AN EMPIRICAL EVALUATION OF MONEY TRANSFER SERVICES IN INDIA

186 AN EMPIRICAL EVALUATION OF MONEY TRANSFER SERVICES IN INDIA DR.M.LATHA NATARAJAN*; DR. M.G.SARAVANARAJ**; R. SERANMADEVI*** ABSTRACT *Head/Professor, Department of Management Studies, Vivekanandha college of Engineering for Women, Tiruchengode. **Head/Professor, Department of Management Studies, Muthayammal Engineering College, Rasipuram. ***Faculty, Department of Management Studies, CMS College of Engineering, Namakkal. Money is the magnate of any person and it designed the life style of person in the world. To earn and save the money for their dependence the peoples are ready to employ at any part of this global village. To study the effectiveness of the usage of money transfer facility over the global village it is necessary to go for many researches. This paper entitled An Empirical Evaluation of Money Transfer Services, with specific focus on respondents feedback is the one under this category which is mainly focused on the various money transfer services and satisfaction of customers towards those facilities. This study is purely descriptive in nature and purposive sampling method is used; only primary data surveyed through structured questionnaire is used for this study. Data analysis was carried out including parametric and non parametric tools and findings are listed down. Suitable suggestions have been provided. The tools used in this study were percentage analysis, Ranking Method, Weighted Average Method, Correlation, Chi-Square Test, F Test, ANOVA, and Sign Test. The money transfer facility ensures the better standard of living of the respondents dependents. It will improvise the economy s foreign exchange wealth. Not only the person as individual but his dependents as his home and the nations as a whole get benefited because of the effective money transfer facility. KEYWORDS: Money Transfer, foreign exchange, parametric tools, Correlation, ANOVA, Sign Test. INTRODUCTION Money transfer is a facility which enables customers to transfer money from a location abroad to India from India to locations abroad and between locations in India. Money transfers would fall in to the following two broad groups.

187 Money Transfer Services External Internal Inward Foreign Remittance Outward Foreign Remittance Agent Specific Xpress Money Instant Cash ZOHA International money transfer Times of Money Non-Agent Specific First remit Money gram Wire Money Draft Services Trans Cash Forex Transactions I. EXTERNAL MONEY TRANSFER SERVICES - External money transfers enable customers to transfer funds from foreign locations to beneficiaries in India and remittance to beneficiaries abroad from India. These remittances fall in to the following two groups. A. INWARD FOREIGN REMITTANCES - This facility enables the customer to transfer funds to India from countries abroad. 1. AGENT SPECIFIC SERVICE: Agent Specific means that this transfer is specifically for a particular branch/centre and the addressee come to this specified branch/centre to collect the money. It won t be made available from any other branch 2. NON-AGENT SPECIFIC SERVICE: It means that this transfer is not specified for a particular branch /centre and the addressee can be receiving it from any branch with proper identity. B. OUTWARD FOREIGN REMITTANCES 1. WIRE MONEY - Wire money is the facility offered by us to enable the customer to remit the funds outside India to any other country for credit of the beneficiary s designated bank account abroad through banking channel subject to the exchange control regulations of that country. 2. DRAFT SERVICES - Its procedures are the same as the wire transfer. As per the service, we will issue Demand draft, only in any of 25 major currencies, for effecting payment abroad. It should be send by the customer directly to the beneficiary abroad. II. INTERNAL MONEY TRANSFER A. TRANS CASH - Trans cash is a facility offered to our gold loan and deposit customers to transfer their loans from one branch to another. After completing the procedures of gold loan/deposit loan, the said fund can be transferred to any branch specified by the customer.

