Money transfers: UAE expats get fee cuts as currencies drop against dollar

Dubai: UAE expats sending monthly remittances should not just be looking at how their currencies are faring against the dirham – keep an eye on whether there are any deals available on remittances fees.

Because towards the end of each month, UAE currency exchange houses, banks and remittance platforms are offering discounts on fees, and in some cases even allowing for zero fee transfer.

Which is why UAE expats sending funds overseas are increasingly looking to a handful of choices each time rather than sticking with any one service provider.

This weekend, for instance, with the Indian rupee dropping to 23.56 to a dirham, some online remittance platforms were offering 23.54/23.56 while banks had their exchange rates at 23.36-23.4. Other popular remittance service providers slashed fees to get new customers or retain them.

With more remittances being done digitally, ‘UAE expats have multiple remittance options on their phones’, said an industry source. “It’s the same situation like in food order and delivery platforms or web streaming channels – users typically have two or three choices.   

“When it comes to remittances, UAE expats will obviously have their banking app and then another 2-3 options. We are finding whoever offers the lowest fees are favoured and there is no loyalty to any particular remittance app or platform.”

What are the fees on overseas money transfers

· UAE banks typically charge Dh17 to Dh25.

· Currency exchange houses charge Dh15 to Dh20.

· Digital remittance platforms have fees of Dh5 to Dh10.

But with each new digital platform launching in the UAE market, there are frequent ‘zero-fee’ deals too. But mostly on 'limited time' basis.

The dollar has been gaining against major currencies in recent days, creating one of the more favourable phases for UAE and Gulf expats on exchange rates to the dirham.  

But it needn’t always be about zero fees.

Raheel Ahmed is CEO of RAKBank, which is now one of the bigger names in the UAE remittance space when it comes to fund transfers through banks.

“I can’t talk about other banks – but as RAKBank, we are competitive from two perspective on remittances,” said Ahmed.

“One, we are competitive on the fees we charge for remittance and how we price it across all geographies.
“The second is the conversion rate on the foreign exchange. Someone can give you zero remittance fees and then put a 5% margin on conversion rate between the dirham and Indian rupee, for example.

“As a mainstream bank, if I have your salary account, I need to make sure I cater to all your domestic and international payments. We call our remittance services part of everyday banking. We don't want them to, you know, use 10 different vehicles to be doing all those different transactions.”