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Remittances likely to increase 20 percent
As remittance from the Gulf increases and new technology is developed, experts predict remittance rates are unlikely to return to pre-recession high
November 7, 2010 3:36 by Eva Fernandes
According to a recent report in Gulf News, the UAE’s personal remittance market is expected to grow by 20 percent “this year” (we assume this means 2010 vs. 2009, but the report is unclear). Speaking to Gulf News, Mohammed Al Ansari, from Al Ansari Exchange, one of the UAE’s major money exchanges, said given the current trends he is confident of the market increasing by 20 percent. The market is currently estimated to be worth Dh100 billion. Going by Al Ansari’s predictions, the increase will bring the market to Dh120 billion.
But others are less optimistic. A World Bank expert on remittances Dilip Ratha told Gulf News, ‘With improved prospects for the global economy, remittance flows to developing countries are expected to increase 6.2 per cent in 2010 and 7.1 per cent in 2011, a faster pace of recovery in 2010 than our earlier forecasts.’
A new method of transferring remittances is likely to change the nature and frequency of transfers. Luup, a mobile payment solutions company, is currently enabling more than 850,000 payroll cards in the UAE, which will allow workers to remit money through SMS. As opposed to using a money exchange or depending on bank transfers, remitters will be required to register online with the details of their beneficiaries under a particular name. After that, all remitters need to do is send an SMS, with the name of the beneficiary and the desired amount.
Aditya Menon, the executive director and global head of product management at Obopay, another mobile payment solutions company, told Gulf News the technology will be a valuable resource for most remitters. He said: ‘Instead of having cash in your wallet, you roll it up into your mobile phone. It’s secured with a mobile PIN so even if you lose your wallet you don’t lose your money… It’s very useful, especially when, at the receiving end, people are using the money to pay their bills, top up their mobile, or buy groceries.’
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