Skip to content Skip to Search
Skip navigation

UAE remittance market nears ‘saturation point’

UAE remittance firm Al Ansari Al Ansari
Al Ansari launched an IPO last month and plans to expand
  • Remittance firms in Emirates likely to consolidate or ‘get amalgamated’
  • Bricks-and-mortar model is important for UAE market
  • 76% of consumers expect to remit more money in next year

The remittance and foreign exchange market in the UAE is “saturated” and will need consolidation as new businesses continue to emerge.

“Either people will have to grow digitally [at scale] to capture market share or they’ll get amalgamated,” said Zahir Moghal, CEO of Abu Dhabi currency provider Delma Exchange.

“It’s totally saturated. It’s completely over-supplied and, on top of that, you’ve got so many new players that have come in.”

Remittance activity is driven by the UAE’s large population of expatriate workers, particularly from Asia and Africa.

Transfers from the Emirates are set to increase: 76 percent of consumers that send money home say they will need to transfer more in the next 12 months, according to Western Union.

The US giant signed a deal with Delma Exchange in April, under which all six of the Abu Dhabi company’s stores will be rebranded.

Moghal said the plan was to have 25 stores open by the end of next year and 50 by the end of 2025.

“I don’t think the UAE is ever going to get away from a bricks-and-mortar model because it serves a particular demographic,” he said.

Al Ansari Financial Services in Dubai has also revealed plans to expand.

Off the back of its listing on the Dubai Financial Market last month, the company is to open 15 exchanges across the UAE by the end of this year.

These will be in Abu Dhabi, Dubai, Sharjah and other cities in the Northern Emirates and will take the total number of physical outlets to 246, the company said.

Al Ansari raised AED773 million ($210.5 million) from its IPO. It plans to have 300 branches within the next five years.

Merger activity has risen across the region in the first three months of the year. EY’s Mena Insights report, published last week, reported a 42 percent increase in the number of mergers and acquisitions in Q1 compared with the same period last year.

It also showed that 165 deals worth $25.8 billion took place in Q1, building on a buoyant 2022 when investment banking fees were generated to the value of $1.6 billion.

Fintech, the use of technology to deliver financial services and products to consumers, remains a preferred destination for venture capital funding across the region, according to figures from Wamda in its monthly report for May. 

“I think you’ve got to look at [fintech firms] as friends,” Moghal said.

“Fintech is a buzzword. Things aren’t as seamless as you think. You still need people to make sure things are done properly. There has to be some involvement of human beings.”