Al Fardan’s partnership with Thunes to boost cross border payments for retail and business

Al Fardan Exchange has entered a partnership with Thunes, a global cross-border payments company, to enable its UAE customers make seamless payments to 87 countries. The new partnership will allow Al Fardan Exchange’s business and retail customers to make instant payments directly not just to bank accounts, but also mobile wallets and cash pickup points in in Europe, Africa, Asia Pacific and Latin America, enabling recipients to receive money in their local currency. Aside from speed and convenience, businesses and individuals will benefit from enhanced transparency of the service, they will know exactly what they’re paying upfront, and will be able to track the status of their transactions in real time.

These new services tap into growing customer demand for alternative payments and positions Al Fardan Exchange at the forefront of UAE’s rapidly evolving financial services space.

We reached out to Hasan Fardan Al Fardan, CEO at Al Fardan Exchange to find out more.

Al Fardan explained, “Despite a range of global challenges witnessed in recent years, the UAE has continued to remain one of the top tourist destinations thanks to the country’s ongoing development and attractions. As we continue to see the demand for tourism on the rise, and an influx of tourists arriving in the UAE, FX remains one of the key services being used by travellers. As the primary population in the UAE consists of working expats, we see that remittances for savings, investments, and family support have remained the key drivers of cross-border payments outside the country.”

Retail customers continue to dominate the sector, accounting for 98 percent of transactions made, however, the volume-side is a much different story with the corporate and business segments making up 51 percent of transacted volumes. Al Fardan’s business segmentation is in line with the industry.

Why do these businesses use an Exchange House instead of a bank?

Exchange houses focusing on remittances are much more innovative around the product, services, and process in comparison to banks, pointed out Al Fardan. By investing in technology, exchange houses gain direct access to local payment rails in major countries, enabling them to develop and grow payment routes that are much faster, lower cost, and provide increased visibility to businesses for cross-border payments against trade, salaries, and investments primarily.

Alternatively, banks are more focused on the liability and asset side, continuing to use the legacy correspondent banking model to move money overseas, resulting in a higher transaction cost and poorer levels of customer satisfaction.

Convenience and flexibility are key contributors to the popularity of exchange houses as they operate 365 days a year and 16 hours a day, and with direct access to local payment rails, the credit to beneficiary accounts happens much faster than traditional banks.

Businesses capitalise on the innovation and investments made by major exchange houses like Al Fardan Exchange by offering them low-cost and faster delivery of their cross border business payments, helping them save money while ensuring their goods are released promptly from suppliers.

Al Fardan says, “We are thrilled to partner with Thunes, a globally renowned institution that powers payments for the world’s fastest-growing businesses. As a customer-centric organization, we are always focused on providing seamless end-to-end experiences for our customers. This collaboration with Thunes will further digitize our payment services and help boost our business growth strategy.”

So, what are the safeguards against laundering?

In recent years, the UAE has evolved greatly, not only in terms of its infrastructure but also within the regulatory and payments environment. We’re seeing an increased focus on global compliance best practices, driven by the country’s regulator which has been proactive in constantly revising the standards governing exchange companies.

Today these standards are in-line with and sometimes excelling compared to some of the highly developed economies, forcing some of the ‘old-school ‘exchange houses to ultimately sell their units or cease business operations due to the increased investment in compliance and Anti-Money Laundering (AML) systems.

We have seen a reduction in the number of exchange houses operating, down from more than 130 in 2016/2017 to double digits today.

Reputation and lifespan are the key factors to review before any business decides to use an exchange house for their payment needs. Remittance is a service-orientated sector that remains the cornerstone of major businesses in the UAE, influencing their decision on which exchange house to use.

These new services in partnership with Thunes will tap into growing customer demand for alternative payments and positions Al Fardan Exchange at the forefront of UAE’s rapidly evolving financial services space.