Merchantrade eyes regional expansion

KUALA LUMPUR (Jan 2, 2014): Merchantrade Asia Sdn Bhd, the first and largest non-banking remittance service provider in the country, is looking to expand its services regionally in another two years via mergers and acquisitions, after gaining success in the Malaysian market, said its managing director Ramasamy Veeran (pix).
He said among the countries that are on his radar for expansion is Japan, Singapore and Australia.
"We may expand our remittance business regionally in another two years. We may look into acquiring a company," he told SunBiz recently.
Ramasamy said the plan is to track Malaysian students in these markets to use its services. "Parents will be able to send money to their children who are studying in these markets," he said.
He said Merchantrade forecasts that it would have handled close to RM2.3 billion in remittance collection in 2013, and expects the company to process over RM3 billion in remittance collection in 2014.
Ramasamy who claims to have a 11% share of the outbound market expects it will be able to grow this in 2014.
According to him, the total outbound remittance market in 2012 stood at RM19.7 billion.
The largest remitters are Bangladeshis, followed by Indonesian, Nepalese and others.
Merchantrade, which provides money transfer as well as money changing services, currently operates 62 branches with 550 workers now. In addition, it has 73 appointed agents operating at 127 locations.
"We started out as an equipment supplier and voice over internet protocol (VoIP) player. We were focusing on calling cards and wartel businesses. That was way back in 2003. Of course, it was a sunset business and went down drastically, when the prepaid market came in aggressively in 2004," he said.
"Then, we transformed our business in 2006 and decided to venture into mobile virtual network operator (MVNO) and remittance services. In 2007, we obtained the licenses (from regulators) for the businesses. Then we had investment from Japan's Sumitomo Corp in 2009 and become an affiliate of Sumitomo," he added.
At the initial stage, Ramasamy said, the two biggest challenges he faced were in meeting capital requirements as well as handling competition from many global players.
"We were able to compete with global players and we learned how to survive. We started by servicing foreigners and expatriates who were working in Malaysia. Today, Malaysians are also using our remittance service," he said.
Ramasamy, 44 years, who has been working on the sales side, always wanted to venture into business. "I wanted to do business. I tried to do something, when I was young. I founded the company in 1996," he said.
"For the younger generation who wanted to venture into business, if they have the passion, then it will drive them. They need to have mental discipline as challenges will always be there," he added.
In 2011, he said the company launched its own online money transfer service, E-remit. Other services that Merchantrade offers including money exchange services and mobile money transfer service.