Residents of the UAE are adjusting to a recent 15% increase in remittance fees at physical currency exchange outlets
This adjustment, the first of its kind in five years has ignited discussions among cost-conscious customers while signaling a broader transition towards digital payment solutions.
The decision to increase remittance fees was made after consideration by industry stakeholders, led by the UAE industry grouping FERG (Foreign Exchange and Remittance Group).
The rationale behind the move stems from the escalating operational costs faced by currency exchange houses, necessitating adjustments in service fees to maintain sustainability.
While the fee hike has raised concerns among some customers, particularly within the Indian diaspora sending amounts exceeding Dh1,000, the majority have continued to complete their transactions.
A Exchange expert Antony Jos, noted that while there have been inquiries about the increase, customers have largely accepted the adjustment.
“It’s mostly the Indian diaspora sending more than Dh1,000 who seems to be questioning the fee raise,” said Jos. “But the majority still go on to complete the transactions. People are willing to pay the amount.”
However, the impact of the fee hike on long-term customer behavior remains to be seen. With the advent of heavy promotions expected towards the end of the month from currency exchange houses, banks, and fintech companies, including enticing zero-fee offers, the landscape of remittance transactions is poised for further evolution.
“The move seems to be paying off, according to industry sources, with remittances done through physical outlets continuing to record sizeable numbers,” said Adeeb Ahamed, Managing Director of LuLu Financial Holdings.
Moreover, as digital platforms operated by banks and fintechs remain unaffected by the fee hike, a gradual shift towards digital remittance options is anticipated.
This transition aligns with global trends and supports the UAE’s commitment to achieving the UN’s Sustainable Development Goals for 2030, which include targets for affordable remittance rates.
