Remittances • B2B

Even in a market as traditional as remittances, disruption is helping drive down costs and spur innovative ways of saving customers money.

How have you evolved in recent years as a company?

SULTAN AL MAHMOUD Wall Street Exchange has been in business since the 1980s. Emirates Post was our major stakeholder after it acquired 60% of the business in 2005 and then purchased the remaining 40% in 2012. So right now, it is the only exchange company fully owned by a federal entity. We are regulated by the Central Bank of the UAE as a result. We were one of the regional pioneers of the exchange industry. The group has three subsidiaries, and our core business is money transfer and currency exchange. According to central bank statistics, the volume of remittances for 2017 was AED160 billion. There are 100 licenses for exchange companies in the UAE, which represent 70% of business; the remaining 30% goes to the banks. Because of the population, India is the number-one remittances market by far, totaling AED35 billion, followed by Pakistan, Egypt, and the Philippines.

OSAMA AL RAHMA Al Fardan Exchange’s core activity is remittances. After years of growth, the UAE’s economy has become the second largest in the region and second in terms of remittances after the US, totaling some USD44.4 billion in 2018. We cater to the evolving needs of different segments of customers by keeping up with technological disruption. We use API to remit money rather than the traditional methods and engage with fintechs and other companies to provide services related to blockchain. This all serves the efficiency, security, and cost of remittances. We recently launched Western Union’s WU.com app, allowing people to remotely send money to more than USD4 billion accounts globally with 550,000 cash-out locations. This is the kind of revolution we are always trying to be engaged in to match what the government is doing. The UAE is one of the lowest worldwide in terms of charges on remittances. The UN’s Sustainable Development Goals aim is to bring the transaction costs of migrant remittances down to less than 3% per person by 2030, but the rate in the UAE is already 1.5-2.5% per person. This means workers in all sectors can afford to send money through official channels. This is critical and adds real value to what the private sector has been doing along with the central bank and other regulatory bodies. The Dubai government has a full-fledged digital strategy for transforming the whole city under the Smart Dubai project.

SAM Financial inclusion is an important topic for us. Today, the government has an initiative for low-income people. There are around 4 million workers included in the Wages Protection System (WPS), wherein the entire national payroll is processed. First, this serves the financial inclusion objective, and second, it ensures that workers receive their salary on time. Many of the unbanked have no access to the system in which their money is protected. Now, banks are trying to cross sell and come up with some financial products for the unbanked in terms of microfinancing or access through electronic channels. For example, money transfer can be done on a cellphone instead of at a branch. In this regard, we offer our branded card to employers and employees through which workers can receive their salary. The card allows them to acquire other financial services such as insurance, for instance, or even microfinancing.

OAR The government’s goal is for Dubai’s public sector to move to blockchain by 2020, and it has a clear strategy for doing this. This is headed by the blockchain division within Smart Dubai. Smart contracts, such as those for real estate or asset sale and purchase agreements, will make the process seamless with a digital identity using which one can manage all these issues and transactions instantly. This will make a big difference because it will eliminate the need to go through all the documentation and paperwork with different departments. Blockchain is a technology that enhances transaction security and can revolutionize the way we work. It can drastically change the business model we have today once it is adopted by all parties. For now, it is an emerging technology; but, moving forward, all the partners must have the same protocols and a standardized technology. A global consortium of banks called R3 was formed in 2015 because they wanted to explore and standardize blockchain. For banks, we do not yet have one globally integrated blockchain environment, which is why we have partnered with Ripple as an entry into blockchain, whose entire system and its infrastructure is emerging and evolving. ✖