UAE processes $3B transactions

Central Bank of the United Arab Emirates (CBUAE) releases 2021 Financial Stability Report Report Measures taken to mitigate the impact of the pandemic on the country’s economy were detailed this month. Despite the bleak macroeconomic picture and rising inflation, the CBUAE expects a “positive outlook” for the UAE’s financial system this year.

As far as CBUAE’s payment systems are concerned, they remain “robust without disruption” in 2021, aided by the acceleration of digitalisation in financial services. This resulted in a total of 231 million transactions being processed last year, totalling AED11 trillion ($3 billion).

read more: UAE’s growing role as regional fintech hub

“In particular, the Immediate Payment Instruction system (IPI), which provides real-time instant domestic funds transfers, saw a significant increase in transaction volume, confirming the trend of higher usage of digital payments than traditional funds transfer methods,” the report noted.

CBUAE also reported plans to join the Arabian Gulf System for Financial Automatic Fast Payment Transfers (AFAQ) as part of a scheme to facilitate cross-border payments and to enable financial institutions (FIs) operating in the UAE to use its processing with other GCC banks ‘s transaction. national currency.

AFAQ connects the payment systems of six central banks in six Gulf Cooperation Council (GCC) countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates).

Also read: PYMNTS GCC Series: High smartphone penetration, government support drive fintech growth in UAE

In addition to the GCC, CBUAE also works closely with the Arab Monetary Fund’s centralized cross-border payments system, Buna, which allows central and commercial banks in the Arab region to seamlessly send and receive cross-border payments in local and international currencies.

See also: UAE Central Bank starts issuing retail payment licenses

“Emirati dirham will eventually be used as settlement currency in both systems [AFAQ and Buna]which will increase the use of UAE dirhams abroad,” the report added.

The first phase of the National Instant Payments Platform (IPP), which aims to provide secure and convenient electronic payments to Middle Eastern countries, is also scheduled to start rolling out this October.

Learn more: The key to solving MENA banking challenges starts with regulators

“IPP has established [groundwork] Transforming the UAE’s financial services ecosystem. It represents the beginning of the next generation of payments services in the region, providing the flexibility needed to respond to a rapidly changing payments landscape,” the report said.

related: ACI Worldwide partners with banks to integrate instant payments in UAE

In January, PYMNTS reported on real-time payment software provider ACI GlobalSupporting 17 live domestic programmes around the world, including Zelle and TCH in the US, is helping national banks connect to IPP in the UAE.

“Announcing the establishment of a mandatory domestic real-time payments scheme for all financial institutions is a testament to the vision and ambition of the UAE Central Bank. It demonstrates the country’s commitment to continue to enhance the country’s global profile as a leading economic and financial centre,” ACI Worldwide Global Real-Time Payments Director Craig Gramsey said at the time.

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