Only the United States ($56.3 billion), Saudi Arabia ($36.9bn) and Russia ($32.6bn) sends more money abroad than Dubai’s total of $19 billion, according to the World Bank, so it is no surprise that money transfer firms are scrambling to grab a slice of the action there.
MoneyCorp have stolen a march on their competitors by announcing last week the acquisition of First Rate FX, for an undisclosed fee. First Rate FX have an office in Dubai, which will be rebranded under the MoneyCorp name, and First Rate will also relocate from their Canary Wharf headquarters in London to MoneyCorp HQ in Victoria.
According to a MoneyCorp press release First Rate FX has been in the foreign exchange business for more than 13 years and completed more than 20,000 transactions on behalf of clients in 2016-17 alone.
MoneyCorp also announced that it will be opening a representative office in Dubai, at the International Finance Centre (DIFC), which will be licensed by the Dubai Financial Services Authority. From there the firm expects to target Dubai’s more than 7 million strong community of expats, providing a “full FX suite” to customers, which includes payments, FX spot contracts and foreign exchange risk management solutions.
MoneyCorp were keen to stress the attraction of their specialist digital payments platform and exceptional customer service, but the company is also pursuing an aggressive international expansion plan, both at home in the UK, and abroad.
Last year the firm acquired Commonwealth Foreign Exchange, a US based FX payments business, and purchased a 42.5% stake in Brazilian FX firm Novo Mundo. Meanwhile in the UK MoneyCorp has partnered with Sainsbury’s to provide their own brand money transfer service.
Nick Haselhurst, MoneyCorp CFOO described First Rate FX as a “fantastic UK based operation”, adding that “the establishment of a presence in the DIFC is a significant step forward for us internationally.”
Haselhurst described the UAE as “an area of huge importance for Private and Corporate clients in terms of foreign exchange and international payment requirements”, and said that he expects MoneyCorp’s “services and products will be taken up with huge success across the market.”
The World Bank estimates, published in 2016 and relating to data collected in 2014, suggest that remittance outflows account for 4.8% of the United Arab Emirates’ gross domestic product, highlighting the importance of money transfer to the region, and especially to Dubai, one of the world’s most popular destinations for foreign nationals, who accounted for 88.5% of the country’s population in 2013, according to Gulf News.
In 2014, India was the recipient of the largest amount of remittance inflows to developing countries, receiving $69 billion, with China ($64bn), The Philippines ($28bn), Mexico ($25bn) and Nigeria ($21bn) the next largest receivers.
The United Kingdom is in the top ten remittance senders ($11.5bn), but with with the scale of money transfer taking place elsewhere in the world, it is no wonder that firms like MoneyCorp, emboldened by the advances made within the financial technology, or “fintech” field, are racing to expand their operations globally.
When it comes to money transfer it’s clear that the Red Queen theory applies. If you are not constantly innovating and looking for ways to evolve, extinction becomes inevitable.