December 3, 2010

The I-Café As A Cash Remittance Center

With millions of Filipinos working abroad in order to support families that they left behind in the country and thousands more needing to transfer money from city to provinces and vice-versa, cash remittance is really big business here in the Philippines. The big bulk of the money transfer business are being served by domestic banks and specialized multi-national companies like Western Union, Money Gram and some local companies like LBC Express and Lhuillier Pawnshops. They have branches in different locations in the country but there are still areas in far-away places that are still unserved or underserved at present.

Pawnshops, telegram and cargo companies had already entered the business long time ago but still, I should say, there are rooms for others to join the fray and i-café is one of those qualified to become a cash remittance center. An i-café has all the requisites to handle money transfer transactions. The establishment is always online and all that is needed is a web portal provided by principal money transfer company where a transaction can be verified before cash is given to recipient of the transfer. With enough additional capital for the business model, an i-café owner can engaged in both sending and receiving money for its customers.

The income for this business model for will be the handling fee from money transfer service and in the conversion of the transmitted foreign currency to Philippine peso.  The share of the i-café in handling the money transfer transaction ranges from 2 to 5% depending on the policy of the its principal while the same percentage can be earned in the conversion deal with the receiever of the remittance.

This additional income opportunity for i-café business does not come risk-free. The physical security of a shop against robbery holdup and burglary is very important factor to consider before an i-café owner decides to enter the business. Actually, in the case of a robbery holdup after a transaction to send money to someone, the loss is double the amount of the money you are suppose to receive from a cash remittance transaction. Aside from the cash taken by the holdupper, the i-café owner will also lose the money that will be debited from his account to cover the remittance transaction.

Other than the example above that may happen in an i-café located in a risky area, the business of being a cash remittance center is worth considering by an owner of a secured internet café. This is especially one big opportunity that can augment the income of an i-café located in an area with many families whose members are overseas workers.

1 comment:

  1. You are absolutely right that security is the biggest factor when deciding to engage in this kind of business. It's the same reason why I seldom send money though this route, it's hard to be carrying big amount on the street. You don't know who are in constant look out of you. But this is a great opportunity that needs to be explored.


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