Low oil prices have dampened remittances from the Gulf Cooperation Council (GCC) but Qatar has defied the trend with a 22% month-on-month growth in September this year and it is the best performing GCC country for Xpress Money, a global money transfer service provider.
“The brand has been witnessing a steady growth in Qatar, in excess of 20% for the last few years. In the wake of dampening remittances from the GCC, Qatar is still posting good growth numbers – this is a clear indication of a vibrant economy and the country’s attractiveness for international talent,” Xpress Money chief operating officer Sudhesh Giriyan said.
Though the World Bank has stated that weak economic growth and low oil prices have dampened the growth of remittances from the GCC, Xpress Money’s business has seen Qatar defy this trend, he said, adding the company has invested in developing a strong network of over 100 locations across the country to cater to the increasing demand for its services.
“The country’s futuristic growth plans and the FIFA World Cup 2022 have seen an extremely positive impact on the country that is sure to see a further upward trend in the years to come,” he said.
In 2015, remittances from Qatar stood at $10.4bn, with over 70% being received by South Asian countries, Xpress Money said, adding “this trend is likely to continue in 2016 as well, with South Asian countries benefiting the most from Qatari remittances.”
Giriyan stressed on the opportunities that social and mobile channels create for conventional money transfer brands in the GCC.
“Despite relentless digital innovation, 94% of the remittance industry is still brick and mortar. I foresee a healthy collaboration between digital channels and the very robust networks that conventional money transfer brands have built over the years. The end result of these new partnerships is massive value for the consumer, which in turn will be very healthy for the remittance industry,” he said.
Highlighting that the remittance market could also benefit from block-chain adoption, a recent report by Booz Allen Hamilton had said the GCC account for an estimated $98bn in annual outward remittances, which are likely to continue to grow due to the large size of migrant workers.
Given the scale of the remittance market in GCC countries, this is an area that merits further exploration by banks and exchange houses alike, it said.
At present, transaction costs are relatively high and take at least two-three days to clear, reflecting the complexity of the clearing and settlement, particularly for banks which typically rely on correspondent networks, the report said.