Dubai: Moneygram, which has a partnership with First Abu Dhabi Bank, is talking to a number of banks in the UAE to expand its operations as the region continues to outpace global growth, its top executives told Gulf News.
The company is currently present in 200 countries and has seen an acceleration of growth in the GCC region after the company took a hit due to compliance changes and adoption of technology last year, resulting in a total cost of $100 million. About 55 per cent of the company’s business come from non-US countries.
“The GCC will continue to outpace the mid-single digit growth that is seen worldwide. This is a very strong region and would continue to outpace the growth,” Alex Holmes, chief executive officer at Moneygram, told Gulf News.
In 2018, outward remittances from the UAE were placed at Dh169.2 billion in 2018, and a large chunk went to India, accounting to 38 per cent of the total outflows, according to the UAE Central Bank. India received a total of $79 billion in remittances followed by China, Mexico and Philippines, which received $67 billion, $36 billion and $34 billion respectively.
“The GCC is an extremely unique market as 89 per cent of the population is foreign workers. UAE is arguably is the third-biggest send market in the world and Saudi Arabia is number two. About 50 per cent of the population is expatriate. From the Gulf region, there is growth. From the receive side, India, Pakistan, Bangaldesh are big receive markets. This is a critical area for growth and a critical area for positioning our brand,” he added.
The company also changed its strategy to upgrade technology, systems and platforms. “We are trying to digitise the consumer experience in different ways. A lot of those initiatives has gone into that space and we are seeing positive returns from those investments,” Holmes said.
However, according to Grant Lines, chief revenue officer of the company, revenues are not increasing as much as the volume. “Markets are very competitive globally in terms of price perspective. It depends on scale of distribution. Volumes are increasing. It is more volume related than revenue related,” Lines added.
“One of the benefit we have is the scale being present in 200 countries. We are present in 6-7 core corridors and they are commoditised. We send money to 170 countries from the UAE. Pricing tends to be different depending on the corridor of supply and demand and the scale of distribution the economics and the availability of the currency,” Lines said.
Changing migration dynamics due to a clampdown on migration from Mexico to the United States or from the European Union to the UK due to Brexit is also triggering a change in the way Moneygram is strategising. “The US and the UK are very challenging right now. UK is suffering from Brexit. The health care industry is dominated by Eastern Europeans and that might get hit due to Brexit,” Holmes said.