Fintech Tracker: Can BookMyForex Make Money By Selling Money?

BookMyForex offers retail customers the best available forex rate but can they hold on to the marketshare?

Five hundred rupee banknotes are arranged for a photograph in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)
Five hundred rupee banknotes are arranged for a photograph in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

If you’re planning a trip abroad, you’re almost certain to buy your air tickets online. You will also, in all probability, book your hotel and arrange for local transportation online. So why not buy your foreign currency online too? Especially if you can get a better deal than what you get through the money changer at the airport or your bank.

That’s the sales pitch online currency marketplace is using to grab a slice of the high-volume retail currency market. The pitch has worked well, according to the company’s co-founder and chief technology Officer Nitin Motwani.

BookMyForex went live with its website in November 2012 but not in the marketplace form that it exists today, Motwani told BloombergQuint in a phone conversation.

Our core thought process at that time was that retail e-commerce was not big. Even Amazon, Flipkart and Snapdeal weren’t big. Most of the online e-commerce at that point was in travel. We thought, everything in travel is online, but we realised that the money that buys everything is not online. So we figured that it would make sense to bring a travel related service, like foreign exchange, online as well. 
Nitin Motwani, Co-Founder & Chief Technology Officer, BookMyForex

In the first two years of operations, BookMyForex only partnered with one bank, Axis Bank, and later with the foreign exchange division of the Centrum Group. Business was good but the company’s founders felt that the true potential in the foreign exchange business was in its fragmented nature. Rates varied depending on the time, the day, and on market conditions.

“We realised that we needed to standardise our service and the value that we could offer to the customers. In order to do that we realised that we had to tie up with more people. That’s when a real market place model started emerging,” said Motwani.

The objective then changed to offering the best possible rate for foreign exchange; a rate cheaper than that offered by foreign exchange companies, banks, and local money changers (who typically charge up to six percent) and hotels and airports (who charge as much as 10-15 percent), he said.

Making Money Selling Money

From having three channel partners at the end of 2014, BookMyForex now has close to 60 on board, according to Motwani. The website now compares these channel partners on a real time basis on parameters like rates and historical service quality. It eventually provides a customer with the best option.

The service is available across 650 cities in India with doorstep delivery offered in 185 cities, according to the website. Customers can choose from options ranging from a foreign exchange card, hard currency, traveller’s cheques and international remittances. Approximately 40 percent of volumes come from the forex card, while the remittances segment gets 30 percent and hard currency accounts for 30 percent.

“What we essentially do is that we are, in real time, able to compare forex rates across foreign exchange companies and banks in specific areas across India,” said Motwani. “On the basis of these two criteria, we’re able to determine who is the best vendor to service a particular order.”

Once a vendor is selected, service level agreements with BookMyForex mandate that the customer must be contacted within 15 minutes. The order must then be fulfilled within a maximum of six hours.

According to Motwani, the company’s channel partners typically offer foreign exchange at 0.2-0.3 percent above the interbank rate, which is the base rate.

“Once they give us the rate, we use our algorithms to figure out which vendor to select and then after we select the vendor, we add up our own margin on top. So that is the money that we end up making,” he said.

The margin BookMyForex makes generally varies between 0.2-0.6 percent. It depends on factors like competition in a given geography, the availability of currency and the rate of cancellations that have been witnessed in the past.

In the year to March 2017, the company will likely process currency transactions amounting to Rs 500 crore, up from Rs 180-200 crore in the previous year. Motwani anticipates that the volumes will rise to Rs 1,500 crore next year.

Revenues have grown in line with volumes and the company will likely end the year with a turnover of Rs 2.5 crore, he said while adding that he expects this to grow threefold next year. BloombergQuint could not independently verify the financial information provided by the company.

Fintech Tracker: Can BookMyForex Make Money By Selling Money?

The First Mover Advantage

The online foreign exchange marketplace is very quickly becoming densely populated.

There were no players in the online space before we entered. After we entered, every year there are new entrants.
Nitin Motwani, Co-Founder & Chief Technology Officer, BookMyForex

Despite this, BookMyForex, according to Motwani, continues to hold a market share of between 70-80 percent in the online space.

An increasing number of the company’s channel partners have decided to start their own service online. This includes Thomas Cook, Weizmann Forex and the Centrum Group. The latter has started a portal called These companies, according to Motwani, use the websites as a customer acquisition engine and then use their own branch networks to complete transactions.

Another breed of competitor is of the same build as BookMyForex and offer a forex marketplace. These include,, and

Low Barriers To Entry?

I think this is a difficult business model, because there is no barrier to entry. In the e-commerce space, Amazon came in and blew everyone out of the water. But they’re not simply bringing buyer and seller together. They got in early, put in a lot of money, and offered a lot of value added service. 
Jamal Mecklai, MD & CEO, Mecklai Financial & Commercial Services

Mecklai, a veteran of the forex markets in India, told BloombergQuint that the traditional players in the foreign exchange space are not going to let business slip away and will enter the market when they feel it is conducive.

“These guys (BookMyForex) primarily target the retail sector. There’s a big gala there that can be squeezed. But in the end, I feel, technology will ultimately squeeze you (the service provider),” he said. Mecklai feels the winners in this space will be those who can provide something that others cannot.

Motwani believes that the differentiating factor for BookMyForex is its wide network of channel partners, which ensures that his customers get the best rate. The ability to offer the lowest rate is also an outcome of the higher competition on the online marketplace. The other factor, he said, is that BookMyForex has invested in the entire process - from the placing of the order to the delivery of the product.

The problem is that other players in the online space are doing this too. BuyForexOnline, for example, offers a 24x7 helpline, which users have found particularly useful when in a foreign country.

Currency Without Borders

According to a Bloomberg report in September, the currency market globally has an average daily volume of over $5 trillion. In the considerably smaller market in India, BookMyForex, according to Motwani, has a share of 0.2 percent. To be sure, a large portion of this volume is accounted for in the interbank segment.

“One of the things that we want to do quickly is move outside of India, but we don’t want to do that in a premature fashion. We want to make sure that our product is solid, that we can handle large volumes. It’s still a year to go before we can enter foreign markets,” said Motwani.

Its expansion plans may be supported by existing investors. In February 2016, private equity firm Faering Capital picked up a 26 percent stake in the company for Rs 12 crore.

At the current run rate, Motwani expects the company to break even within a year and a half.

This report is part of a series profiling fintech firms changing the way financial services operates in the India. The series will play out every weekend on