International Money Transfer Challenges for UAE
UAE has rapidly developed itself as a major business hub and as a place with amazing employment opportunities. As a result, the market for international money transfers in the UAE is extremely well established. Banks, exchange houses, and digital transfer services, as well as more informal – and illegal – routes, all operate within the country. These banks and exchange houses offer their services to business and private investors as well as people working in UAE. Around 60 Billion Dirham are annually sent out by the people working in UAE but it was reported that each individual can accumulate about thousands in transfer costs.
It is similar for all businesses, private investors, and expats. Most people have to give away a huge sum of money as a transfer cost. The expense of transfer cost depends on the location and magnitude of the transactions but they are never economical.
The foreigners doing business with the UAE face similar inconveniences. Especially for businesses transferring money from the USA to UAE as a lot of banks in their country do not offer the service and they have to use an intermediary bank which racks up the cost. The process is expensive and complicated as well.
The United States makes it even harder for forex brokers to assist you as the laws are extremely strict for forex brokerage firms. For these reasons, a number of them operate in the country and are licensed only in a handful of states.
The conditions are not as dire in the UK compared to the US when transferring money from the UK to UAE. A lot of international money transfer service providers operate in the country that offers improved rates compared to the banks. Anyhow, customers are reluctant to trust these companies and persist when it comes to using banks that charge high transfer fees and offer awful exchange rates.
It should be noted that the UAE Dirham’s currency conversion rate is always poor since banks consider it an exotic currency. As a result, it has a significant FX margin.
How to Reduce the Cost of Money Transfer to and from the UAE?
Using the services of an international money transfer business to tackle the problem of expensive money transfers to or from the UAE is a simple solution. These businesses provide online platforms that facilitate simple and inexpensive transactions that may be done in a matter of minutes. Depending on the supplier, the speed and cost of these transactions will vary substantially.
Currency brokers and international money transfer providers are commonly confused. They do not, however, permit derivatives speculation. Instead, they carry out large-scale currency exchanges. They can provide inexpensive exchange rates because of the enormous volumes and low expenses of operating online-based platforms. Transferring money from the UAE to another country, for example, will cost you at least 5%. These expenses can be reduced to less than 1% if you use an international money transfer firm.
However, you must keep in mind that this is a relatively young industry that is not yet well-regulated. As a result, you must select a company with caution. TorFX, Moneycorp, Currencies Direct, and OFX are the current market leaders. Each of these businesses is trustworthy and provides low-cost international money transfer services. However, their conditions and supplementary services are vastly varied. If you need to transfer money from the United Kingdom to the United Arab Emirates, for example, TorFX is the ideal option, regardless of whether you are a corporate or private client. OFX, on the other hand, focuses on foreign merchants’ corporate services and multi-currency accounts.
In order to come to the best conclusion possible, the first step is understanding your own business requirements and then finding a solution that matches your requirements.
