How remittances shaped the UAE in 2021
The outlook for the remittance industry in the UAE and beyond for 2022.
The evolution of remittances in 2020–21. Revolutionary new ideas like Xare are changing the game.
What role if any will crypto play in this space.
2021 has seen the emergence of new trends and acceleration of previous trends from 2020. The two trends that have accelerated are:
- The pace of digitization of remittances has greatly accelerated in 2021 — with even traditional players having digital remittance options
- Banks have started participating in the remittance space very actively, a sector previously left to exchange houses. There are several banks now which give 0 fees or low fees remittance option to their customers and this has increased the competitive dynamic in the space.
Also, two new trends have emerged strong in 2021;
Sending money using crypto — which although nascent is beginning to accelerate, and;
New models like Xare — which create an alternate to traditional money sending and allow people to share their access across borders. From Xare’s perspective, they have had closed to $200 million being shared on their platform across 130 countries. Models like Xare allow people to choose how their money is spent and make sensible budget allocations — an area of big concern for migrants everywhere.
FinTechs and remittances
This year saw several remittance houses typing up with FinTechs to offer instant remittances. We see this important trend continuing.
In partnerships with remittance houses, FinTechs bring to the table — reach and a seamless UX / UI model.
There has been an explosion of FinTechs in the region with several different value propositions to the end-user — across savings, loans, wallets & transfer — and each of these groups can benefit from a remittance solution, as the country has a majority of migrants.
The outlook for the remittance industry in the UAE and beyond for 2022
We think 2022 will be shaped by not just local players, but global players making disruptive moves. As an example WhatsApp is using Stable Coins to facilitate in app money movement. Once they have built the rails to do this — they can technically launch this anywhere and that can be a massive disruptor to the entire money movement space.
Second trend will be the emergence of a different type of remittance customer. The migrant population is moving from largely low income migrants to more top global talent in tech and otherwise. We will get high income individuals who needs to be paid from outside as well as send money outside.
This will shape a new class of players in the market — who go beyond pricing and focus on convenience as well as user experience.
Finally, we continue to see an acceleration in need for and use of Xare — which focuses on removing need to send money / remittance altogether and provides a different way to manage your finances cross border.