According to a study by money transfer operator Western Union, 76% of UAE residents anticipate sending more money abroad in the upcoming year.
According to a survey of more than 1,000 UAE residents who make and receive cross-border money transfers, 6 out of 10 respondents listed family assistance as their top motivation for doing so, followed by 11% who stated saving for the future.
“The decision to remit is frequently highly personal. To help family and friends is one of the most frequent reasons why consumers send money, according to our data, too,” said Jean Claude Farah, president of Western Union’s Middle East and Asia-Pacific area.
“Therefore, it is only natural that family assistance takes precedence over everything else as senders relocate money as the global economic climate threatens affordable methods of life.”
Despite global macroeconomic headwinds, remittance flows to low- and middle-income countries are projected to rise by 5% annually to $626 billion in 2022, with India expecting to receive a record $100 billion this year, the World Bank reported earlier this month.
The Washington-based lender noted in its migration and development brief that the predicted growth in remittances for this year is somewhat less than the 10.2% growth seen in 2021.
According to a previous World Bank estimate, global remittance flows to low- and middle-income countries increased to $589 billion in 2021.
The top five countries to which remittances were sent were Egypt, China, Mexico, the Philippines, and India.
According to Western Union, 75% of UAE residents who receive money anticipate receiving even more over the coming year.
The survey found that 74% of those polled stated they need to transfer more money due to the greater cost of living in the country they send to, adding to the burden that rising living costs and currency fluctuations have on personal finances.
Seventy-one percent of respondents indicated they make an effort to send more money when the value of the local currency lowers.
34 percent of respondents stated they sent money quickly after payday regardless of the general economic situation, while 32 percent mentioned family requirements at home as the main motivators of money transfer flow and frequency.
As holiday seasons and other important occasions approach, the volume of remittance transfers also increases by about 6%, according to Mr. Farah.
According to the survey, about a quarter of customers said they concentrated on sending money on special occasions like birthdays, graduations, and anniversaries in addition to holidays like Ramadan, Christmas, New Year’s, and Diwali.
According to Western Union, 37% of UAE customers who receive money transfers claimed that holidays and other special events had the biggest impact on the frequency and amount sent, followed by family requirements (27%), and the timing of the sender’s paychecks (18%).
According to the poll, while 42% of respondents in the Emirates only send money through digital channels at the moment, 46% stated they would like to have the option to send money in cash or digitally in the future.
The receivers expressed a similar view. 43 percent of people only receive payments through digital channels at the moment, and 57 percent want the option to choose between digital and retail channels in the future.
The preference for face-to-face communication, followed by trust, was cited as the main deterrent to giving or receiving money online by those who do not use digital channels. They also mentioned a process or customer satisfaction as obstacles.
While the majority of consumers can be regarded to be “digital-first,” many still prefer to be able to pick between digital and retail options depending on their convenience and requirements, according to Mr. Farah.
But people need to be able to trust online services, and as a sector, we need to do more to assist people to get past their anxieties.