TransferWise, the London-headquartered fintech company, has expanded to the Middle East and North Africa with the launch of its low-cost cross-border online money transfer service in the United Arab Emirates, it announced in a statement today. The firm has opened an office in the Abu Dhabi Global Market (ADGM) financial center, operating as a hub for its expansion into the Middle East, and is licensed as a money services provider.
The British company, which serves 7 million customers around the world, cited an independent study to claim that its money transfer service is up to two times cheaper than conventional providers. The study had compared the cost of sending money abroad between March 1 and 5 this year through six of the top banks and brokers operating in the UAE, including Al Ansari Exchange, Al Fardan Exchange, Western Union, and Dubai Islamic Bank.
A quick search on TransferWise’s website for transferring AED 1,000 (USD 272) to India, Pakistan, the Philippines, and Egypt suggests that the users could save between AED 60 and 75 by using TransferWise instead of conventional banking channels. We could not verify the claims as similar data for banks and other money transfer services is not available online.
TransferWise, with its 14 offices across the globe, claims to process USD 5 billion in cross-border and local customer payments every month, saving customers USD 1 billion a year compared to performing the same transactions through banks.
The money transfers to India, according to TransferWise’s website, take an hour to land in the recipient’s bank account. For Pakistan too, the website notes cash arrives in recipient’s account on the same day. For the Philippines, processing takes one business day, while transfers to Egypt take two days. The company says that 25% of its international transfers are instant, with deliveries made in less than 20 seconds.
With over USD 46 billion (AED 169.2 billion) in personal outward remittances, the UAE was the second biggest outward remittance country in 2018, behind only the United States, according to data compiled by the World Bank.
Kristo Käärmann, CEO and co-founder of TransferWise, commented on the launch and said, “The UAE is one of the most important remittance markets in the world, and we’re delighted to be bringing the first fully online money transfers to the country. It’s testament to the forward thinking nature of the FSRA that we’ve been able to bring our product to market so quickly—more competition means more choice for those living and working in the UAE.”
“Sending money abroad should be as easy as sending an email, yet many people are still reliant on expensive, slow legacy services. People can now send money to over 80 countries without leaving their homes, and all at the real, mid-market exchange rate,” he added.
A large portion of the remittances sent from the UAE are by the Asian migrant workers, and some local startups including Now Money, Rise, and Denarii Cash have already built solutions to help them perform low-fee cross-border transfers online. All these startups are working closely with migrant workers, expat communities, and their employers to continuously improve their services.
For example, some of these startups help migrant workers, especially those from India, Pakistan, and Bangladesh who don’t speak English, with the onboarding process. This is done by representatives who can speak their languages.
TransferWise, which is a rare, profitable unicorn, will be taking on these startups. But the big players it is going after are the conventional exchange houses and banks that have failed to innovate and have left gaps for companies like TransferWise to fill.
This article first appeared in MENAbytes.