UAE consumers get zero fixed fees, salary advances on remittances
UAE remittance operators push for lowest cost to users when sending funds
Dubai: The battle for market share in the UAE remittance market is getting more intense as consumers turn ever more finicky about the cost of spending money to their home country or anywhere else.
More remittance service providers are offering 0% fees on transfers for extended promotion periods, even as fintechs are upping their game in getting new customers to sign up with them.
Careem Pay has done just that.
“Sending money abroad through traditional remittance providers can be expensive due to the mix of high fixed fees per transaction plus transfer rates,” said Mohammad El Saadi, Vice-President of Careem Pay.
“We’ve removed fixed fees for Careem Plus members and offering member-only exchange rates to ensure that you save more with every transfer.”
Careem Pay members, the company says, ‘save an average of Dh300 per month, and can now boost their savings by hundreds of dirhams with the new international transfers benefit’.
The new remittance benefit allows members to save even more while supporting their families or managing their expenses and investments abroad
As anyone in the industry knows, if consumers sign up for a membership program, chances are they will stick to using that channel when it comes to sending money. “Botim, e& money and Careem Pay are revising the rules of the remittance game in the UAE,” said a senior official with a leading exchange house.
“Legacy remittance service providers need to be nimble in meeting these challenges. The UAE’s market share in the remittance sector is extremely fluid.”
'Save on every dirham sent'
The mood among UAE consumers sending funds abroad is also a factor. Many of them, whether they are an expat from India or the Philippines, are intent on saving every dirham as they make full use of their currencies' slide against the dollar. If it means sending money at zero or lowest rates in the market, then they will search for that deal - and use it.
Salary advance
Recently, Al Ansari Exchange introduced a ‘send now pay later’ option and even a salary advance feature for some of their clients. Other leading FX exchange houses confirmed that they are consider similar or other incentives targeted at cost-conscious customers.
UAE’s currency exchange houses still have significant traffic – whether it’s walk-in customers or corporate clients. Plus, there’s the increased business generated through tourists. What would work best in the currency business is a hybrid model of online and brick-and-mortar store, as these give customers an ease of mind while doing online transactions as well ~ Antony Jos of Joyalukkas Exchange
“When some of the biggest digital competitors are offering zero or low transaction fees, brick-and-mortar exchange outlets cannot ignore that,” said an industry source. “Within 2-3 years, a significant portion of UAE’s remittances to other markets will be through digital channels.
“Legacy FX players need to be part of the conversation when that happens.”
In its new offer, Careem Pay is allowing first-time users to ‘enjoy rates that are better than the Google rate for international transfers to India and Pakistan’.
“Careem Pay facilitates near-instant transfers from the UAE to India, Pakistan, the Philippines, the UK, Europe, and Lebanon, with more to come,” said a statement. “Customers can send up to Dh450,000 a month and Dh150,000 per transaction through Careem Pay. Transfers are often completed in a matter of minutes - with the fastest transfer in 2024 facilitated in just 11 seconds.”
A new Visa report found that UAE residents are frequenting brick-and-mortar currency exchange houses less when sending money overseas. It's part of the changes in spending and usage habits in the wider cash vs. digital debate.
The biggest switch from turning up at exchange houses to digital in sending money happened during the Covid months. But early last year, currency exchange houses in the UAE went in for a 15% remittance fee hike on transactions done through branches.
"This was another major prompt for people to send money using digital platforms at lower or zero fees," said an official with a currency house. "Any benefit that's available, consumers are switching to that platform or channel.
"The belief among consumers is that remittance fees need to come down."
