- Abu Dhabi Global Market Financial Services Regulatory Authority grants license to firm
- Firm plans to use local liquidity where possible to enhance customer experience
- “The Middle East was always on our map because of the significant volumes that flow here, but also the costs of sending money”, says CFO
The chief financial officer of major cross border payments firm TransferWise has said that the country will be a target for its services in the coming years.
It plans to open up shop in the country next year, and the UAE will be one of the first Middle Eastern destinations for the firm.
This comes after it received a license from the Abu Dhabi Global Market Financial Services Regulatory Authority.
In an interview with The National online newspaper covering the UAE, Matt Briers said that the “significant volumes” of international money transfer transactions in the country made it an attractive place to invest.
“The Middle East was always on our map because of the significant volumes that flow here, but also the costs of sending money”, he said.
He also outlined some of the processes which the firm said it would go through in order to reach its goals of charging fees of around 10% of the major banking fees.
This would include using local liquidity and as few stages of capital processes as possible.
“Wherever possible we will pay money out from local liquidity that we have … whereas with a bank, a bank would send this through a correspondent banking network that would actually go through many banks along the way. [That means] a huge amount of capital tied up and a lot of manual processes”, he explained.
“The typical bank costs around £30 (Dh142) to make a transfer internationally. TransferWise is doing it for about a tenth of the cost”, he added.
Dh refers to the dirham, the currency of the UAE.
TransferWise is a major name in the online money transfer scene, and it was set up in 2011.
Six million customers across the globe use the service, and according to figures it processes more than $5 bn every month.
It’s not hard to see why TransferWise has had its sights set on the UAE – and why it will now be celebrating to have received a license from the relevant authorities there.
Other than the USA, the UAE and Saudi Arabia are the world’s main sources of remittance activity – and by being able to bring its fast and low-cost business model to this region, TransferWise will be keen to get in on some of the action.
Industry analysts are predicting that other companies are likely to follow, which could create some competition.
However, it is also possible that they will aim to gain a foothold by entering into partnerships with TransferWise, which could give it something of a monopoly.
Learn more about what firms such as TransferWise are up to by keeping an eye on our news pages.
