Millions of expats in the UAE regularly send money overseas. As one of the world’s leading remittance hubs, the UAE sees billions of dirhams sent abroad each year. So, how can you make international transfers in the most affordable, secure, and efficient way? The secret lies in understanding the exchange rate offered and knowing the fees involved.
Understanding Exchange Rates
When you see an exchange rate on Google, it’s the “mid-market rate” or the interbank rate used by banks. However, many providers apply a markup—often 2-4%—which can cost you hundreds of dirhams on larger transfers. For instance, sending Dh10,000 to India at a rate just 1% below the market rate means losing Dh100 instantly. Always verify the offered exchange rate against the mid-market rate.
“Generally, banks don’t offer the best rates,” says Steve Cronin, founder of DeadSimpleSaving.com. “Digital banks and exchange houses usually provide better rates due to lower overheads and competitive pricing.” Wise is often recommended for its competitive rates. “We believe in fair and simple pricing. Our customers see the mid-market rate with Wise,” a spokesperson told Khaleej Times.
Hidden Fees
Fees can be unexpected. There might be an upfront fee, but also hidden ones like the ‘correspondent banking fee’. Your bank might claim no fees, yet a smaller-than-expected amount may arrive due to fees from intermediaries. Additionally, there are ‘receiving bank fees’. Even if your bank has an upfront fee, the recipient’s bank might charge extra. Be cautious with “zero-fee” transfers, as high exchange rate markups can make them costly.
Careem Pay facilitates international transfers from the UAE to over 30 countries. “Careem Pay was developed to tackle high fees, slow transfers, and unclear rates in the remittance market,” says Mohammad El Saadi, Careem Pay VP. “We offer rates up to 50% cheaper than banks, with consistently low fees.”
Timing Transfers
Exchange rates fluctuate constantly, so timing matters. Apps like Wise allow you to set alerts for favorable rates, helping you transfer when the dirham is stronger against your home currency. Careem Pay initiates transfers within seconds via the app, with in-app rate alerts assisting customers in choosing the best transfer time.
Lack of transparency inspired Wise’s founders 14 years ago after they encountered hidden exchange rate markups. Now, with over 15 million customers, Wise emphasizes transparency. “Banks often advertise zero fee offers and ‘market-leading rates’, hiding the fact that they profit from exchange rate markups, making it difficult for consumers and businesses to comprehend the actual costs,” a spokesperson adds.
Top Providers
According to DeadSimpleSaving.com’s Cronin, Interactive Brokers and Revolut offer some of the best rates globally. “Interactive Brokers is a brokerage focused on investments, not just currency conversion. Transfers are only possible to or from accounts in your name, and they accept major currencies including UAE dirhams,” he explains.
Financial experts also recommend CurrencyFair, Lulu Exchange, and GC Partners. “If exchanging a large sum, pay close attention to the exchange rate offered and seek the best deal,” Cronin advises. RemitFinder aggregates exchange rates from multiple UAE providers, aiding in comparison and finding optimal rates. For speed, Careem Pay reports transfers completed in as little as 11 seconds, with most finalized in under 60 minutes.
What about using cryptocurrencies to transfer money, bypassing middlemen and fees? “Stablecoins, a more stable cryptocurrency type, can avoid hefty cross-border fees, but you may still incur high costs for converting between fiat and crypto.”
