Money transfers across borders can be fragmented, slow, inefficient and expensive even today. But as new technology offerings continue to join the remittances landscape, around 70 per cent of consumers across the UAE believe the future lies in digital international payment methods; according to new Visa research.
Despite continuing difficulties surrounding international money transfers, the amount of global remittance inflows continue to reach new records.
While around 70 per cent of surveyed consumers in the UAE are turning to digital apps to send and receive funds internationally, only 53 per cent are doing so globally.
The new Visa ‘Money Travels: 2023 Digital Remittances Adoption‘ research report consists of a survey of 14,000 consumers across ten countries. Perhaps unsurprisingly, the report highlights that digital remittances are becoming the most popular way to move money internationally. In comparison going to a physical bank or branch (34 per cent); sending cash, checks or money orders by mail (12 per cent); or giving money to another person who is travelling to their home country (11 per cent) fell behind the 70 per cent of remittances.
In the UAE specifically, 63 per cent said they send remittances from a physical location, compared to sending checks or money orders by mail (8 per cent); sending cash by mail (9 per cent); or giving money to another person who is travelling to their home country (11 per cent).
Digital transfers bringing positives
Salima Gutieva, VP and country manager for UAE at Visa, said: “Fast, easy, and secure payments are crucial for expatriate workers to provide instant financial support for their families, particularly in emergencies.
“This new research shows the rapid acceleration of digital payments in the UAE, which is among the largest source markets of remittances globally.
“However, the industry needs to continue further streamlining remittances within reach of more expatriates and their families who rely on these lifeline payments to do everything from pay for food, education, or even unforeseen medical costs.”
Remittance users in the UAE expect to use digital transfers more often in the future. Around one-third expect to send larger amounts of money in the future. Sixty per cent of surveyed remittance users intend to use digital money transfers more often within the next 12 months compared to the three per cent who don’t foresee using to digital remittance methodologies.
One of the most common sticking points of digital transfers is fees. Thirty-eight per cent of surveyed remittance senders and 35 per cent of surveyed remittance recipients reported fees (including how change rates are calculated) as a pain point. 28 per cent of surveyed remittance senders and 23 per cent of surveyed remittance recipients reported issues with calculating the exchange rate.
Looking to the future, most remittance users in the UAE believe digital transfers will have a positive benefit, including making it easier to send money and making sending money more secure. Fifty-seven per cent of surveyed remittance senders and 52 per cent of surveyed remittance recipients believe that making it easier to send money to other countries is the key benefit of digital payments.