The number of visitors has been growing over the years, cementing Dubai’s position as the ultimate shopping destination. But then the UAE, with its vision and innovative initiatives, has grown beyond being just a shopper’s paradise. The nation today leads the change toward the next era, embracing technology. The vision of making the economy, a cashless one, is energising enough to bring in phenomenal changes in various sectors including finance, hospitality, healthcare, infrastructure and more. Various upcoming infrastructural projects and tourist attractions like Dubai parks etc. make the country a visual treat too.
Adding to it is the geographical advantage, which makes the UAE one of the hottest trade hubs that connects the investing world with potential markets like Africa through its strong air and seaports.
Post recession the way the country has re- emerged into a strong economy in the region goes to show the vision and resolve of its leadership. It is these very same qualities, which has been attracting the world to these sands of gold since decades in search of better commercial prospects.
We caught up with Promoth Manghat, CEO of UAE Exchange, the leading remittance, foreign exchange and payment solutions brand in the UAE. As the head of the organisation that deals with millions of tourists and expatriates, addressing their various financial requirements, Promoth has some rich insights to share.
UAE aims at being a cashless economy. How will it impact people, especially travellers?
The Government of the UAE envisioned a cashless future for the economy with the introduction of contactless technology, growth of retail, e-commerce and tourism. These aspects drive the growth of card payments, NFC payments etc. Toward this, the leadership is encouraging innovative means for making payments through online, credit / debit / prepaid cards, mobile wallets etc., with emphasis on enhancing protection of payments with multi-layered shield including 3D secure and OTP authentication. This encouragement has many service providers, including banks and other financial service providers, offering mobile wallets and prepaid cards including travel cards. As per statistics in 2013, the UAE recorded over 18.2 million cards in circulation, which is expected to reach 28.4 million by 2018 registering a CAGR of 8.57%. (Source: http://www.khaleejtimes.com/business/banking-finance/spend-and-save-with-debit-cards)
UAE is among the front runners exploring the possibilities of cashless payments. Since the UAE is a travel-intensive market, with people constantly travelling out of the country for business and leisure, prepaid travel cards are a big draw. These cards relieve travellers, the risk of carrying hard cash to a foreign land and save money from currency fluctuations, while keeping their transactions secure and offering peace of mind.
UAE is becoming a favourite among tourists. What are your views?
Like migrants, yet another category to influence money movement are tourists, impacting the foreign exchange market. According to World Bank, total global foreign exchange, including all phases of travel, is worth over $898 billion. UAE, the most active tourist destination in the Middle East, experienced a rise in tourism in 2015 due to Dubai Shopping Festival and other popular tourist attractions. Meanwhile weakening of the Euro had a positive impact on the business as more tourists from the UAE visited Europe.
To the travelling population in the UAE, we offer the MasterCard-powered prepaid travel card called gocash. This is technologically superior and completely secure with multi-layer protection. Increasingly preferred by travellers, gocash has exchange rate lock facility, which protects money from currency fluctuations. In a single card up to six currencies can be loaded from a bouquet of 25 including the AED. The MasterCard platform offers it trusted security and worldwide acceptance. This prepaid card comes along with travel insurance, offering complete peace of mind for customers on the move.
As a brand with a long history, how do you look at the technology-driven future?
In 2015, UAE Exchange completed 35 years of successful global operations. This strong legacy has never been an impediment for its progress. As a brand in the highly competitive space of remittances, foreign exchange and payment solutions, UAE Exchange realises that going digital is the future. We have a well defined digital strategy in place, which is the basis for our plans in 2016.
But then futuristic has always been the brand’s perspective. Right from inception UAE Exchange has believed and invested in technology. That latest in technology was always adapted to the advantage of its 13.2 million customers across its network in 31 countries with close to 800 branches, the largest network in its class. This approach enabled UAE Exchange to bring them revolutionary products like FLASHremit, the instant bank account credit facility; Xpress Money, the instant money transfer facility; Money2anywhere.com, the online money transfer portal; gocash, the prepaid travel card; and MyBranch, the self-serving electronic kiosk, to name a few.
Our online money transfer facility is active in 11 countries including Qatar. We are ready to launch the facility in the UAE too, post approvals from Central Bank of the UAE. Meanwhile continuing the tradition, UAE Exchange invested in technology, partnering with experts like SAP for CRM and Finance; NICE Actimize for Compliance; and SunGard for Treasury function. These investments are steps toward the bigger vision.
How has the remittance scenario been in 2015?
According to World Bank estimates, globally developing countries are expected to receive over $441 billion in 2015. The UAE contributes a significant portion of that. In 2015 the strengthening US Dollar (USD) boosted remittances from the Gulf Cooperation Council (GCC) countries. Since the currency value of the remittance receiving nations in South Asia are not pegged to the USD, they depreciated immensely, giving the expatriates an opportunity to send more money home. As most currencies in the GCC region are pegged to the USD, they remained stable, working in favour of the expatriates living in the region.
