Remittance costs through UAE exchange houses to see 15% hike
UAE exchange houses to have option on raising remittance fees
Dubai: Remittance fees through UAE based exchange houses could see a 15 per cent increase.
The industry grouping - Foreign Exchange and Remittance Group (FERG) - said all exchange houses under the jurisdiction of UAE authorities have received approval to implement an 'optional' strategic fee adjustment.
This allows for a 'minimum increase' of 15 per cent which would equate to Dh2.50.
"This marks the first fee adjustment in five years, the decision recognises the evolving regulatory landscape and related cost increases since the previous update," said a FERG statement.
Only at physical branches
The fee hike will only be there on funds sent through at physical branches. Already, apps provided by currency houses, those operated by banks, and the likes of e& money and Botim already account for a significant share of the remitances. Clearly, the 15 per cent hike will prompt more senders to do so via the app.
I commend this decision to allow exchange houses a fee adjustment, highlighting the significance of adapting to the industry's changing dynamics.
Exchange house sources say that the hikes have to do with inflationary pulls, a bit of standardising fee structures across markets, etc.
This is 'significantly below' the global average which stood at 6.2% during 2023 according to the World Bank’s Remittance Prices Worldwide database.
"The revised pricing remains well within the United Nation’s Sustainable Developmental Goals which aims to eliminate remittance corridors with costs higher than 5% by 2030," said FERG in the statement.
Reduced fees?
In fact, remittances offered via apps of exchange houses will 'most likely remain unchanged' or 'even reduced to maintain competitiveness digitally'.
"FERG played a pivotal role in carrying out extensive market research and coordinating with the regulatory bodies to facilitate for this crucial initiative," the statement added.
"I commend this decision to allow exchange houses a fee adjustment, highlighting the significance of adapting to the industry's changing dynamics," said Mohammad Al Ansari, Chairman of FERG.
"This move ensures that exchange houses can sustain the delivery of high-quality services while addressing the changing regulatory requirements and associated operational costs, all of which were maintained without fee increases for the past five years.”