188 B. FOREX TRANSACTIONS - Franchisee offices can undertake encashment of foreign currency notes. OBJECTIVES To study the various money transfer services and satisfaction of customers towards the various money transfer facilities. To find out the frequency of money transfer transactions and to examine the maximum limit involved for every money transfer transactions. To study the mode of disbursement and the cost incurred for the same. To check the security and safety procedural limit and delay around time. RESEARCH METHODOLOGY Research methodology is a way to systematically solve the research problem. This study is based on descriptive method. The sample size under the study is 75. Purposive sampling techniques are used to collect the data by circulating well structured questionnaire with concrete questions. Only primary data are used for the study. The following are the analytical tools used to find out results and relationships between the variables, they are Percentage Analysis, Ranking Method, Weighted Average Method, Correlation, Chi-Square Test, F Test, ANOVA, and Sign Test. PERCENTAGE ANALYSIS TABLE 1 SNo Options No of respondents % S No Options No of respondents % Age Geographical Location 1 20-30 8 11 1 UAE 18 24 2 30-40 25 33 2 USA 20 27 3 40-50 30 40 3 UK 22 29 4 50&above 12 16 4 OTHERS 15 20 Gender Number of Dependents 1 Male 48 64 1 2 12 16 2 Female 27 36 2 3 20 27 Marital Status 3 4 19 25 1 Single 35 47 4 5 11 15

189 2 Married 40 53 5 5& above 13 17 Educational Qualification Year of customer retention 1 School 4 6 1 2 12 16 2 UG 16 21 2 4 18 24 3 PG 30 40 3 6 20 27 4 Professionals 25 33 4 6&above 25 33 1 Self employed Occupation Monthly Income 10 13 1 50000-100000 28 37 2 Employees 22 30 2 100000-150000 20 27 3 Profession 25 33 3 150000-200000 17 23 4 Others 18 24 4 200000 & above 10 13 Source: Primary Data INTERPRETATION From the above table it is inferred that the maximum number of respondents are falls under the Age group of 50&above and the minimum number of respondents finds in 20 30 age group. 64% of respondents belong to the male category. 53% of respondents belong to the married category and 47% to the single category. Mostly Post Graduate and professional Qualification peoples are highly preferred the money transfer services. The people those who employed in different part of the world as professional or employees are making use of this facility more than others. This money transfer facility is maximum covered the people belongs to upper middle income group between Rs 50,000/- to Rs 1,50,000/- as their monthly income. Nevertheless of the location it is successfully scatted in all the regions. It is quite unimportant that number of dependents and the usage of money transfer facilities. TABLE 2 - RANKING METHOD SNo Options Total Rank Attractive Services 1 External 40 1 2 Internal 20 2 3 Both 15 3

190 Source: Primary Data INTERPRETATION Internal money transfers 1 Inward 50 1 2 Outward 15 2 3 Both 10 3 Frequency of Usage of External Money Transfers 1 5 8 4 2 5-10 20 3 3 10-15 22 2 4 15&above 25 1 Frequency of usage of Internal Money Transfers 1 10 10 4 2 10-20 15 3 3 20-30 20 2 4 30&above 30 1 From the above table it is inferred that the respondents are given first rank to external services, in that preferred inward services than the outward services. Both internal and external money transfers the respondents frequency of usage are likely to be more. With reference to outward money transfer services especially cost of wire money services the respondents get satisfied. TABLE -3 - WEIGHTED AVERAGE RANK METHOD S No Options Weighted Average Rank Inward Money Transfer Services 1 Xpress money 312 2 2 Instant cash 286 3.5 3 First remit 286 3.5

191 4 Money gram 319 1 5 Zoha international MT 275 5 Source:Primarydata INTERPRETATION Customer Satisfaction Factors 1 Parent company 230 2 2 Agent 218 3 3 Sending centre 155 4 4 Password 286 1 5 Turnaround time 144 5 6 Maximum amount 92 6 Safety/ Security 1 Xpress money 345 2 2 Instant cash 330 4.5 3 First remit 330 4.5 4 Money gram 355 1 5 Zoha international MT 320 7 6 Wire money 317 8 7 Draft services 335 3 8 Trans cash 323 6 From the above table it is inferred that among the inward money transfer facilities the money gram facility stands at first, second to Xpress money, instant cash and first remit facilities shares the equal rank at the third place. While ranking the factors influencing the satisfaction the security factor password protection stands at the first place and parent company, agent and sending centre holds the consecutive places. Turnaround time and the maximum amount involved in money transfers preferred at least. The ranking are given by the respondents reveals that money gram facilities stands at first, Xpress money and Draft services holds the next positions in the order, Instant cash and first remit shares the 4 th position, due to some complication in electronic mode Zoha International

