Transcript HOME REMITTANCE OF MONEY - Welcome To ABS Site-SL

ELECTRONIC HOME
REMITTANCES
An ABS proposal
INTRODUCTION
An ABS introduction
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Company formed in 1995
Principals played instrumental roles in introducing
automation to the Pakistani Banking Sector
SWIFT, NIFT, Secure Internet Messaging Solutions
Principals have over 100 man years of banking
automation experience
PayPakistan.com
BACKGROUND OF PROPOSAL
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Pakistani expatriates Remit between $3-5 billion annually
to Pakistan
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Revenue generated by banks is $60 million annually from
this service alone
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Business is dominated by the 5 large Pakistani banks,
which have overseas presence
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Banks/institutions without overseas presence have not
been able to tap into this business/space
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Cutting edge technology allows ABS to identify an ITES
opportunity which will enable institutions without overseas
presence to tap into this market
Solution is available, which will enable Bank AL Habib to
enter this space, with the time to market within 3 months
PayPakistan.com
MARKET SIZE
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Pakistanis remit over US$ 3.00 billion
to Pakistan per annum (Source: SBP)
Remittances through un-official
means are estimated at $2 billion
Remittances is one of the highest
foreign exchange earner for Pakistan
Total potential revenue base of
market size is US$ 60 million/annum
(includes Hundi & ME sectors)
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Distribution of Market Size
Sector
Official
Un-Official
Total
%
(figures are in millions per annum)
USA
$1,152
$720
$1,872
36%
UK
$324
$200
$524
10%
Europe/Aus $336
$220
$556
11%
UAE
$576
$360
$936
18%
ME
$768
$500
$1,268
25%
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Having seen the market size’s and
potential revenues, we will now
present the ABS solution which is:
Financially Attractive
 Technically Sound
 Operationally Efficient
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Current Options
Current Options available
to overseas Pakistanis for
Home Remittances are …
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OPTION 1
Pakistani Bank Branches abroad accept funds for home
remittances
Advantages:
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Free service to the sender
Disadvantages:
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Branches are not located in many cities
Branches not 24/7 operations (banking hrs only)
Getting to a Pakistani Bank branch is time
consuming
The cost of time and travel, cost of time off from
work and the inconveniences faced are extremely
high
No tracking facility
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OPTION 2
Direct transfer through a Foreign Bank
Advantages:
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Sender bank branch located in close proximity of
sender
Disadvantages:
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Prohibitive charges
Not 24/7 for international remittances
Funds credit date at receivers bank account in
Pakistan is not known (anywhere from 3 days to 2
months)
Extra charges for tracking and not done Real Time
Need Routing & Swift number details from receiver’s
bank, which is often difficult to obtain and can cause
serious delays if incorrect
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OPTION 3
Fund transfer service companies like
Western Union and Money Gram
Advantages:
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Branches are located everywhere
Online and offline money deposit options offered to
senders in North America and Europe
Fund transfer instant (within 5 minutes)
Funds available for pick up in multiple locations
across Pakistan (GPO/National Bank for Western
Union, UBL/Al-Falah for Money Gram)
Disadvantages:
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Fund transfer rates are expensive ($15-85 from US)
Poor Exchange rates offered (Rs. 56.2 v/s 57.8)
Additional services are charged and expensive
PayPakistan.com
OPTION 4
Other fund transfer companies like Yahoo,
Moneybookers, Ikobo, Xoom, Onlinefx, etc
Advantages:
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Online transaction processing allows sender 24/7
convenience of sending funds from home or office
Instant fund transfer (within 5 minutes) if receiver has fund
transfer service ATM card
Disadvantages:
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Fund transfer rates are expensive
Most services issue an ATM card for fund withdrawal from Cirrus
ATMs. Fund withdrawal rates high for receiver
May take up to 4 weeks to receive first ATM card
Assumption is receiver is ATM savvy
ATM’s are not widely located everywhere (limited coverage in
Pakistan)
Additional services are charged and expensive
PayPakistan.com
Option 5
UBL click2Remit
UBL has realized the need to enter the electronic remittance
Space…however, with a solution that they have not written,
are not managing and can not customize
Advantages
 Online 24/7
 Credit, debit cards and eCheques accepted
Disadvantages
 Only for US customers
 Direct credit only within UBL accounts
 Non-UBL accounts have a mailing system solution
 Delivery process not electronic
PayPakistan.com
Option 6 & 7
Hundi/Hawala Systems
 Based on trust
 Unsecured
 Illegal
 Open to Money laundering
 All governments strongly discouraging this means
Exchange Companies
 These are primarily an extension of a Pakistani
Bank
PayPakistan.com
Summary of Disadvantages
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Most are not 24/7
Transfer charges high
Global presence issues
Poor exchange rates
Coverage issues (ATM)
Not integrated with Pakistani banking system
Summary of remittances to sender not readily
available
Delay in funds transfers
No tracking facilities
PayPakistan.com
OPPORTUNITY
An opportunity exists for a service
that can:
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Overcome all the disadvantages
listed
and
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Is Remitter friendly (easy to avail
and operate)
PayPakistan.com
WHAT DO WE PROPOSE
Functionally ABS proposes
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Service will be an online 24/7 Remittance Solution
available to anyone anywhere
Economical Rates (free under the HRS)
Rupee based transactions
