A remittance usually refers to the fund transfers which an expatriate does in order to send money to his/her country of origin either via wire, mail, or online transfer. Such peer-to-peer transfers of funds across the borders have proved to be economically notable for many countries across the globe. In UAE, the international remittances are generally carried out through exchange houses and banks.
UAE is regarded as a leading cosmopolitan hub in the world since it offers a wide range of job opportunities, ultimately being a major attraction for the job seekers especially in other South Asian countries. According to UAE Market Research Reports for Remittance, the population of this country has been witnessed to include a majority of expatriates and consequently, UAE has relished a rapid economic growth over the years, due to its strong labor force, mainly composed of expatriates.
UAE Remittance market functions via international as well as domestic remittances which are usually represented by: workers remittance outflow, business to business and personal remittances. The expatriates in this country have played a significant role over the years and thereby have reckoned to be amongst the key contributors to international remittance market, wherein the revenue trends have ameliorated at tremendous growth rates, if considered from 2011 to 2016. As per the UAE Remittance Industry Research Report, this industry has showcased a healthy growth till now majorly owing to optimistic factors like: booming number of expatriates in the country; amplifying infrastructure and developmental activities; and mushrooming business sectors. On a whole, the technological transition resulted in ‘electronic mode of transfer’ to supersede the market accounting for a major share in the workers remittance outflow. Thus, during 2016, direct credit to bank account along with the advent of online services well dominated this market.
It has been well investigated with the help of UAE Remittance Market Research Reports that the international remittance market has long been a highly competitive market where the exchange houses often compete on the basis of number of transactions, volume of transactions, number of branches, services offered and many other related factors. Furthermore, the exchange houses that are prominent in UAE at present include: UAE Exchange, Al Ansari Exchange, Al Fardan Exchange, and Sharaf Exchange.
On a proper scrutiny of the most recent trends given by UAE Remittance Industry Analysis, it has been observed that the launch of crypto-currencies such as Bitcoin and Ethereum is resulting in a huge impact on the remittance industry worldwide since these latest currencies possess the potential to engender decentralization of money issuing and financial services; ultimately creating a tech savvy industry that will go hand in hand with the upcoming technological innovations.
Taking the UAE in consideration, it has been discovered that these crypto-currencies lately need to come up with proper future planning that will aid in overcoming various hurdles such that they are able to successfully compete against banking and exchange house remittance offers since, even if these offers are expensive and inconvenient but they still offer some great advantages to the consumers, be it: the possibility to transfer to bank accounts, to m-wallets or to beneficiaries for cash pick-up. Therefore, the entrepreneurs addressing this market via crypto-currencies will have to overcome the road blocks including: financial inclusion, internet access and technological literacy; lack of awareness of user friendly ecosystem provided; liquidity issues; and lastly the AML and CFT controls (such that a reliable system is generated to detect money laundering and terrorism financing cases).
However, as per the UAE Remittance Industry Research Report, firms have been witnessed as replacing their current money remitters and as a result, the traditional way of carrying out remittances is being replaced by this new one which is less complicated, in real-time, less expensive, inclusive and user-friendly. Basically, the money remitters and exchange houses involved in this industry have the required assets, the market share, the know-how and the ecosystem built; but it has been analyzed that if re-engineering of their businesses does not take place in the years to come, they will lose the battle. Thus, the firms which are smart enough to realize the need for changes and do not hesitate in seeking advices are the ones which are expected to enjoy better chances towards a holistic progress.
Cumulatively, both the UAE remittance as well as bill payments market have witnessed a considerable growth in the recent past and are envisioned to grow at a decent CAGR by 2021. With context to the Future Insights for UAE Remittances Market, the overall market is projected to burgeon and register massive revenues in future owing to factors such as: amplifying employment opportunities due to infrastructure developmental activities linked to the World Expo to take place in 2020 in Dubai; expansion of airports and the Etihad rail, air and marine transport systems and road networks in the country; internal migration; development of non-oil private sector businesses, and surging utility prices.
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Ankur Gupta, Head Marketing & Communications