Citigroup Inc. is hoping to attract depositors by upgrading its U.S. remittance service to India and making it available to almost anyone in the two countries.
The New York company said Thursday that its Online Remit service can be used by anyone with a bank account. Payments must be initiated online, either through an automated clearing house debit to the sender's bank account or by charging a debit or credit card.
Suresh Bajpai, Citi's global head of digital banking and payments, said in an interview Wednesday that the service is aimed at noncustomers in the United States.
"There is a large target population, a large set of prospects, that may not be banking with Citi," Mr. Bajpai said.
The service is the first phase of a larger but targeted remittance effort, he said. Citi expects to introduce a United Kingdom-to-India service soon, followed by a United Kingdom-to-Poland service, a United States-to-Poland service, and a United States-to-Latin America service.
Offering remittances would help Citi appeal to "the migrant populations in the world," he said.
"Managing life in multiple countries is always a challenge," he said. "A natural choice was to look at the needs of our customers, whether they are in India or in Mexico or in the Philippines."
Analysts said the strategy is an improvement over an earlier plan to deliver international remittances all over the world through Citi's c2it service, which was launched in October 2000 as one of the few bank-run competitors to eBay Inc.'s PayPal Inc. Citi closed the service in November 2003.
"Focusing it just makes more sense," said Jennifer Roth, a research director with the global payment practice at TowerGroup Inc., an independent research unit of MasterCard Inc. Though c2it offered transfers all over the world, "why support a transfer method for sending funds to Tahiti, let's say, when it might not make sense cost-wise?"
Linking the United States and India is an good starting point, Ms. Roth said, because that remittance corridor is very active. India is the world's top recipient of remittances, and these payments have been more insulated from the trends that have dragged down volumes to other nations, she said.
"We're seeing a definite decline, at least on the Mexico corridor," she said, but "India is definitely one of those corridors that is not impacted by the economy," she said.
Gwenn Bezard, a research director at Aite Group LLC, said another advantage of Online Remit over c2it is that despite the new service's narrower geographic focus, the underlying technology has given it a broader reach.
The old service "was mostly online-to-online" payments, Mr. Bezard said. With Citi Online Remit, "you have a lot more flexibility in terms of where you can send the money [and] into what type of account."
With Online Remit, which went live last week, funds are sent electronically to Citi's Indian unit, which deposits the money into the recipient's bank account or creates a check that is delivered to the recipient'. Payments sent to non-Citi accounts are forwarded across the Indian version of the ACH network to the receiving bank.
Citi plans to charge $4 for the service, though it is currently waiving the fee as part of a promotional campaign.
Online Remit permits transfers of up to $10,000, and Mr. Bajpai said the typical transaction is less than $1,000.
Citi has operated in India since 1902, and for two decades it has offered a service that lets its U.S. customers send money to its Indian customers.
Global remittance volume is slowing, Mr. Bezard said, but bankers are becoming a more important part of the market.
"We have seen a steady interest in money transfers" from banks "in the past five to seven years," he said. "I wouldn't say that we are seeing a massive push by banks. We are seeing steady interest year-over-year."
Wells Fargo & Co. said last week that its remittance volume more than doubled last year over 2007, and that it was encouraging more banks to offer remittance services.
Both Wells and Citi have said that as more bankers offer money transfers, consumers will become more likely to think of sending money through a bank instead of through such well-established players as Western Union Co.
The Online Remit service is based on QuikRemit, a service of PayQuik Inc., a Philadelphia company that Citi bought in January of last year.
