Saudi Arabia and the UAE are among the world's largest sources of remittances, each sending close to $40 billion a year, and Kuwait, Qatar, Oman and Bahrain add substantially to the total. Foreign workers make up the large majority of the population in Qatar and the UAE and a majority of the workforce across the Gulf. Millions of households in South and Southeast Asia, East Africa and the Levant depend on these flows.

For payment firms in this market, much has changed since 2020. Digital platforms have taken share from exchange houses, compliance expectations have risen in every corridor, and correspondent banking has become harder to obtain.

Corridor economics

The GCC-to-Asia corridors, to India, Pakistan, the Philippines, Bangladesh, Nepal and Sri Lanka, carry the most transactions. Corridors to Egypt, Jordan and Lebanon matter by value. Corridors to East Africa are smaller but cost more to serve because of weak last-mile infrastructure and limited banking access at destination.

Providers earn money in two ways: the transfer fee and the margin built into the exchange rate. Exchange houses have traditionally earned more from the FX margin than from the fee. Digital competitors offer rates close to mid-market with a clear fee, which makes the full cost visible. The World Bank tracks the cost of sending $200 in each corridor; the most competitive GCC corridors, such as UAE to India, are now cheap, but corridors with little digital competition or weak banking at destination remain well above the global 3% target set in the UN Sustainable Development Goals.

Exchange houses under pressure

Exchange houses have been the main channel for Gulf remittances for four decades and now face pressure from several directions. Younger workers are moving to apps. Compliance costs fall hardest on smaller operators. And global banks have cut correspondent relationships with money service businesses, leaving fewer and more expensive options for settlement. Cash-heavy branch operations add AML risk at the point of intake, and every corridor needs compliance at both ends under different rules.

The FATF Travel Rule in practice

FATF Recommendation 16 requires originator and beneficiary details to travel with cross-border transfers above a threshold, usually the equivalent of about USD 1,000. GCC-licensed firms have generally built this into their sending systems. The gap is often at the receiving end: if the destination institution cannot receive the data, the sender must choose between sending incomplete information and refusing the payment. This is a live problem in some African and Asian corridors.

  • Check destination institutions' Travel Rule capability before starting or renewing a relationship.
  • Use SWIFT gpi for higher-value transfers to get end-to-end tracking and delivery confirmation.
  • Use a dedicated Travel Rule solution where virtual assets are part of the settlement chain.
  • Collect complete, structured sender data in the app or at the counter before the payment is submitted.

What digital competition has changed

Near-universal smartphone use among Gulf migrant workers, wider access to bank accounts and wallets in destination countries, and lower fees have all helped digital remittance grow. Telecom-backed providers such as STC Bank (formerly STC Pay) in Saudi Arabia have built large customer bases. International platforms such as Wise operate where they hold a local licence or work through licensed partners; entry barriers are higher than in Europe. Crypto-based remittance remains a niche: converting to and from local currency usually removes the cost advantage on the main corridors.

At the wholesale level, mBridge, the multi-CBDC platform run by the central banks of China, Hong Kong, Thailand and the UAE, could eventually offer an alternative to correspondent banking for some flows. Saudi Arabia is no longer a participating member, and any effect on retail remittance corridors is some way off.

Licensing for cross-border payment firms

  • Qatar (QCB): exchange house or payment service provider licence, with AML programme reporting to QCB.
  • Saudi Arabia (SAMA): payment institution licence (major or micro, depending on scale) or money exchange licence, with data kept in the Kingdom.
  • UAE (CBUAE): exchange house licence, or a retail payment services or stored value facility licence depending on the model, under the 2025 Central Bank Law.
  • Bahrain (CBB): money changer or ancillary service provider licence.

Correspondent banking comes first. Securing and keeping correspondent relationships is the most critical, and most often underestimated, requirement for a cross-border payment business in the GCC. Firms should map their correspondent access before applying for a licence, not after.