Dubai is the land of opportunity for many expats who come here to work and save money, especially from developing countries such as India, Bangladesh and Pakistan. It is therefore, not surprising that there is a great demand for money transfer services to and from these countries. Families back home want to be able to send money to their relatives living and working in Dubai. Similarly, every paycheck day, there are lines of expats waiting to send their hard earned money home to their families.
Previously, the only way to do this was to use the services of a bank, which could be an expensive option as it is likely to incur transfer fees. Banks also tend to offer lower exchange rates making this method of transfer less competitive. In addition to keeping track of transfer fees and exchange rates, many financial institutions have hidden costs often referred to as ‘back-end charges’. Taking into account all the above, the actual money that reaches family at home may end up being a lot less than anticipated.
Below is a list of money transfer methods with the pros and cons of each so that individuals wanting to send money home to India can look at the options and make an informed decision.
The traditional choice for money transfers to and from the UAE, banks provide a safe and time-tested method of transferring money to loved ones living overseas. Many of the local banks in the UAE such as Emirates NBD and Abu Dhabi Commercial Bank (ADCB) have links with a global network of banks and their branches including some of their own overseas branches in India.
Moreover, some banks provide one free transfer a month to your home country that does not incur a transaction fee. The disadvantages of using banks is that transfers take between two to four working days and transaction fees for transfers are significantly higher than those charged by exchange houses.
International banks such as HSBC have a larger network of overseas banks but often will charge even higher transaction fees compared to local banks. Senders also have to be very careful to provide the correct account information, swift code and other bank-related information to ensure that the money goes into the correct account. Banks will charge an additional fee for invalid transactions and this will eat further into the amount being sent home.
Money Exchange Services
A large number of expats use exchange houses to send money back home to their families. There are many exchange houses here in Dubai and although there is an insignificant difference between the exchange rates they offer, transaction fees can vary between exchange houses. The most popular exchange services in Dubai are UAE Exchange, Al Ansari Exchange, Al Ghurair Exchange and Al Rostamani Exchange; these exchange houses have many outlets including in malls for convenient access.
These exchange houses charge a fixed fee per transaction irrespective of the amount of money being transferred; however, transaction fees may vary from outlet to outlet and generally those located at malls charge a higher fee. Typically one can transfer any amount to their families back home unless the receiving bank in India has a ceiling on cash transfers. As with banks, transfers can take between two to four business days, so if you are looking for immediate money transfers, the best way is to use an express money transfer unit.
Express Money transfer agencies
Often, expats are looking to transfer money to their families within minutes; in such cases their best option is to use the services of an express money transfer outfit, the most popular of these with over 500,000 agent locations in over 200 countries is Western Union.
Western Union allows transfers to India via two methods: you can transfer money online using a Visa or MasterCard debit or credit card or you can transfer to a Western Union location. Money can be transferred literally within minutes. However, Western Union and other express transfer services do charge an additional fee for this service; the fee increases with the amount of money being sent and there is usually a limit on the amount of money that can be transferred at any one time.