2024-08-10 18:02:53
Dubai: Hamdi Saad
“Smart” digital remittance apps outside the UAE have emerged as strong competitors to traditional exchange companies, fueled by the country’s ability as a global financial center that embraces the latest digital technologies based on communications networks, internet speeds and widespread dissemination .
Experts confirmed to Al-Khaleej that the market share of digital applications for remittances outside the UAE is increasing year by year compared to traditional remittance methods, and they expect the market to continue to grow in 2024, with a growth rate of up to 25%. Cross-border transfers are driven by innovation and customers’ increasing reliance on digital services.
Experts said: “The future of digital financial transfers in the UAE is promising, and customers who send money to their own countrymen and friends will benefit greatly due to the country’s strategic interest in innovation in the field of financial technology.” And its advanced regulatory system, digital financial transfers are expected to will become smoother, faster and more cost-effective, helping to improve the security, transparency and efficiency of financial transactions.
According to a PrepayNation report, the UAE and Saudi Arabia are the two countries with the largest remittances in the region, with remittances of US$3.96 and US$39.3 billion respectively in 2022, accounting for approximately 7% of the GDP of the two countries.
The global cross-border digital financial transfer market value is expected to reach US$339.87 billion in 2030, compared with US$148 billion in 2023, and is expected to achieve a compound annual growth rate of 12.58%.
There are many factors driving this trend, not the least of which are the increased use of mobile phones and portable smart devices and the need for convenient, fast and secure financial transfer services.
Ali Al-Najjar, Chief Operating Officer of Al Ansari Exchange, said: “Given the increasing pace of digital transformation in various sectors, there is an increasing need for faster and more efficient ways of cross-border remittances to meet the growing demand. With customer requirements , there is an increasing demand for digital applications for remittances, which are creating a major transformation in the world of financial transactions due to their efficiency and smoothness.
The growth in demand for these applications is due to a number of factors, most notably the ease of use of the software interface, the speed and convenience of completing transactions, and security and transparency features, in addition to the possibility of accessing these services. Their low cost and availability of various payment methods at any time and place are key factors in the growth of usage.
Al-Najjar added that the share of digital financial transfers outside the UAE has increased significantly in recent years, driven by the strong infrastructure provided by the UAE and a focus on ease and speed of completing transactions. On the other hand, the (COVID-19) pandemic has played a fundamental role in accelerating the demand for smart financial solutions, thereby enhancing the use of digital transfers.
Al-Najjar explained that the digital remittance market in the UAE is continuing to grow due to a number of factors, including advanced infrastructure and access to mobile phones and smart devices by a large portion of the population, in addition to the number of bank applications that enable financial transfers to be completed quickly.
Digital financial transfer rates are expected to rise by 2024, driven by a boom in the fintech industry, increasing reliance on non-cash payment methods and the country’s efforts to become at the forefront of the financial sector.
Al-Najjar stressed that the UAE continues to keep up with technological advancements in the field of digital financial transfers and that the country is an example of integrating digital technologies to speed up and simplify operations and increase the level of security and reliability sought by exchange companies. Innovate to transform operations to remain competitive in a changing financial environment.
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Abhishek Tripathi, senior product manager, Careem Pay, said: “Using digital apps to transfer money abroad has become an attractive option as it allows for quick, easy and secure transfers anytime and anywhere, plus customers can enjoy more savings compared to traditional methods. Quickly completing the mandatory KYC process, this makes digital financial applications more widespread in the UAE than traditional international transfer methods.
Tripathi added that the UAE digital transfer market is expected to reach a transaction value of approximately US$7.52 billion by the end of 2024, confirming customers’ increasing reliance on digital platforms for financial transfers due to their speed, convenience and security. Very high.
As the UAE is a major hub for workers to remit remittances to their home countries, the reliance on digital remittances is expected to grow rapidly, with the market growing at a CAGR of 3.08% from 2024 to 2028.
The future of digital money transfers in the UAE appears promising, as the massive adoption of digital payment methods, in addition to ease of use and security, has bolstered this optimism and is aided by the UAE’s strategic position as a major country in the field of finance. In terms of transfer, digital financial services are expected to continue to advance and flourish.
Tripathi said: “With the entry of more financial platforms, competition in the digital remittance service market is intensifying. Although traditional exchange companies will not disappear soon, customers prefer to use apps for transactions, but they will turn to traditional exchange companies. Large transfers.
Bassem Awada, Regional General Manager of TerraPay, believes: “Digital remittance applications via mobile phones and smart devices now occupy an increasing share of the traditional transaction market every year, but given the existence of some, they will not disappear from the market. “Society still wants to use old solutions.
He said: “Financial transfer applications are divided into two categories, one is approved by the UAE regulator, and the other is applications linked to banks and exchange companies, both of which have sufficient guarantees to carry out transfers, which provides users with a wide range of range of choices, and digital applications feature the ability to stream from your device anytime, anywhere without leaving your home or workplace.
Awada pointed out that digital applications now occupy a larger share of the traditional transaction market, accounting for 30% to 40% of the size of the financial transfer market outside the UAE, which is considered to be the second largest in the world in terms of overseas transfer volume, after the UAE .
Awada expects the digital currency transfer market to grow by 20% to 25% in 2024 compared to last year, noting that this proportion is growing every year due to the development of the financial sector led by the Central Bank of the UAE. Because the state leads the industry in the region.
Sayed Ali, CEO of myZoi, said: “Smart remittance apps have experienced significant growth in the remittance market recently, providing unprecedented convenience and efficiency to remittance operations as these apps allow users to easily conduct financial transactions digitally.” This saves them the time and effort associated with traditional remittance methods that rely on cash transactions and in-person visits to remittance service provider branches. “
These new apps rely heavily on digital technology as they offer instant transfers and lower fees, attracting a wide range of users, especially those who are tech-savvy. Its seamless integration with digital wallets and banking systems makes cross-border transactions easier than ever. Ali added that the remittance market in general is experiencing significant growth. Expectations for 2023-2024 released by a recent economic study indicate that digital financial transfers will increase as operating costs are lower thanks to infrastructure compared to traditional financial service providers such as banks and exchanges. Low. As reliance on digital remittances increases, we expect digital applications’ share of the overall market share to grow rapidly.
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