UAE residents may soon have to pay more for remittances sent overseas.
According to the Foreign Exchange and Remittance Group (FERG), exchange houses under the jurisdiction of UAE authorities have received approval to implement an optional strategic fee adjustment, allowing for a minimum increase of 15 percent. This would typically equate to AED2.50.
The move marks the first fee adjustment in five years.
Cost of remittances
The average remittance cost of sending $200 equivalent is likely to remain at less than 3.5 percent despite the fee increase. This is significantly below the global average, which stood at 6.2 percent during 2023, according to the World Bank’s Remittance Prices Worldwide database.
Read: Interview with Hasan Fardan Al Fardan, CEO of Al Fardan Exchange
Balancing act
The fee increase may be applicable for remittances via physical branches, while transfers via mobile apps may see no change. Additionally, there’s a possibility that cost of remittance online may drop to maintain digital competitiveness.
The approval for a fee increase follows a detailed evaluation of the expenses associated with maintaining optimum levels of service standards and complying with regulatory requirements. The decision aims to strike a balance, ensuring that exchange houses remain competitive while addressing the increased costs.
Mohammad A. Al Ansari, chairman of FERG, said: ” I commend this decision to allow exchange houses a fee adjustment, highlighting the significance of adapting to the industry’s changing dynamics. This move ensures that exchange houses can sustain the delivery of high-quality services while addressing the changing regulatory requirements and associated operational costs, all of which were maintained without fee increases for the past five years.”
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