UAE becomes key mobile remittances gateway

The mobile money service market is growing at "a phenomenal pace" globally, and the UAE is emerging as a key mobile remittances gateway in the GCC region.

The region has a huge potential for growth as the governments and regulators are keen to promote transparent and secure money transfers by migrant workers, according to Luup, a provider of mobile money transfer solutions.

With an exceptionally large migrant population, the size of the remittance market in the GCC alone is nearly $50 billion, of which a sizeable portion is still going out of the region through the traditional corridor of hawala, said Morten Hofstad, Regional Director Middle East, Northern Africa and Asia, Luup. If regulators and government in the region follow the initiatives taken by the UAE authorities in discouraging hawala and to bring more accountability and transparency in remittances, 99 per cent of remittances by salaried migrants would be through mobile money transfer system, he said.

Apart from ensuring accountability and transparency in transaction, mobile money transfer solutions will be both cost effective and time-saving for migrant workers who can complete the transaction within seconds with just one command on their mobile phones, he said.

Luup has already singed up with Emirates International Exchange and other two exchange houses to provide this solution.

A report by analysts Gartner states that mobile money transactions will total $4.5 billion by 2012 globally. The estimated annual growth of remittances in the GCC region alone is pegged at over 20 percent in the next five years, said Hofstad,

The region also has one of the highest mobile phone penetration rates in the world, as mobile phones are a key tool for these mostly unbanked migrants. "Based on the region's potential, the Mobile Money Transfer, or MMT, conference is a great opportunity to share experiences and ideas that can pave the way for mobile money transfer initiatives globally," said Hofstad.

At the MMT Global Conference in Dubai on Tuesday, Luup highlighted how it is establishing the UAE as a key mobile remittances gateway by partnering with companies’ across
 the region.

In a speech given together with the National Bank of Abu Dhabi, Luup shared the successful case study of the first launch of international money transfer using MoneyGram via mobile phones in the Middle East. Luup also pointed to its strategy of expanding the ecosystem further by building partnerships with countries receiving remittances from the GCC region.