Fintech startup PayNearby will launch a cross-border remittance service in October, allowing recipients to withdraw the amount at their request rather than withdrawing the entire amount at once.

“The Reserve Bank has approved our second tranche of cross-border remittances. India receives about $80 billion in remittances yearly, whether in cash or bank accounts,” PayNearby founder, MD and CEO Anand Kumar Bajaj told PTI.

People from rural and urban areas can withdraw from various forex trading providers in regional headquarters or talukas. However, there are only 50,000-60,000 such forex providers.

“What we have shown the Reserve Bank is that it is possible to use the Rupee Withdrawal Arrangement (RDA) to go directly to the recipient’s bank account and remit the money to an Aadhaar number (linked account),” Bajaj said.
PayNearby has created a dedicated IFSC code that will act as a router to deposit funds into the recipient’s bank account linked to Aadhaar. He said the company spent about 6-7 months in the testing phase, and improvements to the product are still a work in progress.

Bajaj added that PayNearby would be able to launch the service in about a quarter of the time or in October. He said the company spent about 6-7 months in the testing phase, and improvements to the product are still a work in progress.

“Users can approach BC (Business Correspondent) agents anywhere in their village or gram panchayat and give their thumb impression to be matched with Aadhaar ID. One can withdraw like 10%, 5% or 2% of the remittance money as compared to earlier, where one had to withdraw the entire amount at once,” he explained.

Bajaj said this would benefit users as they can earn interest by depositing their remaining funds in a bank account. In September last year, the Reserve Bank of India (RBI) allowed PayNearby to test the ability to use existing RDA mechanisms to route incoming cross-border remittances to the recipient’s Aadhaar number as a virtual bank account under Group 2 under the regulatory sandbox.

PayNearby completed its beta phase earlier this month. In addition, he said, the company is also working on launching financial products for users living in rural and semi-urban areas.

“These services are for the 90% of the savings crowd. People want to put in a fixed or recurring deposit, and you can get them to invest in real estate. We want them to invest that money,” he said.

Bajaj said up to Rs 1.5 trillion allocated under Direct Benefit Transfer (DBT) had not been withdrawn into beneficiaries’ bank accounts, which had “artificially reduced consumption”.

Last month, PayNearby partnered with Protean eGov Technologies Ltd (formerly NSDL e-Governance Infrastructure Ltd) to offer PAN card-related services to its retail partners via Aadhaar and biometric-based or SMS-based OTP for its customer’s authentication.

Protean eGov Technologies is a general-purpose, citizen-centric and population-scale e-government solutions provider. PayNearby provides branchless banking and other financial services to the country’s mass market by enabling local community Kirana merchants, often referred to as “Digital Pradhans”.

PayNearby’s over 5 million micro-entrepreneurs use over 19,000 PINs to help over 20 crore customers across the country.