Transferwise set to corner the market in remittances from Arab States

With sterling teetering on the edge of another fall, British expats transferring payments and deposits in their local currency back to their UK bank accounts are losing every which way due to expensive transfer charges.

Wherever in the world UK expatriates are based, the majority will need to transfer cash back to the home country, whether it’s to pay bills, top up savings accounts or for any other reason. Between the disastrous exchange rate and the high charges imposed by banks, expats are losing money hand over fist, especially if they’re on the high salaries paid to experts living and working in the Middle East.

The region’s money transfer market accounts for multi-billions of dollars, with the sterling figures a relatively small part of the remainder of total transfers, but British expats still resent the high charges. UK-based currency transfer company Transferwise is now targeting this market by establishing a new hub in Dubai aimed at slashing the cost of sending cash back to the home country. Although a number of tech start-ups in the region have already been disrupting the hold of traditional banks in the remittances marketplace, Transferwise is about to go one better by abandoning the single international transfer route and replacing it with two local transfers, thus avoiding expensive banking fees.

A spokesperson for the company explained its expansion to the Gulf States, saying it would benefit those who need it most. According to local media, the new route will cost up to eight times less than present-day bank charges, making it good news for expats who transfer regularly. In addition, at least 25 per cent of all transfers are instant rather than taking several days at best under the old system. It’s a huge deal for Transferwise, as annual remittances to low to middle-income countries totalled $529 billion last year, and the total of global remittances stood at $689 billion and rising.