DUBAI: UAE Exchange Group, a global remittance and foreign exchange business, aims to spend between $250 million and $300 million on acquisitions to build its global market share, its chief executive said.

The group aims to increase its share of the $575 billion global remittance industry to more than 10 per cent by 2020, from 6.75 per cent currently, Promoth Manghat said.

“The group is exploring multiple bolt-on acquisition opportunities as well as strategic investments in remittances and payments space with a specific focus on fintech (and) digital,” Manghat said.

Exchange houses and other traditional payment processors such as banks are facing a challenge from fintech companies, which can increasingly transfer payments at more competitive rates.

UAE Exchange’s majority shareholders bought Travelex in January 2015 for 800 million pounds ($1.1 billion).

Manghat said UAE Exchange was working with unidentified boutique firms and banks to advise it on two to three potential acquisitions in 2017.

Global remittances to developing countries fell for a second year in a row in 2016 to $429 billion, a trend not seen in three decades, according to World Bank data, due in part to low oil prices and weak economic growth in the Gulf and Russia taking a toll on remittances to Asia.

UAE Exchange saw around 8 per cent growth in outflows from the United Arab Emirates in the first quarter of 2017, and full year growth is likely to be stronger than in 2016, said Manghat.

Growth was driven by its largest markets — India, Pakistan, Bangladesh and Philippines, he said.

In addition to tepid economic growth, the region’s exchange houses have been battling against moves by some banks to close their accounts, usually citing compliance concerns.

“De-risking continues to be a challenge for the industry,” Manghat said. “Banks are an important link in the chain and we can’t cash money or intermediate payments without them.” Mounting compliance and administration costs prompted major UAE exchange houses to raise fees for remitting money last month.

UAE Exchange raised its pricing in the range of 5 to 7 per cent, said Manghat, adding that industry remittance costs for the UAE were still lower than the global average.