Money transfer company Al Fardan Exchange is teaming up with US blockchain technology company Ripple to offer instant cross-border payments as exchange houses increasingly join forces with FinTechs to capture new customers and scale up their business offerings.
The partnership will allow Al Fardan's customers to remit money internationally in real time, the company said on Tuesday.
Al Fardan will join Ripple’s cloud-based global financial network, RippleNet Cloud, which allows financial institutions to move away from ageing and expensive legacy infrastructure and adopt the flexibility, speed and resilience of cloud computing without the burden of hardware management, it said.
“We are well into a digital future and payments powered by technology, which is becoming key in the region,” said Hasan Al Fardan, chief executive of Al Fardan Exchange.
“This partnership underscores our commitment to offer new channels and opportunities for people to remit money more securely, with more flexibility and convenience.”
Money exchange providers are increasingly partnering with FinTechs to cater to customers who now rely on the convenience of mobile apps to send money home rather than visit physical branches.
Remittances to poor and middle-income countries are projected to have grown 7.3 per cent to $589 billion in 2021, the World Bank said in November.
In GCC countries, the recovery of outward remittances was boosted by stronger oil prices and the resulting pick-up in economic activity, the Washington-based lender said at the time. Remittance flows increased by 9.7 per cent in the Mena region.
Remittances are projected to continue to grow by 2.6 per cent in 2022, according to the World Bank.
Meanwhile, outward personal remittances from the UAE increased 8.7 per cent, or by Dh3.6bn a year, in the second quarter of 2021, according to the Central Bank of the UAE.
Outward remittances through banks rose by Dh6.1bn while transfers through exchange houses dropped by Dh2.5bn.
“We are proud to partner … to leverage blockchain technology to revolutionise cross-border payments and the thriving payments industry in the UAE and the Middle East,” said Navin Gupta, managing director of RippleNet, South Asia and Mena.
The partnership will allow more customers to benefit from instant cross-border money transfer services through Al Fardan Exchange’s touchpoints, the company said.
“We will continue to tie up with FinTechs that offer inroads into brand new customer segments as we see our global processing and clearing capabilities allied with digital technologies, which will … lead to financial inclusion. We see this trend continuing as the UAE is positioning itself as a FinTech hub in the region,” Mr Al Fardan told The National in an interview in December.