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Emirates Post in money market ‘poses no threat’

DUBAI — “Emirates Post’s entry into the new financial and money remittance field will not pose a major threat to the existing players,” money exchange and remittance companies told Khaleej Times.

Emirates Post will enter the money exchange and remittance business from July this year, following approval by the Federal National Council(FNC). Market sources believe its entry will only add value, offer more convenience, competitive pricing and customers will stand to gain..

“Being in the business for last 25 years and as market leaders we would always welcome respectable organisations to serve people and enter this business. We would be more than glad to witness more players like us who would add value and more convenience to the customers,” said Y.Sudhir Kumar Shetty, General Manager, UAE Exchange Centre. C.C. Niyaz Ali, Manager UAE, Thomas Cook Al Rostamani, believes more competition is better for the consumer. But, the success of a new player will depend on additional value they will bring into the market for the customer.

Ali pointed out that the current players (approximately 300) are spread across the country and bring the highest value for its customers. However, it will be interesting to see how Emirates Post will bring better quality service into the existing market and make a dent into the market share. It is not a small challenge, but a tall order for any new company entering the local money exchange market, Ali claimed. He ruled out any undercutting in prices by Emirates Post because the existing players are already operating on very thin profit margin. It is impossible to undercut prices any further.

While, Ali believes there is definitely room for Emirates Post to enter the market which is vibrant and growing, he expressed concern on the ‘level playing’ policy of the Central Bank. “So far the Central bank’s policy is fair, but, we hope the postal authority is not given undue benefits over the private sector. For example, the Central bank in the UAE should not limit further growth of exchange companies, and give undue benefits to Emirates Post over the private sector companies.”

Abdullah Al Daboos, Director General of Emirates Post said, FNC had recently approved the postal authority’s proposal to venture into finance, money transfer and exchange business. “We have got the acceptance and are finalising the legal formalities,” Al Daboos said, pointing out that hopefully they will launch the service in July this year.

“We are studying the options of either a joint venture with a suitable private company, or, outrightly purchase an existing company to have a better reach to our customers.”

Emirates Post which has a network of around 80 postal offices in the UAE can provide the infrastructure and technology necessary to offer the service and reach out to people located even in the remotest areas of the country, which otherwise cannot be reached by the existing money exchange and fund transfer companies, he claims.

Another reason to expand into this field of business, Al Daboos said was in the national interest. The new area of service will help create more jobs for nationals, he said, explaining the national interest involved in promoting the new service.