UAE remittance fees set to increase by 15%

Sending money back home via a physical remittance branch in the UAE could cost you an additional 15 per cent in fees in the coming weeks and months.

This is after the Central Bank of UAE (CBUAE) gave the green light to the Foreign Exchange and Remittance Group (FERG) to allow their members to implement an optional strategic fee adjustment of 15 per cent on remittance transactions. This fee increase primarily relates to physical branches and not online remittance services.

FERG says this marks the first fee adjustment in five years, and comes amid related cost increases in the sector.

Despite the hike, FERG says it is expected that the average remittance cost of sending $200 (Dhs735) will remain at less than 3.5 per cent (about Dhs26 or $7), which is still lower than the global average of 6.2 per cent during 2023, according to the World Bank’s Remittance Prices Worldwide database.

FERG further notes that the revised pricing remains well within the United Nations Sustainable Development Goals which aim to eliminate remittance corridors with costs higher than 5 per cent by 2030.

“I commend this decision to allow exchange houses a fee adjustment, highlighting the significance of adapting to the industry’s changing dynamics. This move ensures that exchange houses can sustain the delivery of high-quality services while addressing the changing regulatory requirements and associated operational costs, all of which were maintained without fee increases for the past five years,” said Mohammad A. Al Ansari, Chairman of FERG. 

The granted approval followed a “detailed evaluation of the expenses associated with maintaining high levels of service standards and complying with regulatory requirements”, FERG further noted.

FERG, a non-profit organisation, launched in 2003 as part of an initiative of the CBUAE. Its members range from single branch entities to large exchange houses with over 100 branches.