expanding into other high-traffic corridors in the Middle East at an opportune time in the future. InstaReM is also exploring partnerships with the members of RippleNet, to facilitate quick and secure payouts for the in Southeast Asia,” he says.

The cross-border money transfers is a huge, but inefficient, and is waiting for disruption. According to the World Bank estimates, global remittances stood at US$ 613 billion in 2017, up 7 per cent from $573 billion recorded in 2016. Pointing out that in 2017, the top five remittance receiving countries were India (US$ 68 billion), China (US$ 63 billion), Philippines (US$ 32 billion), Mexico (US$ 30 billion) and France (US$ 25 billion), Nanu reminds that for millions of families, remittances are the only source of income, providing them with financial security and access to basic necessities like education, healthcare and housing. Unfortunately, the average cost of sending remittances is as high as 10 per cent in those corridors who depend on it more. “Imagine losing US$ 1000 on a US$ 10,000 transfer! This is where InstaReM is looking to make the difference,” he asserts.