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 &
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