Today's Edition
HOSAM ELDIN MUSTAFA (ABU DHABI)
The individual remittance sector in the UAE grew by nearly five percent during the first half of this year compared to the same period in 2023, according to Mohammed Ali Al Ansari, Chairman of the Foreign Exchange and Remittance Group (FERG) in the UAE.
Digital transfers increased by 20 percent due to the rising demand for digital channels.
Remittances to Egypt saw a notable 40 percent increase during this period due to recent changes in the Egyptian pound’s exchange rate.
Egypt remains a key destination for remittances from the UAE, ranking fifth after India, the Philippines, Pakistan, and Bangladesh.
The volume of remittances from the UAE exceeds Dh165.15 billion annually, with 45 percent being digital, according to Central Bank data.
Exchange companies account for 30 percent of remittances, while banks handle the remaining 70 percent.
Banking sector transfers, via the UAE Funds Transfer System (UAEFTS), totalled Dh4.527 trillion from January to March, a 16.2 percent increase from Dh3.896 trillion during the same period in 2023.
Al Ansari noted that the currency exchange sector grew by only 5 percent in the first half of the year despite significant tourism activity.
This limited growth is attributed to the increasing preference among travellers for prepaid cards over cash.
The sector is expected to see greater growth in the second half of the year due to increased tourism and travel by residents.
The UAE welcomed 25.3 million international tourists staying in hotels last year, a 28.5 percent increase.
The World Travel and Tourism Council expects this number to rise to 29.2 million this year, a 15.5 percent increase.
Regarding the increase in money transfer fees, Al Ansari stated that this is the first fee adjustment in five years.
The increase meets local and global regulatory requirements, rising costs and wages, and Emiratisation demands.
Exchange companies have received approvals to implement an optional fee increase of no less than 15 percent, equivalent to only Dh2.5.
This increase applies only to branch transactions, while fees for transfers through digital applications remain unchanged or may even be reduced due to the reliance on digital services.
The fee increase targets specific destinations to ensure the continued competitiveness of exchange companies and affordability for customers.
According to the latest World Bank reports, the global average cost of sending $200 is 6.2 percent.
In the UAE, the average cost is around 3.5 percent, significantly lower than the global average, aiming to eliminate remittance corridors with costs higher than five percent by 2030.
