Tier-2 and Tier-3 cities are emerging in a big way for forex demand: Prithvi Exchange MD

Unlike earlier times, forex demand is not just concentrated around large metros or traditional business travel, says Pavan Kumar Kavad, MD, Prithvi Exchange

What key trends or changes in India’s foreign exchange and cross-border payments landscape are you observing?

India’s foreign exchange industry is becoming broader, more digital, and increasingly integrated with the country’s global economic participation. Unlike earlier times, forex demand is not just concentrated around large metros or traditional business travel. There’s robust demand from leisure travelers, overseas students, migrants, families, and businesses engaged in international trade.

The biggest shift taking place in the industry is the emergence of Tier-2 and Tier-3 cities as important sources of outbound travel and forex demand. At the same time, customers are becoming more aware, and comparing rates, charges, and service convenience before initiating transactions.

Currency volatility is another important factor. Constant movements in the rupee, crude prices, global interest rates, and geopolitical developments are influencing how customers plan their foreign exchange requirements.

The industry is therefore moving beyond simply providing currency towards offering faster, more transparent and technology-enabled cross-border financial services tailored to different customer needs.

How has the profile of India’s forex consumer evolved in recent years, particularly with the rise in international travel, overseas education, migration and global business?

The Indian forex consumer has become more diverse than ever before. International travel is no longer witnessing demand only by affluent metro consumers, but also by families, young professionals, and first-time international travelers from Tier-2 and Tier-3 cities.

The purpose of forex has also evolved and broadened. Although leisure travel continues to be important, but overseas education, migration, family maintenance, medical travel, and international business are opening-up recurring foreign-currency requirements. Consumers are also turning more value-conscious. With increasing access to digital services, expectations around speed, transparency and ease of transactions have surged.

For the industry, this means there is no longer a single “forex customer”. A student making a large tuition payment has very different requirements from a family travelling abroad or an SME making regular international payments. We are therefore needed to offer more personalized products, technology, and guidance.

With currency markets becoming increasingly sensitive to crude prices, interest rates, geopolitical developments, and global trade, how are Indian consumers and businesses adapting their approach to forex management?

With the rupee facing pressure from factors such as crude prices, geopolitical developments, and global interest-rate expectations, consumers have become more conscious about when and how they purchase foreign currency.

For travelers and students with larger or predictable requirements, bifurcating currency purchases in a phased manner would offer greater flexibility as compared to converting the entire amount at one time.

As for businesses, especially the ones with recurring international payments or receivables, a significant amount of attention is now getting invested towards cash-flow planning, payment timing, and appropriate hedging mechanisms.

The bigger shift is towards advance planning. Currency fluctuations are difficult to predict consistently, so the objective should not be to perfectly time the market. It should be to understand the requirement, assess the potential exposure and choose an appropriate strategy that provides greater certainty around the eventual cost.

What are some of the most common mistakes you see travelers, students, and businesses make when planning their foreign exchange requirements? How can they make more informed currency decisions?

One of the most common mistakes travelers, students, and businesses make is considering forex at the last minute. As a result, this restricts their flexibility and leaves them exposed to changing market conditions.

I would recommend travellers to estimate their total expenses, which includes accommodation, transportation, meals, shopping, and contingencies, rather than only the cash they need. They should also compare the overall transaction cost instead of focusing only on the headline exchange rate.

Students and families making large education or maintenance payments should plan around known fee and payment deadlines wherever possible.

For businesses, the biggest mistake is often treating foreign exchange as a purely transactional activity. Companies with recurring international payments or receipts should understand their currency exposure well in advance and have an appropriate risk-management strategy in place.

And as a thumb-rule, customers should always seek clarity on the applicable rate, charges, taxes, documentation, and final amount received or payable. This can help reduce avoidable forex costs.

How is technology changing the way customers access and manage foreign exchange? Do you see the future of forex moving towards a more digital, transparent and personalized experience?

Technology has transformed the way customers access forex services. What used to be traditionally a branch-led and transaction-focused experience has now becomemajorly digital. Today’s customers arewell-informed and keep a close watch on the exchange rates, initiate transactions, complete documentation, make payments, and track orders online.

As far as the next phase is concerned, it is not just going to be about going beyond digitising existing processes, rather, enabling more personalised experiences based on the customer’s purpose, whether travel, education, migration or business payments.

The future, therefore, is likely to be a combination of digital convenience and human support. Technology will enhance the service by making routine transactions faster and more transparent, and expert assistance will remain available when customers need help navigating more complex cross-border requirements.

Trust and transparency are particularly important in financial services, where customers often have limited visibility into exchange rates, spreads and charges. What do you believe will define customer trust in the forex industry going forward?

The only way to gain and retain customer trust in financial services is by offering transparency, maintaining regulatory discipline, and providing responsible advice. Furthermore, it is important for providers like us to offer clear visibility into exchange rates, margins, fees, taxes, and the final amount they receive or pay, without hidden costs. Strong KYC, data security, and compliance with RBI regulations are not optional but necessary.

What is Prithvi Exchange’s vision for the next phase of India’s forex ecosystem, and how do you see the company evolving alongside the country’s growing global ambitions?

At Prithvi Exchange, our vision is to make foreign exchange and remittances abroad services more accessible, reliable, and customer-centric in a technology led cross border financial ecosystem. The opening of our new branches across the country and expanded regulatory capabilities, including the addition of scope to our business-like trade payments, family maintenance etc. will unlock a new horizon for us.

Ultimately, our goal is not simply to grow transaction volumes. It is to be a trusted agency that can support Indian consumers and businesses as they increasingly participate in the global economy, with transparency, regulatory discipline, technology, and dependable service at the core.