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UAE is ahead in adoption of digital remittance methods

Remittance senders in the UAE are primarily motivated by the need to provide regular support to their families

The UAE, a leading source country of remittances with a higher percentage of money senders compared to receivers, is ahead globally in its faster adoption of digital methods for sending remittances.

Remittance senders in the UAE are primarily motivated by the need to provide regular support to their families abroad and address unexpected emergencies, according to Visa’s annual “Money Travels: 2024 Digital Remittances Adoption” study.

The study revealed that beyond supporting their families, senders also prioritise aiding those in need in response to global events.

The study examines how consumers send money abroad, diving into the rates, methods, and reasons for sending and receiving payments. While 57 per cent of respondents said they prefer to use digital apps to send money abroad, 56 per cent of surveyed remittance users in the UAE expect to use digital money transfers more often in the future.

According to data from the World Bank, outward remittances from the UAE were among the highest in the world in 2023, despite slowing three per cent year-on-year to $38.5 billion.

The global survey of nearly 45,000 respondents by Visa shows that the need for fast, easy, and secure payments has never been more important to families, communities, and economies in the UAE and worldwide. The report also found that digital applications are the preferred method for moving money globally for over two-thirds of remittance users in various markets.

While global remittances declined year-over-year due to various economic challenges, survey results in the UAE --- identified as one of the countries with a higher percentage of remittance senders co per cent% of respondents in the country planning to send the same or more money abroad.

“Security, ease, and speed are the top priorities for expatriates in the UAE when sending money abroad to support families back home or aid people in crisis,” said Visa’s Salima Gutieva, VP and country manager for UAE.

“This research shows that digital payments are becoming a key tool for providing instant support, whether for unexpected medical bills, education, or food. There is more work to be done within the industry, however, to make cross-border money movement more streamlined to create new opportunities for financial inclusion and wealth building in communities globally that rely on these lifeline payments.”

The study highlights ease of use, privacy, security, and making life easier for friends and family are as the top benefits of sending or receiving international payments digitally. Digital apps remain the top method for both sending and receiving remittances in the UAE, followed by digital remittances at a physical location. Usage of physical remittances declines among senders in UAE. In December 2022, 9-15 per cent of senders did not use cash/check/money orders.

Fifty per cent of UAE respondents have been offered a free transfer when sending cash, checks, or money orders, only to find out there were hidden fees.

However, high fees – including how exchange rates are calculated - are a top issue for digital transfers. Fees were a key issue for 38 per cent of remittance senders and 33 per cent of recipients. Additionally, 20 per cent of senders and 23 per cent of recipients struggled with calculating exchange rates.

Education costs and supporting the lives of people in crisis are among the top cited reasons why UAE remittance users send or plan to send money to help improve prospects, the study reveals.