Abu Dhabi February 12 2024: The Foreign Exchange and Remittance Group (FERG) announced that exchange houses under the jurisdiction of UAE authorities have received approval to implement an optional strategic fee adjustment, allowing for a minimum increase of 15 percent which typically equates to AED2.50.
This marks the first fee adjustment in five years, the decision recognises the evolving regulatory landscape and related cost increases since the previous update.
The fee increase is expected to take place for remittance services provided through physical branches, while remittances offered via mobile apps of exchange houses will most likely remain unchanged or even reduced to maintain competitiveness digitally.
FERG played a pivotal role in carrying out extensive market research and coordinating with the regulatory bodies to facilitate this crucial initiative.
The granted approval follows a detailed evaluation of the expenses associated with maintaining high levels of service standards and complying with regulatory requirements. This decision aims to strike a balance, ensuring that exchange houses remain competitive while addressing the increased costs.
Despite the approved adjustment, it is anticipated that the average remittance cost of sending US$200 equivalent will remain at less than 3.5 percent, significantly below the global average which stood at 6.2 percent during 2023, according to the World Bank’s Remittance Prices Worldwide database. The revised pricing remains well within the United Nation’s Sustainable Developmental Goals which aims to eliminate remittance corridors with costs higher than 5 percent by 2030.
Mohammad A. Al Ansari Chairman of FERG, said, “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.”
FERG, through its members, reaffirms its dedication to customer value and satisfaction. This fee adjustment aims to strike a delicate balance between meeting industry requirements and providing competitive offerings to customers, ensuring a seamless, secure and affordable remittance experience.
