Global Market Research Reports : Ken Research: Middle East Remittance Market

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Monday, July 4, 2022

Growing digitalization and opening of the market to International Money Transfer Operators (MTO) will drive the growth of Saudi Arabia Remittance Industry at a CAGR of 2.8% during 2020-25: Ken Research

The Saudi Arabia Remittance market is anticipated to grow at a CAGR of 2.8% during the forecast period FY’20-FY’25.
Growth of digital payments solutions, along with rising fintech ecosystem are further expected to give a boost to numerous entities that facilitate online payments in the country.
Opening of the market to allow foreign MTOs will encourage entry of new players in the oligopolistic remittance market

Saudi Arabia is one of the most economically prosperous country in Asia and hence is a prominent emigration destination to a many South Asian countries. Of the current population of 33 Million, more than 37% of population comprises of expats with India, Pakistan, Nepal, Philippines, Bangladesh, Sri Lanka and Egypt being key source countries. This results in a high contribution of outbound remittance in the industry as the expats send money to their home country periodically.

Saudi Arabia International Remittance Market Future Outlook

Due to increased focus on hiring Saudi nationals at higher level posts, more and more people are looking to move from Saudi Arabia. This led to a decline in the remittance industry size by value. However post-COVID the scenario has reversed due to higher propensity to save. Until 2019, the foreign MTOs were not allowed to set up business independently. But based on G20 National Remittance Plan, Saudi Arabia has opened the markets for foreign MTOs which will boost the industry growth.

How is the competitive landscape in International Remittance Industry of Saudi Arabia?

The Saudi Arabian Remittance market is dominated by major 7-8 which are providing remittance services from a very long back. A very high amount of capital would be required to make any position in the oligopoly remittance market of Saudi Arabia. More than 95% of the remittance market is hold by 8 firms and the competition has been growing largely since the increase in penetration of digital channels. Entry of STC pay has gained a substantial market share since it begin their operations and all other banks are now focusing on strengthening their digital channels.

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In Saudi Arabia, foreign MTOs were not allowed to open their branches and providing remittance services independently in the Kingdom. Since 2019, the plan have been introduced but there are many rules and regulations which are to be followed for the foreign money exchanges. The paid up capital has not been standardized for the foreign players and it is to the discretion of Saudi Central Bank SAMA. This means that the entry barriers are high for the remittance industry in the Kingdom.

What is the future takeaway for industry players?

Given the backdrop of increase in volume and value of outbound international remittance transactions, analysts at Ken Research expect a growth of 4.5% during 2020-21 and CAGR of 2.8% during 2020-25F. During this period, value of transactions is expected to peak in 2025 which will be driven by the opening of the market for foreign MTOs and growing adoption of digital solutions. Analysts at Ken Research further expect that digitalization of services and corresponding marketing campaigns are expected to drive the revenue of remittance industry at a CAGR of 3.1% during 2020-25F

Key Topics Covered in the Report

· Market share of Exchange Houses Saudi Arabia

· Overview of International Remittance Industry in Saudi Arabia (Statistics on Corridor wise Transaction volume and value)

· Industry segmentation (By Type of Transfers, Corridor wise)

· Cross Comparison of Major players on Operational and Financial Parameters (December 2020)

· Company Profile of Major Players (Overview, Products and Services, USP, Business Strategies, Branch wise Operational Performance, Cumulative Financial Performance, Recent Developments)

· Growth Drivers and Challenges to Saudi Arabia International Remittance Industry

· Industry trends and developments

· Risk factors in the industry

· Rules and Regulations by Government Bodies

· Impact of COVID-19 and Future Outlook of Industry

Singapore International Remittance Market Outlook to 2023 - By Inbound & Outbound Remittance, By Banking and Non-Banking Channel, By Inflow & Outflow Remittance Corridors

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Thursday, December 9, 2021

International Remittance Industry in Qatar | Market share of Exchange Houses | Qatar Central Bank AML Guidelines | Future Outlook Remittance Qatar: Ken Research

Qatar – 88% of Population are Expatriates

Qatar is home 2.8 Million population with more than 88% of population comprising of expats with India, Nepal, Philippines, Bangladesh, Sri Lanka, Egypt and others being key source countries. In 2019, outward remittances were recorded at 6.5% of total GDP of country with India being the prominent corridor of outward remittance transactions. During the period of 2013-19, there has been a multi-fold growth in expat population of select countries, which have contributed immensely to the growth in international remittances of country.

During 2016-19, the International Remittance Industry in Qatar increased from QAR xx Mn to QAR xx Mn, growing at a CAGR of xx%. During 2019-20, industry size declined by xx% due to pandemic of COVID-19 and return of migrant workers to their home countries.

Given high employment of expat population, it is no doubt that outbound remittance flows contribute >95% to industry with India, Nepal and Philippines being the largest corridors.

Overview of Outbound Remittance Industry

Given the high cost of sending money back home, customers are generally incurring high transaction size to save on transaction fees again. In the past 4 years, industry has also witnessed a decline in average revenue per transaction owing to technological innovations, entry of vertical players and low-cost positioning of few exchange houses.

Correspondent banking networks remain the foremost choice of partnership of local exchange houses while for non-prominent corridors, exchange houses tie up with third party money operators and global MTOs to facilitate transactions. While, direct to account transfers are most commonly used, analysts at Ken Research expect a decline in cash pickup transfers due to focus on digitalized payments of countries across world.

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Competitive Landscape of Industry PLAYERS

The industry is dominated by exchange houses catering to the large chunk of blue collar workforce which are unable to open bank accounts in Qatar. As of June 2021, there were XX exchange houses in Qatar operating via a network of XX branches across Qatar.

It was interesting to note that there were no supernormal benefits of early starters in the industry and firms majorly compete on the basis of exchange rate offered coupled with level of quality services offered (same day credit, cash pickup service etc).

Cross-comparison Among top Exchange HouseS

Being a commodity-type industry with competitive prices being a pre-requisite, firms are generally aiming to drive volume of transactions via branches to adhere to financial and profitability goals of the exchange. It was analyzed that XX monthly outbound transactions would lead to a break-even at a branch level. Further, top 5 players contributed XX% market share to the industry size during June 2021.

The extent of partnerships with correspondent banks and third party money operators including Global MTOs also affect the choice of customer for selection of exchange house. For instance, Al Jazeera Exchange employs staff of IME Nepal within its branch to execute transactions of Nepal Corridor, Sewa Money Transfer (Nepal correspondent) has partnered with Eastern Exchange to facilitate transactions.

For More Information, refer to below link:-

Qatar Central Bank AML Guidelines | Future Outlook Remittance Qatar

Contact Us:-

Ken Research

Ankur Gupta, Head Marketing & Communications

support@kenresearch.com

+91-9015378249