The United Arab Emirates (UAE) is home to a diverse population of expatriates from all over the globe. As such, money transfers from the country tend to have significant results.
In 2020, outward remittances reached a whopping $43 billion, thanks to the UAE’s predominantly foreign workforce. According to the Central Bank, this continues to benefit countless families in countries as far as the United Kingdom (UK), the United States (US), the Philippines, and India.
Money transfer service providers such as banks and exchange houses thrive with the continuous boom of the forex sector.
If you’re worried about making mistakes with sending money overseas, remember these eight dos and don’ts to ensure that your hard-earned dirhams safely reach your loved ones overseas.
1. Find a trustworthy agency.
When shortlisting a money transfer company in the UAE, the first and most important thing you need to determine is whether you can trust them.
Perform the necessary groundwork and investigate the service they offer. If any details seem too good to be true, then it’s a potential red flag.
Check whether the agency or bank is registered to undertake money remittances. Besides the standard company formation requirements in the UAE, see if they have an exchange business license issued by the Central Bank.
Exchange firms with this license fulfill all business standards, including risk management and security, customer protection, and anti-money laundering compliance.
2. Be aware of common remittance scams.
You’ll benefit from learning about common remittance scams. This way, you can identify and avoid agencies that engage in them.
Below are a few of the typical modus operandis you need to watch out for:
- Remittance through a specific person other than your intended recipient.
- Requiring your personal and secure bank details (e.g., OTPs, passwords, etc.).
- Refund request of an “accidental” money transfer to your account.
3. Check the fees and interest rates.
No one wants to pay excessive fees and interest charges, but you must also be wary of remittance firms that guarantee very low rates. Again, anything that seems unrealistic should be considered a red flag.
If cost is a significant factor for you, be sure to compare fees, interests, and foreign exchange rates across several providers. They set their own prices, so you’re bound to get a lot of different numbers.
To calculate the total remittance cost, you must also consider:
- Whether you’re getting a real-time exchange rate.
- All the fees you’ll be charged including those you can’t see.
- The total amount your recipient will receive.
Note that foreign exchange rates can vary depending on the currency and provider you use for the transaction.
4. Double check the remittance details.
Never forgo double-checking the details before you finalize the remittance. Make sure the sender and receiver’s name, address (email or home), phone number, and amount are complete and accurate.
And don’t forget to get confirmation of your transaction.
Check the transaction receipt and look for the tracking number. In most cases, you can use this code to monitor the status of your remittance online.
5. Rush into the process.
Unless it’s an absolute emergency, it would be best to plan your remittances ahead of time. This will help you avoid unexpected fluctuations in the exchange rate and excessive interest charges. It will ensure that you send the money to the correct account (see item No. 4).
In general, you should also avoid exchanging or transferring money on the weekends because markets in most countries are closed during this time.
Plus, not rushing into the process allows you to plan around recent events that could affect the remittance costs and processing time.
Changes inside and outside the UAE can affect the rates and fees you’ll carry when sending money abroad.
For example, after the United Kingdom’s withdrawal from the European Union was announced in 2016, the pound sterling dropped by 10 percent against the US dollar overnight.
Inflation can also influence exchange rates. Even the slightest variations can make a huge difference, especially when you tend to transfer large sums.
6. Check the estimated processing time of the remittance.
Before selecting a service provider, don’t forget to inquire about the average processing time of the money transfers. This should begin upon the confirmation of the transaction and end when the money reaches your intended recipient.
Even with public, non-working, and religious holidays, this information will give you a good idea of how long your loved ones or employees need to wait to receive the money you send.
Knowing what to expect in terms of remittance pathway and timeframe also lets you avoid last-minute glitches or detect and act upon any potential issues that may arise.
7. Forget to consider what’s best for you.
When sending money overseas, you must determine what’s most convenient for you and the recipient.
Analyze the factors like the interest rates, speed of processing, and mode of payment, and learn to prioritize.
Fast cash options may be hard to resist, especially in an emergency. However, this could be the best option for you even with higher interest rates if the money is needed as soon as possible.
However, you may want to reconsider more affordable alternatives if you send money regularly.
There are also cases when you need to transfer funds to different locations, like when paying remote staff salaries. In this case, you should consider teaming up with a provider that offers online transactions and access to the specific countries where your recipients live.
The key is to look for a money transfer company that can cover all your financial requests and other needs to help you and the recipient save time, effort, and money.
8. Look into customer service.
Although often overlooked, customer service is an essential part of remittance services you must never forget to check. After all, they are responsible for assisting you in case of internet outages, glitches, information input errors, and other mishaps that may delay the money transfer.
The customer service team must be responsive and well-equipped to help you with your queries. They should also be friendly and easy to talk to, especially when you cannot identify the root of the problem.
Safe and Secure Money Transfers
Outward remittances from the UAE grow every year, thanks to the diverse working population in the country.
Make sure your hard-earned dirhams reach your loved ones securely by keeping these dos and don’ts in mind.