Exchange companies obtain approvals to raise money transfer fees

The Financial Exchange and Transfer Institutions Group (FERG) announced that accredited exchange companies in the UAE have obtained the necessary approvals to implement an optional amendment to fees, allowing them to increase them by no less than 15%, which is equivalent to 2.5 dirhams.

This amendment represents the first fee adjustment in five years, acknowledging developments in local and global regulatory requirements and cost increases since the last fee adjustment.

The amendment to fees applies exclusively to branches, while fees for transfers through applications affiliated with exchange and financial transfer companies will remain the same or may be reduced in light of the reliance on digital services and the completion of many tasks without returning to the branches.

The Group of Banking and Money Transfer Institutions played a pivotal role in conducting extensive market research and coordinating with regulatory bodies to enable this crucial initiative.

This approval follows a careful evaluation of the expenses associated with meeting the highest standards of service and complying with regulatory requirements. The decision aims to ensure the continued competitiveness of exchange companies in light of increasing costs.

Despite this slight increase in fees, the average cost of money transfers is expected to remain at about 3.5%, which is much lower than the average cost at the global level.

According to the latest World Bank reports, the average global cost of sending the equivalent of $200 is 6.2%.

The revised remittance fees are also still part of the United Nations Sustainable Development Goals, which aim to eliminate remittance corridors with costs higher than 5% by 2030.

The Chairman of the Board of Directors of the Banking and Money Transfer Institutions Group, Muhammad Ali Al-Ansari, said: “We commend the decision to allow exchange companies to amend their fees on money transfers, as this step is of great importance in enabling companies to adapt to the changing factors in the sector, and the decision also allows exchange companies to move forward.” We continue to deliver high quality services, meet changing regulatory requirements and adapt to operating costs that have been maintained without any increase in fees over the past five years.”

The group of banking and money transfer institutions confirms, through its members, its dedication to providing added value and satisfaction to its customers.

This fee adjustment aims to ensure that fee adjustments are aligned with customers' ability to bear transaction costs, ensuring a smooth, secure and affordable transfer experience.