KUALA LUMPUR: Merchantrade Asia Sdn Bhd, the biggest money services business (MSB) provider by agent network in the country, has acquired money changing company Vital Rate Sdn Bhd.
Merchantrade’s founder and managing director Ramasamy K. Veeran said the acquisition is in line with the company’s strategic goal in capturing the retail market of the money exchange business, especially at prime locations.
“The strategic advantage of Vital Rate’s business is that it has a presence at high-end shopping malls such as Pavilion, KLCC, KL Sentral and other strategic tourist areas, and we can now reach out to a wider demographic of customer base,” Ramasamy said at a briefing.
He said with this acquisition, Merchantrade is gearing to capture a 10% overall market share by the year 2020.
The acquisition will mean a combined immediate market share of Merchantrade and Vital Rate at 4.7% based on an estimated industry value of RM70bil in 2016.
“Merchantrade’s strong brand and expertise in the MSB industry, with Vital Rate’s knowledge in currency management, will bring added value and advantages to customers,” he said.
Ramasamy said that while the industry is fragmented now, Merchantrade as a bigger group could leverage on this to build up its brand.
“Today, there is no strong brand in the money changer market and most are being run like a family business. You cannot find a single brand throughout the country to serve this market. People want better brands and better customer service.
“Our spreads will be competitive. If we do not offer that, people wouldn’t come to us. We have to be very competitive,” Ramasamy added.
He said the company would capitalise on the growth in inbound tourists and Malaysians who travel abroad to build a strong brand in the retail market.
“It is a motivating factor for us to quickly move into this segment due to its dynamics, and the fact that the tourism industry is a key economic sector for the country,” Ramasamy said.
The acquisition will expand its network of physical retail branches to 82 Merchantrade-owned branches, excluding wholesale outlets.
On its e-remittance business, he said that this year, the company is targeting RM800mil worth of transactions compared with RM650mil done last year.
“I believe that next year, it will hit the RM1bil mark,” he said.
Ramasamy said the company would look into the possibility of an initial public offering in the future. “I cannot disclose anything at this moment. We are looking into this,” he said.
We're sorry, this article is unavailable at the moment. If you wish to read this article, kindly contact our Customer Service team at 1-300-88-7827. Thank you for your patience - we're bringing you a new and improved experience soon!
What do you think of this article?