Fintech startup PayNearby to launch cross-border money transfer services by October

Fintech startup Pay nearby will start a facility for inward cross-border remittance by October so that the recipients can withdraw the amount as per their requirement instead of taking the entire amount at once.

“The Reserve Bank of India (RBI) has given us approval under the second cohort for cross-border remittances. India receives about $80 billion in remittances every year, which either comes in cash or in bank accounts,” Anand Kumar Bajaj, Founder, MD and CEO director, told PayNearby PTI.

People from rural and urban areas can withdraw from various currency exchange providers at the district headquarters or talukas. However, there are only 50,000-60,000 such forex providers.

“What we showed 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 go directly to the bank account of the beneficiary, and money can be transferred to the Aadhaar- the 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 beneficiary.

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 thumb impressions that match the Aadhaar ID. And one can withdraw as little as 10%, 5% or 2% of the remittance money as opposed to previously where you had to withdraw the entire amount at once,” he explained.

“It will greatly benefit the users 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 possibility of routing inward cross-border remittances to the recipient’s Aadhaar number as a virtual bank account using the existing RDA mechanism of its second cohort under the Regulatory Sandbox for Cross Border Payments.

PayNearby completed its testing phase earlier this month.

Besides, Bajaj said the company is also working towards launching financial products for users living in rural and semi-urban areas.

“These services are for the mass 90% citizens who save money. People want to save in a fixed deposit or a recurring deposit, you can get them to invest in a property… We want them to invest that money,” said he .

Bajaj said as much as Rs 1.5 trillion disbursed under Direct Benefit Transfer (DBT) has remained undrawn in beneficiaries’ bank accounts, “artificially limiting consumption”.

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 its customers.

Protean eGov Technologies is a universal, citizen-centric and population-scale provider of e-governance solutions.

PayNearby offers branchless banking and other financial services to the mass segment of the country by activating the local neighborhood kiranas, popularly known as ‘Digital Pradhans’.

PayNearby’s 50 lakh plus micro-entrepreneurs across over 19,000 pin codes are helping more than 20 million customers across the country.