TransferWise, the global low-cost online money transfer service founded in the UK, is expanding to the Middle East after receiving a licence from the Abu Dhabi Global Market Financial Services Regulatory Authority to operate in the UAE.
The platform, used by 6 million customers worldwide, expects to bring its first product to the Emirates next year, the company said.
“Money transfers from dirhams have long been one of our most wished-for currencies, so we always knew we would begin our expansion into the Middle East in the Emirates,” Kristo Kaarmann, chief executive and co-founder of TransferWise, said in a statement on Tuesday.
A total of Dh169.2 billion was sent from the UAE last year, the Central Bank’s 2018 annual report shows. Global remittances totalled $689bn (Dh2.5tn) in 2018, according to World Bank figures.
The average cost to transfer money from the Middle East and North Africa has decreased in the past five years to close to 7 per cent from about 8 per cent in 2014. However, the percentage slightly increased in the second quarter of this year and remains expensive at 6.91 per cent, the World Bank’s June report on remittance prices said.
London-headquartered TransferWise is taking on incumbents in the cross-border payments space like Western Union and MoneyGram by reducing fees and speeding up transfer times. The company’s expansion in the Middle East shows it is looking to capitalize on a growing remittance market in the region.
While governments and regulators are increasingly focusing on financial technology in the Middle East, World Bank data showed “modest increases” in remittance costs in the region last quarter.
TransferWise also said Tuesday it would open a global office in Abu Dhabi Global Market (ADGM), the state’s financial center. The company will be regulated by the ADGM Financial Services Regulatory Authority as part of the new license.
TransferWise said it will bring its first product to the UAE in 2020.