192 services and Wire Money services preferred very poorly. Trans cash applied only for existing customers and it stands at the 6 th place. CHI SQUARE TEST I. Analysis for finding the relationship between frequency of usage of inward money transfer and occupation II. Analysis for finding the relationship between gender and frequency of usage of external money transfer III. Analyzing the relationship between age and customer retention. NULL HYPOTHESIS I. There is no significant relationship between occupation and frequency of usage of inward money transfer. II. There is no significant relationship between gender and frequency of usage of external money transfer. III. There is no significant relationship between age and customer retention. TABLE 4 - CHI-SQUARE TABLE Factors Calculated value Table value Degrees of freedom @5% Remark Inward money transfer & Occupation 0.75409 23.589 (c-1) (r-1) =.(4-1) (4-1) =9 CV<TV; significant Not External money transfer & Gender 0.0131 7.815 (c-1) (r-1) = (4-1) (2-1) = 3 CV < TV; significant Not Customer Retention & Age 0.2133 23.589 (c-1) (r-1) = (4-1) (4-1) = 9 CV < TV; Not significant Source: Primary Data In all the above analysis the calculated value is less than the table value. So we can accept the null hypothesis. There is no significant relationship between factors. It is concluded that the socio economic factors plays only a minor role in the frequency usage of both internal as well as external money transfer facilities. Age is not making any influence in the customer retention strategy. Nevertheless of age, all the age group peoples are making use of these facilities. F-TEST - INWARD MONEY TRANSFER SERVICES WITH CUSTOMER RETENTION Ho: There is no significant relation between inward money transfer services and customer retention.

193 TABLE 5 - F TEST TABLE X 1 (Inward Transfer) Money X 2 (Customer Satisfaction) X 1 -x 1 (X 1 -x 1) 2 X 2 -x 2 (x 2 -x 2) 2 32 16 17 289 3 9 20 16 5 25 3 9 14 9-1 1-4 16 5 18-10 100 5 25 4 9-11 121-4 16 0 7 0 0-6 36 n 1 = 5 n 2 = 6 536 111 Source: Primary Data (s 1 ) 2 = (x 1 -x 1) 2 n 1-1 = 536 4=134 ; (s 2 ) 2 = (x 2 -x 2) 2 n 2-1 = 111 5=22.2 F= (s 1 ) 2 (s 2 ) 2 ~fn 1-1, n 2-1 = 134 22.2 = 6.04 Factor Calculated F test value Table Value Degrees of freedom @5% Remarks Inward Money Transfer & Customer retention 6.04 5.19 (n1-1, n2-1) (4,5) CV > TV; Significant Since the calculated value is greater than the table value i.e., 6.04>5.19, so we may reject our null hypothesis. There is significant relation between inward money transfer services and customer retention. F TEST - INTERNAL AND EXTERNAL MONEY TRANSFER Ho: There is no significant relationship between the internal and external money transfer facilities. TABLE - 6 INTERNAL AND EXTERNAL MONEY TRANSFER X 1 (Internal Transfer) Money X 2 (External Money Transfer) X 1 -x 1 (X 1 -x 1) 2 X 2 -x 2 (x 2 -x 2) 2 40 25 25 625 10 100 15 42 0 0 27 729

194 10 5-5 25-10 100 8 2-7 49-13 169 2 1-13 169-14 196 n 1 = 5 n 2 = 5 868 1294 X 1= X 1 n = 75 5=15; x 2= x 2 n = 75 5=15 (s 1 ) 2 = (x 1 -x 1) 2 n 1-1 = 868 4=217; (s 2 ) 2 = (x 2 -x 2) 2 n 2-1 = 1294 4=323.5 F= (s 1 ) 2 (s 2 ) 2 ~fn 1-1, n 2-1 = 1.49 Factor Calculated F test value Table value Degrees of freedom @5% Remarks Internal Money transfer & External Money Transfer 1.49 6.39 (n2-1), (n1-1) (4,4) CV<TV; Not Significant Since the calculated value is less than the table value i.e., 1.49<6.39 so we may accept our null hypothesis. There is no significant relationship between internal and external money transfer facilities. ANOVA - ONE WAY TESTING VARIOUS MONEY TRANSFER SERVICES Ho: There is no significant difference between the various money transfer services. Correction factor= (T) 2 n = (75)2 45=125; Total SS= xij2-(t) 2 n = 80 SS between Sample = (Tj) 2 nj-(t) 2 n = 186-125 = 61 SS within Sample = xij2- (Tj) 2 nj = 205-186=19 TABLE 8 TESTING VARIOUS MONEY TRANSFER SERVICES A B C D E (Xpress money) (Instant cash) (First remit) (Money gram) (Zoha international Money Transfer) 3 3 1 1 0 4 2 1 1 0

