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Finding out the best remittance options from the UAE

Although there are a lot of methods to send money overseas, the most convenient way these days is through a money transfer outfit.

Image Credit:Arshad Ali/Gulf News
The various nationalities are seen sending the money to their home abroad at UAE Exchange Centre at Satwa in Dubai.
Gulf News

Dubai: Although there are a lot of methods to send money overseas, the most convenient way these days is through a money transfer outfit.

Every payday, expats in Dubai queue up behind the counters of Western Union, UAE Exchange or Al Ansari Exchange or other similar exchanges to send their hard-earned money to families back home.

To find out which companies offer the best deals in town, my colleague and I went under cover and combed some specialist money transfer outlets in Dubai last Monday.

After we buttonholed the counter staff of two exchange houses, one express money transfer company and two banks for two hours, we quickly learned a few "tricks of the trade" that perhaps many remittance-savvy expats are aware of.

We realised that besides keeping track of the exchange rates when sending money you have to find other hidden costs. Transfer companies charge you for every transaction, and the rates could vary from one outlet to another, and according to the amount being sent out. There are hidden fees, which some outlets refer to as "back-end charges", to look for as well.

All these numbers - exchange rates, transfer charges and back-end fees - will determine how much money will be actually received by your family out of the Dh1,000 or Dh2,000 you hand over to your favourite exchange house every month.

In terms of transaction costs, the UAE Exchange appears to have competitive rates, as it charges only Dh15 if you transfer any amount to a bank in the Philippines and India, and Dh45 to Dh50 if you transfer cash to a bank in Europe and the UK.

At Al Ansari, Filipino and Indian expats sending any amount home will pay the same charge quoted by UAE Exchange. A similar transaction will cost a European or UK expat Dh10 to Dh15 more.

At Emirates NBD, whatever amount you transfer to a bank in any country will cost you Dh75, or as much as Dh60 more expensive than at UAE Exchange or Al Ansari. At HSBC, the charge goes up a notch, at Dh80.

The transfer charges at the four companies we surveyed apply to any amount and anyone can transfer as much money as he or she wants to any country, except probably to India, where certain banks may have some ceilings on cash transfers.

However, it takes about two or three working days before your money reaches its destination. So, if you want to send money within minutes, the best way is to go to an express money transfer outfit like Western Union.

There's one caveat, though. Express transfer rates are a bit more expensive. Western Union charges Dh35 if you send Dh1,000 to the Philippines, and Dh100 to both Europe and UK.

Charges also increase according to the amount of money being sent out to these countries and senders can only transfer up to Dh29,000. For India-bound cash, the charge is fixed at Dh15, but the maximum amount should only be up to 100,000 rupees.

So, it is generally cheaper to transfer your cash from the UAE to a bank overseas via Al Ansari and UAE Exchange. There's no limit to the amount you want to send out, but it requires a bit of patience, though, as the transmission time takes longer.

Another thing to watch out for are hidden charges that a receiving bank or money transfer outlet overseas will deduct from the money you've sent.

If you transfer cash to the Philippines via Al Ansari or UAE Exchange for instance, the receiving bank may charge a "back-end" fee of 100 pesos, or barely Dh10, upon collection.

If the money is sent through Western Union, a minimal 0.15 per cent government tax will be charged on the principal amount.

In terms of exchange rates, it was difficult to establish which company or bank offered the best deals. During our survey last Monday, the dirham-peso exchange rate at one exchange house fluctuated twice in 20 minutes. I later learned that currencies moved about five times that day.

"It is impossible to compare exchange houses unless you take the same currency pairing at exactly the same time in the day because the rates move so much," said Lisa O'Brien, chief executive officer of First Rate FX.

So, to get a fair comparison, I decided to give the exchange houses a call between 3:00pm and 3:30pm on Tuesday, during which the exchange rates at Al Ansari, UAE Exchange and Western Union were steady.

Western Union offered the highest dirham to peso exchange rate. However, if you factor in all the other fees - transfer cost and back-end charges- Al Ansari appeared to be the most competitive among the three outlets (see illustration above).

For instance, if I had transferred Dh1,000 to a bank in the Philippines via the exchange house at 3pm on Tuesday, the actual money to be collected would have been 12,266.033 pesos, which is 134.907 pesos or Dh10 higher than what I would have sent through Western Union (illustration on top).

"If you watch closely all the rates that are factored in when sending money, you will be able to get more out of your dirham when you transfer funds to a bank via an exchange house rather than send the money through an express transfer outlet," says one source at UAE Exchange.

How do you send money overseas? What's the biggest factor that influences your decision on what mode of transfer to use? Is it the money transfer charges? Security offered? Speed of transfer? The exchange rate? Tell us what you think.

Your comments

Al Ansari and UAE exchange are the most expensive. The rates depend on the locations. Mall branches are the most expensive. I found Sharjah rates better then Dubai
B C Dhawan
Posted: January 10, 2009, 14:27

I always transfer through Al Ansari as they always offer rates better than others.
Posted: January 10, 2009, 13:44

"CUrrency is our service" is the slogan of the UAE exchange and that is exactly how their service is, fast.
Veenadhar Shetty
Dubai,United Arab Emirates.
Posted: January 10, 2009, 12:36

Previously, I have been sending money through Al Ghurair Exchange when they still have the free of charge offer. However, when this offer was over, I started using Al Ansari exchange center where I can earn points with Air Miles.
Posted: January 10, 2009, 11:39

There are around 3 exchange offices down the street from where I live. Yesterday I found out that Al Rostamani exchange offers the best rates.
Posted: January 10, 2009, 11:33

I have tried various exchange houses, and found that when I send bigger amounts I get better rates.secondly UAE exchange gives me a feedback SMS that the money has been transfered to my account in India.
Posted: January 10, 2009, 11:25

I do send through various exchanges and dont find big differences in their service charges and exchange rates. The more the number of people are at the counter, the less the negotiation power is.
Baiju Murathankal Joseph
Posted: January 10, 2009, 11:14

There are many ways you can send your money. Sending through UAE exchange as draft is the cheapest way. Sending through post is the most economical way.I myself send through bank transfer using AEX card.
Lal Johns
Posted: January 10, 2009, 10:35