The UAE, whose currency is pegged to the USD, saw a growth in remittances in 2015. Indians, who outnumber other nationals in terms of numbers, dominated in the volume of money transfers too. Indian Rupee (INR) depreciated to its historic low in 2015, mostly due to the strengthening USD and volatility of other global currencies. This worked in favour of NRIs, worldwide, more so those in the UAE, who sent more money home. Similarly other nationalities including Pakistanis, Nepalis, Filipinos, Bangladeshis, Sri Lankans etc., also got to send more money home from the UAE as their currencies too depreciated against the stronger USD. But the same cannot be said about those global currencies, which are not pegged to the USD. For instance Euro, Russian Ruble and Chinese Yuan depreciated. So did the remittances emerging from these countries.
As in the last 35 years, in 2015 too, UAE Exchange played a significant role in ensuring that the money transferred reached its destination safely. Globally UAE Exchange transferred around USD 27.56 Billion, which is six per cent of the total global remittances (as compared to World Bank reports).
Also remittance volumes in 2015 saw a six per cent increase as compared to 2014. From the UAE alone, UAE Exchange transferred around USD 13.40 Billion. India, the largest receiver of remittances in the world, received $75 Billion, as per the World Bank. Over 10% of that amount was handled by
Along with fast and safe remittances, what else does UAE Exchange offer blue-collared workers, a dominant factor in the UAE employment scene?
Yes, in the UAE a major percentage of migrants are blue-collared low wage earning workers. They are mostly unskilled or semi-skilled, who belong to the lower segments of the economic pyramid. Their literacy levels are also low. For the same reasons, they are prone to be manipulated by their agents and/or employers in terms of respecting the employment terms. There have been cases of discrepancies in the payment of their salaries. To help streamline salary disbursals, the UAE Ministry of Labour and the UAE Central Bank came up with an award-winning initiative called Wages Protection System (WPS).
UAE Exchange, in alignment with Government’s vision and WPS, launched a state-of-the-art payroll solution called Smart Pay. We, in partnership with MasterCard, offer electronic payroll cards, which empower the wage earners to withdraw from any MasterCard ATM / UAE Exchange CDM or to pay for purchases made at any MasterCard-approved merchant location. There are also a host of loyalty programmes that come along with this payroll card, adding value every time they use it.
As a brand established in the UAE, how do you see the economy and market here now?
UAE Exchange was established in 1980 in the UAE. We have been an active witness to the evolution of the country since. Along with it, we too have grown into a global organisation. Traditionally migrants from world over have been flocking to the UAE in search of better prospects, be it in career or business. What started with the oil boom in the seventies and eighties has now gone beyond just oil. Thanks to the diversification of the economy to slowly reduce its dependency on oil business. Added to it the cosmopolitan culture, adaptability, progressive mindset, opportunities and the freedom to grow, have attracted millions to this nation.
According to World Bank report, over 88% of the UAE’s population comprises of expatriates, dominated by South Asians and Arabs. And that’s good news for remittance industry, which thrives on the money transfers by these migrants. Probably the UAE has one of the most mature remittance markets, thanks to the well-placed regulations and an open business environment, where over 150 different money transfer service providers co-exist competitively. This openness improves competition, balancing out the cost of remittances. Not surprisingly the UAE is among the least priced markets in terms of cost of sending money home, an advantage to millions of expatriates from various countries. Most of the expatriates are from developing nations, some of which have their economies totally dependent on the remittances flowing in.
The UAE Government’s vision for a technology powered cashless society opens new vistas for all. As an organisation that has evolved along with the UAE, we too have started our journey toward complete digitalization. We have taken significant steps toward our aim including major investments in technology. This is in line with our tradition of bringing the best in technology first, we have invested in cutting edge yet again. Since going digital is the future, our investment in technology is our investment in future.
- …handled USD 25.10 Billion in foreign exchange, globally. 9% more than 2014.
- …has a 6% share of the total global remittances and a 50% to 60% share in the UAE market
- …transferred more than 10% of the total remittance flow to India, the world’s largest receiver.
- …earned the naming rights of Jebel Ali Metro station in Dubai Metro
- …launched online money transfer facility in Qatar to an overwhelming response
- …launched mobile app and electronic payment kiosk
- …has close to 800 branches in 31 countries, the largest network among remittance brands
- …has close to 150 branches in the UAE including 16 in the Dubai Metro network
- …has its instant bank transfer facility, FLASHremit in seven countries
“Brands with legacy generally find it difficult to be agile and innovative. UAE Exchange, in spite of its rich legacy of 35 years, chose to be nimble-footed and adopted an innovative thought process. We invested our energies in re-looking at our internal processes and in the technology of the future. We know that going digital is the only option available to stay ahead.”