Guide to International Money Transfers in the UAE

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The population in the UAE has an increasing expatriate orientation. It is estimated that nearly 90% of the whole UAE population is comprised of expatriates. While migrants from South Asian countries are migrating to the UAE in search of creation of opportunities, residents in the UAE are also moving abroad to expand their businesses or to seek employment with prestigious multinational corporations. This necessitates a lot of money movement through bank account transfers. This can be accomplished through a variety of professional services accessible through banks and other financial institutions. As a customer, you ought to take care that these transactions are conducted through legal channels only, considering there are several illegal or fraud entities that are operating in this domain.

With the changes in the international economy in the post Covid world, the flows of remittances are also set to change accordingly. According to market watchdogs, consumer behaviour is set to change across the Middle Eastern and North African region, with consumers preferring the convenience and security of digital channels that are encrypted through technological expertise, as compared to traditional forms of money transfer such as cash, or money orders etc. 

Some of the main options that are available in the market for international money transfers are as mentioned below: 

1. Lulu Exchange

The Lulu Money app was launched in 2007, and it has been able to reach over 6 lakh customers. A website is also being developed in order to supplement the app. Lulu Money gives you the option of performing transfers instantly across borders. The limit that is imposed by Lulu on the amount that can be transferred is around AED 75,000 overall and AED 5000 daily. Transfer to bank accounts and cash pickup features are available on this app.

2. Western Union

This is part of the app that spans across 40 countries. Customers can make use of various interconnected features across the website, app, or even at centres of Western Union. For instance, if a transaction has been initiated on the website, it may be completed through an agent or through a Western Union centre if the situation so requires. Digital services are a rapidly increasing component of the market share of Western Union international facility. The limit that has been set on the app or the website is around AED 34890. 

The Global Payout network provides for bank account and wallets across its network of over 100 countries. Receipt of money by the person will usually be allowed free of charge, unless they ask for special allowances such as conversion of the transferred amount into the domestic currency, or if they wish to transfer it into a different bank account and so on.

3. Mashreq Bank

The Mashreq Bank provides for a useful app, using which an individual can transfer money to local or international banks. Quick Remit is a very useful feature that allows the user to remit instantaneously across 37 countries. The Quick Remit facility is especially useful if one is transferring the amount in a small lump sum, as compared to a more substantial amount. In this case, the remittance shall take instantly to anywhere across the 34 countries that have been listed.  The fee that will be charged may vary up to AED 25 for each transaction. 

4. Al Fardan Exchange

The AL Fardan Exchange is a good option since it has a near universal presence across 200 countries. The charges for availing this facility start from AED 15. As per the regulations of the Central Bank of the UAE, the limit of AED 34890 shall apply on all transactions that take place.  

How to deal with the broker

In case the candidate is an expatriate, they have the option to choose from the following currency transfers, when making international money transfers out of the UAE: 

  • OFX
  • Saxo Bank
  • ADSS
  • IronFX
  • World First

Dedicated currency brokers are increasingly offering an advanced array of transfer options to compete with traditional options for international money transfer. The benefits that apply, in case one goes with them includes options for free transfers, better exchange rates at which money can be transferred, a 24/7 support helpline in case of transfer complications, and online support tools that are technologically supported, and the ability to set your own exchange rate.

After the currency broker has been decided upon, the applicant needs to open their bank account. The required documents may be submitted, such as copies of the residence proof, and the passport. Once the client has zeroed down on their preferred exchange rate, they may lock in the transfer conversion rate, and send the money to the foreign exchange currency broker. They will ensure that the transferred amount is sent to the bank account of the stated recipient within the next few days.

Wire Transfers

A substantial proportion of the expatriates in the UAE resort to making wire transfer in case they wish to transfer money to their relatives or colleagues in other countries. There is a total of 125 money exchanges operating in the UAE, which are in turn empowered through the SWIFT banking network, also known as the Society for Worldwide Interbank Financial Telecommunication. Companies such as Al Fardan Exchange, Al Rostamani Exchange etc offer good deals for making remittance through wire transfer. The wire transfer can be done through provision of a Money Transfer Control Number, along with the regular documents, such as Emirates ID, passport and so on.

Transmissions through mobile or internet banking

In case the client wishes to make the transfer quickly from their mobile device, they may do so using mobile banking in the United Arab Emirates. This can be done by logging in to the app provided by the international bank, and then activating the internet banking account. In case it is the first time that the application is being used, a bank official may contact the client to make the process smooth. The recipient’s details should be kept handy, such as bank name, branch address and account number, applicable IBAN codes etc.

Factors to consider when making an international remittance

There are certain considerations that you need to keep in mind, while making an international remittance to a family member or a colleague. They are discussed as follows:

Costs

There is a certain processing fee which is involved in the international remittance which takes place for the different companies. This may either be charged in the form of a fee up front, which is specified by the bank or the non-banking financial institution on its own; or the inter-bank rate may be charged. It makes sense to have an idea of the various rates offered by different banks in order to bag the best deal for yourself.

Exchange Rates

International remittances are conducted according to the prevailing currency rates of the two countries, in whose currency the transaction is involved. Hence, the conversion rate is subject to fluctuations in the market economy. The conversion rate will depend on how the bank or the selected institution handles the fluctuations - whether they have a consistent policy rate or whether they have mentioned that the remittance amount will be subject to market risks. The usual practice is that banks tend to go by their own rates that have been set in advance, irrespective of what may be the prevailing exchange rate, whereas forex brokers tend to use the interbank rate. It is also possible that the client makes some savings on their exchanges in the process of making the remittance, with proper knowledge of the rates prevailing in the market. It is often the case that banks quote the interbank rate, and then add cesses or charges to add to their margins. It makes sense to have a clear picture of the remittance costs beforehand.

Pickup method

The recipient is usually set to receive the remittance in the form of a delivery in their bank account that has been mentioned with the transferring agency. However, some banks also offer the feature of a cash delivery.

The time of transfer

The timing at which the transfer is being made can make a difference. For instance, if it is around a festival or an international event or a bank holiday, there may be an additional charge that may have to be borne. It may require some foresight to avoid making transfers on such days or time of the year. Similarly, if the requirement of the transfer is urgent or pressing, the customer may be forced to go for an option that is relatively more expensive or places stricter conditions. 

Conclusion

If the customer has the knowledge of the transfer requirement, they may be able to choose an option that is cheaper and with better facilities. With a myriad range of options, customers are free to opt for an exchange platform of their liking. However, they are expected to make sure that the money transfer through bank accounts and financial institutions is conducted through legal channels only.

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