Sunday, May 10, 2015
Dubai: Al Ansari Exchange, the UAE-based foreign exchange and worldwide money transfer company, sees strong growth in the money transfer and foreign currency business in the UAE over the next three to five years, Mohammad Ali Al Ansari, chairman and managing director of Al Ansari Exchange, told Gulf News in an interview, adding that the company has embarked on a Dh600 million expansion plan.
The exchange business plans to add 50 more branches to its existing 150 branches across the UAE, taking the total number of branches to over 200 in the next three years.
In the next few years, Al Ansari sees robust growth potential for the money exchange industry in the UAE. He expects to money transfer industry to thrive over the next five years on the back of the country’s strong economic outlook supported by growing economic activity, a rise in the country’s population and a rise in passenger traffic at all leading international airports.
“The overall growth outlook of the country, strategies around economic diversification and the hosting of mega events [such as] the Expo 2020 are clearly giving a big boost to the economic activity in the country [and are] supporting our expansion plans,” Al Ansari said.
Ten years ago, the UAE had a population of between 4.5 million and five million people. Now the country’s population has nearly doubled.
“We witnessed a slight slowdown in business growth in 2009, but that was a temporary phase and our business growth has been steady and consistent ever since,” he said.
Unlike the banking sector, the business of money exchanges did not face any long-term impact from the financial crisis as they were not exposed to non-performing assets.
“We are not in the business of lending and our income streams are mostly fee-based. So the impact of the financial crisis was short-lived on our industry,” he said.
Diversification
Over the last decade money exchanges have diversified their businesses into areas such as credit card payments, utility bill payments, as well as enabling payments in air-travel and e-commerce. While the extensive branch network of exchange companies have become handy for utility companies, airlines, telecommunications and investment companies such as National Bonds to reach out to their customer base spread across the country, these new business areas are offering diversified income streams and increased capacity utilisation of staff and infrastructure of exchange companies.
“Many of these new lines of business have expanded the customer base for the exchange companies [as activities] such as accepting credit card bill payments were not part of our original business model. But some banks with limited branch network and large cards sales offered us the opportunity to receive credit card payments from their customers. [The] Wage Protection System (WPS) is another opportunity that came our way when the country decided to pay wages through banking system,” he said.
While the banks in general have not been very enthusiastic in servicing the low yield WPS accounts, it has come as a boost to the business of money exchanges in the country. While the handling of these accounts in itself is not a lucrative business, its synergy to money transfer business is clearly benefiting the industry, Al Ansari said.
The money exchange business in the UAE, in terms of the number of transactions, is dominated by India and the Philippines, which together account for about 45 per cent of the total business. In terms of amount (volume) transferred, business transactions to markets such as China, Europe and Turkey are large.
By Babu Das Augustine Banking Editor
Gulf News 2015. All rights reserved.
