UAE Exchange and Financial Services, which celebrated its 35th year of operations in remittance and foreign exchange businesses, is exploring opportunities to widen its payments portfolio. With a global customer base of 7.9 million, it is expecting 10-15 per cent growth in business through addition of new products, channels and stores through its 800 branches across 31 countries. The company’s ‘travel and tours’ business vertical has also started paying off and is complementing its foreign exchange business. Promoth Manghat, CEO (Global Operations), has chalked out a vision to transform UAE Exchange into the most admired global brand and also to expand into more markets, especially Africa. The recent acquisition of Travelex, a foreign exchange firm, is a major step towards achieving this objective, he says in an interaction with BusinessLine. Edited excerpts from the interaction:
How much of the annual remittances being sent to India is through UAE Exchange? From which countries do they mainly come from?
In 2014, India received a total of $71 billion as remittances from across the globe. Of this, UAE Exchange handled around 10 per cent. GCC (Gulf Cooperation Council) is the second-largest source for remittances after North America. Around 35 per cent of the total remittances to India come from the GCC.
The company has around 60 per cent market share in the UAE and a strong presence in the MENA (Middle East and North Africa) region. We are seeing an average overall growth of 7-8 per cent in the GCC. We also transfer significant amounts of money from the US, the UK and Australia through our traditional channels and also through our online money transfer portal Money2anywhere.com.
Likewise, in India, our company is the largest authorised dealer (category II), catering to the remittance needs of retail customers who send money abroad. On an average, we remit around $250 million a year from the country, of which, Kerala and Punjab contribute the maximum. The average ticket size of such remittances per customer is $5,000-8,000, mainly for the purpose of education, subscription payments, hotel bookings, family maintenance, etc.
Is there any change in the average amount remitted home by expats in the Gulf?
Such remittances can be categorised into two segments. First, remitters who send money with consistent frequency. Generally, it is a monthly transfer for family maintenance. And then, there are the opportunist remitters, who do not send regularly but wait for the currency to weaken to send more money home. These are generally white-collared, high-ticket remitters and this category is growing in the GCC.
More professionals with better pay-scales are seen coming into the region. This has increased the average amount of remittance per person from the Gulf from $600 to $750 a month in the last five years.
Since banks and other exchange houses are also in this competitive business, what is the USP of UAE Exchange?
Customer-centricity, wide range of products, technological advantage and customer service are some of the aspects that attract customers to UAE Exchange. Be it bank transfers, instant cash transfers, currency exchange, payroll solutions, bill payments, prepaid travel cards or mobile top-ups, they find all of these under a single roof. This has been made possible through strategic partnerships which we have built over the years with various global banks, service providers, NGOs, etc. Besides, Flash-remit, the new product which offers real-time bank account credit, has helped us garner a major share in the remittance business. We have partnered with 18 major banks in India in extending this lightning service. Above all, with the largest global network, customers are able to find a branch next to them.
Why has the dip in oil prices not affected the overall flow of remittances last year?
This is because the governments of GCC used their reserves to maintain the spending levels, ensuring that the economies did not get impacted. Also, expatriates in this region benefited from the weakening of the rupee against the dollar and could send more money home regularly.
Also, GCC economies are increasingly trying to reduce dependency on oil. Hence, they are exploring alternative sources of wealth creation in the diversification process as well.
Major initiatives, such as the Dubai Expo 2020, World Cup Football in Qatar and various major infrastructural projects are a result of this new way of thinking. All these have opened up more opportunities for expatriates, who are exploring other sectors for jobs.
How far have you progressed in new business verticals, such as travel cards?
Of late, there has been a behavioural change, with Indian customers increasingly carrying travel cards instead of currency while going abroad. The country has seen a shift from physical cash to card payments and is now slowly moving towards mobile payments.
We are making efforts to create awareness among customers on the merits of travel cards, especially on the security aspects. We have introduced our own plastic card, GoCash, which can load 10 different currencies, and customers can use them at swiping machines at merchant outlets, withdraw money from ATMs, etc.
Since you have ventured into loan business in a big way, what are your future plans?
Disbursements of loans will remain a core area, as around 45 per cent of our total revenue comes from the loan business. With a portfolio of around ₹500 crore as on date, we are into various products, such as gold, personal, vehicle, business, and house-maintenance loans.
We are trying to innovate and invest in technology so that customers can be serviced faster from their homes, online or through the mobile. We are focusing to increase the loan portfolio to ₹3,000 crore in the next five years