195 3 2 2 1 1 6 2 1 0 0 3 2 1 0 1 5 2 1 1 0 3 2 2 1 0 4 1 2 2 0 2 2 3 1 0 Source : Primary Data Source of variation SS DF MS F ratio 5% limit Result between sample 61 (5-1) =4 6 4=1.5 1.5 0.475 =3.15 Within sample 19 (45-5) =40 19 40=0.475 F(4,40)=2.61 Reject H0 Total 80 (45-1) =44 The above table shows that the calculated value of F is 3.15 which is greater than the table value of 2.61 at 5% level with DF being V1=4,V2=40.This analysis did not support the null hypothesis of no differences in sample means. We may conclude that there is significant difference between the various money transfer services. SATISFACTION ON THE BASIS OF MAXIMUM AMOUNT INVOLVED FOR MONEY TRANSFER Ho: There is less satisfaction over the maximum amount involved for money transfer services. TABLE - 9 SATISFACTION ON THE BASIS OF MAXIMUM AMOUNT INVOLVED FOR MONEY TRANSFER A(Express money) B(Instant cash) C(First remit) D(Money gram) E(ZOHA International) 4 6 3 1 1 4 8 2 1 0 3 7 4 1 0 3 10 2 1 0

196 5 8 1 0 0 Source: Primary Data Correction factor= (T) 2 n = (75)2 25=225; Total SS= xij2-(t) 2 n = 427-225=20 SS between = (Tj) 2 nj-(t) 2 n = 408-225=183; SS within = xij2- (Tj) 2 nj = 427-408=19 ONE WAY - ANOVA TABLE Source variation of SS DoF MS F ratio 5% F limit Between sample 183 (5-1)=4 183 4=45.75 45.75 0.95=48.15 F(4,20) Within sample 19 (25-5)=20 19 20=0.95 =2.87 Total 202 24 Since the table value is less than the calculated value i.e, 2.87<48.15, we may reject our null hypothesis. There is high satisfaction over the maximum amount involved for money transfer services. CORRELATION FREQUENCY OF USAGE OF INTERNAL AND EXTERNAL MONEY TRANSFER Ho: There is no correlation between the frequency of usage of external and internal money transfer services. TABLE 10 FREQUENCY OF USAGE OF INTERNAL AND EXTERNAL MONEY TRANSFER X(Internal Money Transfer) Y(External Money Transfer) x-x (x-x ) 2 y-y (y-y ) 2 (x-x ) (y-y ) 8 10-11 121-9 81 99 20 15 1 1-4 16-4 22 20 3 9 1 1 3 25 30 6 36 11 121 66 Source: Primary Data (x-x ) 2 =167 (y-y ) 2 =219 (x-x )(y-y ) =164

197 x = x n = 75 4=19; y = y n = 75 4=19 r= (x-x ) (y-y ) (x-x ) 2 (y-y ) 2 = 164 22500= +0.007 Since r=0.007 there is almost no correlation between the frequency of usage of internal and external money transfer services. SIGN TEST MONEY TRANSFER REMITTANCE TO THE BENEFICIARY BASED ON NUMBER OF DEPENDENTS. Ho: There is no significant relationship between money transfer remittance and number of dependents. Total no of (+) signs=5; Total no of (-) signs=5; Sample size (n) =10 P=no of (+) symbols; P=5 10=0.5; q=1-p=1-0.5=0.5; p= n n o of observations =10 10=1 z =p-p pq n ~ N (0, 1) =1-0.5 0.5*0.5 10 = 0.5 0.1581=3.16 ~ N (0, 1) TABLE 11 MONEY TRANSFER REMITTANCE TO THE BENEFICIARY BASED ON NUMBER OF DEPENDENTS X (MT Remittance) Y (No of Dependents) SIGN (X-Y) 8 40-20 15 + 22 10 + 25 8 + 10 2 + 15 25-20 42-30 5 + Source: Primary Data 0 2-0 1 - Table value can be obtained from the large sample at 1% level of significance i.e., 2.58. Since the table value is less than the calculated value, we may reject our null hypothesis i.e., there is

