The Foreign Exchange and Remittance Group (FERG) announces that exchange houses under the jurisdiction of UAE authorities have received approval to implement an optional strategic fee adjustment, allowing for a minimum increase of 15% which typically equates to 2.50 dirhams. This marks the first fee adjustment in five years, the decision recognises the evolving regulatory landscape and related cost increases since the previous update.
The fee increase is expected to take place for remittance services provided through physical branches, while remittances offered via mobile apps of exchange houses will most likely remain unchanged or even reduced to maintain competitiveness digitally. FERG played a pivotal role in carrying out extensive market research and coordinating with the regulatory bodies to facilitate for this crucial initiative.
The granted approval follows a detailed evaluation of the expenses associated with maintaining high levels of service standards and complying with regulatory requirements. This decision aims to strike a balance, ensuring that exchange houses remain competitive while addressing the increased costs. Despite the approved adjustment, it is anticipated that the average remittance cost of sending $200 equivalent will remain at less than 3.5%, significantly below the global average which stood at 6.2% during 2023 according to the World Bank’s Remittance Prices Worldwide database. The revised pricing remains well within the United Nation’s Sustainable Developmental Goals which aims to eliminate remittance corridors with costs higher than 5% by 2030.
Mohammad A. Al Ansari Chairman of FERG, said: " I commend this decision to allow exchange houses a fee adjustment, highlighting the significance of adapting to the industry's changing dynamics. This move ensures that exchange houses can sustain the delivery of high-quality services while addressing the changing regulatory requirements and associated operational costs, all of which were maintained without fee increases for the past five years.”
FERG, through its members, reaffirms its dedication to customer value and satisfaction. This fee adjustment aims to strike a delicate balance between meeting industry requirements and providing competitive offerings to customers, ensuring a seamless, secure and affordable remittance experience.
FERG or Foreign Exchange and Remittance Group (https://www.ferguae.org/) is a non-profit organization based on the initiative of the Central Bank of UAE. By fostering collaboration and synergy, FERG aims to create a shared platform where all participants can thrive and derive mutual advantages from their collective efforts. FERG members range from small to large exchange houses with over 100 branches to single branch entities.
The initiative to form the Foreign Exchange & Remittance Group (FERG) started in the year 2003, wherein, some of the large and leading exchange companies decided to come together and hold regular meetings to discuss current market situations, opportunities and threats facing the exchange industry.
For media inquiries, please contact.