Expats in the United Arab Emirates are moving away from the physical scale at their nearest currency exchange branch and are opting for an online platform to move cash home, basically due to movement restrictions caused by the pandemic. But does this resolution gain financial advantages for expats?
Research giant S
Remittances from the Middle East and North Africa, which basically come with cash sent home through the migrant staff of the six-member Gulf Rich Cooperation Council (GCC), are expected to fall by 19. 6% by 2020, according to the World Bank.
Remittances from the United Arab Emirates totaled $ 44. 4 billion (161 billion dirhams) in 2018, only the United States, Saudi Arabia ranked third with $ 33. 9 billion (124 billion dirhams), while Kuwait, Qatar and Oman were also at the high of 20. Remittances fell 15. 6% in March, according to recent highs from the central bank.
The short-term prospects for the remittance sector will continue to be questioned, according to Standard Chartered UAE analysis, and in the retail sector, the effect in the Middle East is largely due to declining wages and employment of migrant workers. they tend to be more vulnerable to job and salary losses during economic downturns.
This has led several exchange houses in the United Arab Emirates to focus on their classic retail branches to their online presence or expand their online operations, if they had a functional before, all to make their own virtual platforms more exciting to the average sender.
In addition, while switching to an online platform to send transfers is convenient and safer, this pandemic turns out to be a measure that also allows users to gain advantages from lower costs, with the merit of lowering prices for larger transactions, to the brick-and-mortar alternative.
In the United Arab Emirates, remittances will have to be made through banks or replacement offices, making it difficult for newcomers to the sector to marry established rivals.
High costs, inconveniences and wasd time are some of those related to cash transfers abroad. The United Arab Emirates has noticed greater attention to these disruptions with recent access by monetary generation corporations to the space of invoices and remittances.
Late last year, TRANSFERWise uk, an option that has recently become a popular choice among carriers, obtained a licence from Abu Dhabi Global Market, the emirate’s monetary flexibility zone. Industry analysts say TransferWise’s access to the region was good news for customers, as the resolution also allows local money generation corporations to benefit from this new progression by providing their own virtual or potentially partnering with TransferWise.
Local new companies such as Now Money and Denarii Cash are already disrupting the market. Now Money gives other non-bankers the ability to move cash through its app by allowing employers to deposit cash into an employee’s Now Money account. prepayment of $2. 50 (9. 2 Dh) for amounts greater than Dh 1,000, but no payments for reduced amounts.
The Denarii Cash app also provides additional services, such as paying expenses in the Philippines and earning cash at the exchange rate, but based on the average market price. with existing payment corporations approved through the CENTRAL Bank of the UAE.
To open a local bank account, citizens of the United Arab Emirates want to earn at least 5,000 dirhams according to the month, excluding thousands of employees and manual services. They regularly get their salaries on a prepaid card consisting of issuing only a loose coin withdrawal according to the month. , and regularly take those coins to a shopping mall where they can stop at multiple exchange offices to locate the maximum productive rate to move the maximum of their salary.
Some entities have created cell phone wallets to attract low-income clients and the exchange of home-moving apps can be permanent. Such programs generate greater loyalty from visitors, once the customer has satisfied the need for visitor wisdom to send cash through the application of a space exchange or cell wallet, they are much less likely to complete a similar procedure to log in with a competition provider.
MoneyGram is the provider of cash transfers for mobile wallets for First Abu Dhabi Bank, the largest bank in the United Arab Emirates through asset and telecommunications company Etisalat. While banks are also contemplating a share of remittance cake, having represented 34 billion dirhams out of the 165. 2 billion dirhams that left the United Arab Emirates last year, virtual remittances have become more focused.
Migration to virtual platforms accelerated the pandemic and experts expect down pressure on remittances to continue in the coming months. The Abu Dhabi Al Ansari Stock Exchange, which claims a market share of 31% of foreign exchange companies in the United Arab Emirates and has 190 branches across the country, remittances fall more than 10% in 2020 compared to the previous year.
However, the exchange reported that the number of consumers in the company’s virtual facilities to send cash had more than doubled, and its application now accounts for approximately 10% of remittances. Like his peers, Lulu Financial said he was seeing a steady recovery after an initial drop in revenue, aided basically through his luLu Money virtual offering.
In addition to the positives, virtual remittances provide demanding situations such as cyber risk, as well as higher rates and fees, in some cases. Some of the fees and fees, in addition to the corresponding bank fees, were considered inaccessible to many. Low-value transactions. While many cash movement corporations have emerged with less expensive solutions, they have limited virtual solutions.
The World Bank publishes comparisons of cash shipping prices on its online page with other strategies to “make markets more transparent”. Includes 12 destinations or “runners” from the United Arab Emirates, adding major recipients from India, Pakistan and the Philippines. .
For popular forex brokers in the Middle East and North America, such as uaE dirham in Indian rupees, rates are below the global average of 6. 8%. Sending $200 (734 Dh) from the United Arab Emirates to India charges an average of 3. 45. % in the quarter of the moment, according to the World Bank.
The same transaction from the United Arab Emirates to Pakistan charges 3. 94 per cent, while the other target markets are priced the same: the Philippines at 2. 67 per cent and Egypt at 3. 53 per cent. This quartet is the largest remittance market for the UAE.
A comparison of the prices of online and offline cash movements has shown that it is evidently less expensive to move cash online than to move to branches, especially when it comes to local banks, because rates are higher when bringing cash and exchange rates are relatively more up-to-date online. The resolution of online movements has also led to greater transparency in tariffs, as platforms now assess rates in advance rather than making a profit on the exchange rate.
Dear reader,
This segment is about life in the United Arab Emirates and the data you can’t live without.
Sign up to read and complete gulfnews. com