Customized to integrate with the Pakistani Banking
System
Bank Accounts credited within 24 hours or sooner
(depending on recipient bank)
All transactions documented from end to end,
meeting all money laundering regulations in Pakistan
& abroad
System prompted tracking of funds
Tracking of Funds Feature available to sender
Summary of remittances available to sender
PayPakistan.com
WHAT DO WE PROPOSE
Operationally ABS proposes
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ABS is selling a solution, not a software
Solution will be delivered based on a Strategic
relationship between ABS and Bank AL Habib
ABS’s role will be handling all aspects of
service up to the transfer of funds into the
Internet Merchant Account
Bank AL Habib’s role will be handling of all
aspects of the processes after the delivery of
funds in the merchant account
ABS will handle the technical aspects while
the Strategic Partner will handle the financial
and administrative aspects of the service
PayPakistan.com
ABS Solution
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Service will be delivered thru the internet – accessible from
anywhere/anytime 24/7
Remitters access the service website
New customers/remitters register (email verification/activation process);
existing customers simply log-on
Customer enters details of remittance and recipient
Credit Cards is the current payment platform (others to follow)
Website secure ‘payment processing’ comes into operation with Secure
Socket Layer (SSL) technology and customer enters credit card details
Payment processing procedures check card validity and enters into
authorization process. It immediately informs on website within 3 seconds of
acceptance/decline of transaction to customer
Auto email sent to customer of transaction confirmation with TR# and
Payment receipt
Money credited to internet enabled Merchant Account in Pakistan within 5
seconds of transaction acceptance
What have we achieved?
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Satisfied money laundering issues (end to end doc, amt, sender)
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Secured Payment platform
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Delivered funds to Bank AL Habib Ltd merchant account from customer
account within 5
seconds
Solution ahead in timeline
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ABS Solution…(2)
Funds will then be transferred from Merchant Account to
Home Remittance department of each bank
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Citibank will (at a pre-determined time) transfer funds to Home
Remittance department of each bank via SWIFT, based on
Consolidated bank wise report submitted by ABS (under the
instructions of Bank AL Habib)
Corresponding detailed list (with recipient details) will be provided
to each bank for onward credit of account holders (under the
instructions of Bank AL Habib)
MT103 generation for real time or offline delivery to banks
SBP regulation of 24 hour credit for Home Remittances apply
Auto Reconciliation will take place at predetermined times between
ABS website transaction information and Citibank payment
Gateway collection
System overcomes all the disadvantages and is totally electronic
from source to recipient bank
What have we achieved?
Successful transfer of funds to recipient bank account electronically
and speedily
PayPakistan.com
ABS Solution…(3)
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POD from recipient bank will be sent to Bank AL Habib Ltd
administration cell for status update (paper or electronic)
Database of all transactions (with their status) is
maintained for ready references by customers at any time
System prompted follow up of transactions for all
exception reports will improve delivery time and Turn
Around
Online tracking of status by customer available thru its life
cycle
Track back interface will be available for Home
Remittances departments for immediate updates
What have we achieved?
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Follow up online on status and system prompted
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History available for viewing and printing (also can be used
for consulate submissions)
PayPakistan.com
Security Issues
128 bit encryption
 SSL
 Firewalls (hardware & software at
both ends)
 Secure Payment Gateway
 Best of breed technologies
 Encrypted database
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PayPakistan.com
Financials
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INCOME PROJECTION
Based on market stats and
surveys
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Total market size US$ > 3.0 Billion annually
Hundi is another 2 billion (not included in calculations)
Less Middle East residents due to non-credit
card culture (US $1.2 Billion annually)
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Present Market Size= US$ 1.8 Billion/annum
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Average Annual Transactions = 3.6 Million
PayPakistan.com
INCOME PROJECTION…(2)
Assumed target market share
10% - valued at US$ 180 Million per annum
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Average transaction volume is: 360,000/annum
Remittance commission from SBP is as follows:
SR 25 x 360,000 = SR 9 million = Rs. 135 million
Impact of 1% growth = Rs. 13.5 million/annum
Total Market Share (Hundi + Legal)
10% = Rs. 378 Million/annum
1% impact = Rs. 37.8 Million/annum
PayPakistan.com
EXPENSES AT A GLANCE
The expense for this project can be divided into
two distinct areas
A)
B)
Technical & System expense
The fund handling and distribution expense, both
initial and running
Details of Technical & System Expenses
 System Development
 Hosting
 Cost of Servers
 Cost of Bandwidth Requirements
 Cost of Communication
 Cost of System Operations
 Cost of Continued Development
 Cost of Project Management
PayPakistan.com
EXPENSES AT A GLANCE
Details of Bank AL Habib
Expenses
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Cost of setting up Merchant Account
Cost of Publicity campaign, initial & running
Cost of Distribution thru Banks Telex Charges, etc
Cost of fund deposit and withholding costs by
Merchant Bank
Cost of Dispute settlements/Charge backs
Legal costs
Costs of arrangements with Banks
Cost of Transaction Authorization charges
Cost of Insurance against charge backs
PayPakistan.com
We have demonstrated a
solution which is:
- Financially Attractive
- Technically Sound
- Operationally Efficient
Whats the next move?
PayPakistan.com