198 significant relationship between money transfer remittance to the beneficiary and the respective number of dependents of the respondents. FINDINGS Maximum numbers of respondents are falls under the age group of 50&above, male category and married category. Majority of respondents are PG qualified and professional occupation with average monthly income lies between Rs 50,000/- to Rs 1,50,000/- are making use of this facility. Mostly the customers are retained for more than 6 years. Respondents given first preference to external and inward services. Since Frequency of usage of external money transfer is more than 15. Frequency of usage of internal money transfer is more than 30. Most of the respondents are satisfied with the cost collected for wire money services, money transfer remittance and with defaults money refunded. Most of the respondents given first weightage to money gram and in relation to security Password secured the first place. Socio economic factors like gender, age, occupation has no effect on money transfer services usage. It is concluded that the socio economic factors plays only a minor role in the frequency usage of both internal as well as external money transfer facilities. Age is not making any influence in the customer retention strategy. Nevertheless of age, all the age group peoples are making use of these facilities. There is significant relation between inward money transfer and customer retention, between geographical location and cost collected for wire money services. There is significant relationship between various money transfer services. No such relations find between the internal and external money transfer transactions There is high satisfaction over the maximum amount involved for money transfer services. There is significant relationship between the money transfer remittance to the beneficiary and the respective number of dependence of the respondents. SUGGESTIONS From the study it is found that minimum number of respondents is in the age group of 20-30 and poor representation from the female category. So it is necessary to add new features on money transfer services to attract the young customers and introduce plans to attract more female customers. By providing effective awareness and training program it is good to cover all the segments of people to make use of the facility offered by them. This facility of money transfer is alternative used by the huge income holders, by providing some innovative and strategic plan it is highly possible to attract all those group of people. From the study it is found that frequency of usage of external money transfer is less than internal money transfer services. So necessary steps to be taken for increasing the frequency of usage of external money transfer services.

199 From the study it is found that some of the respondents are highly dissatisfied with cost collected for wire money services. So necessary steps must be taken for decreasing the dissatisfaction level among the respondents. CONCLUSION The world now seems to be a global village. Almost all the segment people like to travel all over the globe to earn money by proving their efficiency. Moreover it is considered as the main source of inward foreign money remittance to the country. So it is necessary to built up and provide inventive technology to the user to enjoy the benefits. But even more it is necessary to develop much more facilities and services in relations with money transfers as quickly and safely as possible. The customers also are skeptical or apprehensive about the use of online money transfer, as they doubt the security of such a transaction. It may conclude that there is tremendous demand for fast means of transferring money from abroad by Indians in particular. REFERENCES Apte.P.G. (2007) 4 th edition, International Financial Management, published by TMH publisher, New Delhi. Donald R Cooper, and P S Schindler, Business Research Methods, 9 th McGraw -Hill Publishing Company Ltd., 2007. Edition, Tata Dr.Senapathi.R (2010),1st Edition, Business Research Methods published by Lakshmi Publications, Chennai. Jhingan.M.L. (2007),7 th Edition, Money, Banking, International Trade & Public Finance Published by Vrinda, New Delhi. Kothari. C.R.(2009),2 nd Edition, Research Methodology - Methods & Techniques, published by New Age International Pvt Ltd, NewDelhi. Meir Kohn(2007), 2 nd Edition, Financial Institutions and Markets, published by Oxford University press, New Delhi. Paneer Selvam, (2007) Research Methodology, Prentice Hall of India Pvt. Ltd / Pearson Education, New Delhi. Ramakrishna Pillai, (2000), Subsidiary statistics, published by Vikas publications, Kollam. Zikmund, Business Research Methods, 7 th Edition, Cengage Learning India Pvt. Ltd., 2007.