Competition with licensed technology companies “temporary”

“Competition with licensed technology companies and telecommunications service providers in the field of financial transfers are unfair but temporary,” said Osama Al Rahma,

He explained to «Emirates Today» that the net profit of exchange companies, last year 2024, is due to several reasons, the most important of which is the acquisition of those entities on a share of the market by providing free services in exchange for increasing the number of dealers with them, as well as the increase in the cost of controls, regulatory standards and governance requirements, which led to the exit of a number of exchange companies from the market permanently.

According to the 2024 Financial Stability Report, issued by the Central Bank, the exchange sector in the country recorded a decrease of 25.6% in net profits, reaching 578.4 million dirhams in 2024. The Central attributed this in its report to the slowdown in the pace of revenue growth from basic activities, which was met with a total increase in 7.7% to reach 2.6 billion dirhams.

Osama Al Rahma said that despite the challenges, the exchange sector in the country is still one of the important and most reliable sectors in the field of financial transfer, pointing out that many large companies in the market are annually recorded a noticeable increase in the number of dealers.

He added that the licensed technology companies (known as “Vincte”), as well as the companies providing telecommunications services that provide financial transfers, provide their services at the beginning almost free, or with very reduced fees, in exchange for spreading and acquiring a share of the market, but this matter is temporary, and it is usually in the first period only for their work, and then begins to impose fees, similar to the regular exchange companies.

Al -Rahma pointed out that «exchange companies is keen to develop their technological structure, and it has options for rapid transfer through smart applications, but there are factors that play a role in increasing or decreasing demand, including times of seasons, strength or weakness of the dollar, meaning that the connection of the dirham with dollars makes many dealers delay the transfer operations and wait for its rise, and thus the dirham, to provide them with a greater value than the currencies of their countries, Thus, “Al -Rahma continued:“ Exchange companies have confidence that the current business model for competing companies will not last, and the market will take a path that tends to balance the services, the most important of which is the follow -up to the post -transfer, and the fees imposed on these services. ”

He stressed that the free transfer against the acquisition of customers, especially from the category that is not affiliated with the umbrella of the banks from the low -salary owners, is not a sustainable business model, and in the end, the companies that do so will put a tariff and fees to cover their expenses, as is the exchange companies.