Instant Payments in the UAE: Anticipated Sector Development

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    Banks in the UAE are adopting new real-time features for bank transfers, but a few questions remain about its feasibility and potential adoption

    Yasser Imam

    Senior Consultant — Middle East Lead

    Banks in the UAE are adopting new real-time features for bank transfers, but a few questions remain about its feasibility and potential adoption. How rapidly will clients transfer their business to digital? Will instant payment drive clients away from the historical reliance on payments by cheques and cash and to a lesser extent cards? Are banks across the UAE ready to pounce on this opportunity in instant payments?

    The Central Bank of the United Arab Emirates (“CBUAE”) began launching an Instant Payment Platform (IPP) in 2022, which is being implemented in stages, with several milestones set to conclude by the fourth quarter of 2023 or the first quarter of 2024. Many banks are connecting to the IPP via the help of global payments infrastructure company ACI Worldwide, as per their 2022 announcement.

    Following global trends, the IPP is part of the broader National Payment Systems Strategy (“NPSS”) that CBUAE launched in 2021, which represents the UAE’s transformational payments framework for the future and revolves around four pillars:[1]

    1. Encourage a real-time and seamless access to payments 24/7/365;
    2. Enable competition to decrease costs and inefficiencies;
    3. Boost the economy by enabling instant payments; and
    4. Establish the foundation for open banking.

    Instant payments have been available in the UAE since July 2019 through the Immediate Payment Instruction (IPI) system, whereby consumers can make instant bank transfers of UAE Dirham (AED) to another UAE bank account. In 2021, the system generated 21.1 million transactions, equivalent to USD 14 billion and proved to be a major step in the modernization of payments in the country.[2]

    However, under the IPI, instant payments are only available during regular business hours—consumers can not send money at night or on the weekends—creating inefficiencies and headaches for individuals demanding accessible payments.

    The IPP initiative solves this pain point by enabling instant money transfers 24/7/365 and is expected to capture billions in repressed demand for payments taking place outside business hours, most significantly for businesses operating on the weekend. With this improvement, growth forecasts expect the market to reach a historic 134 million real-time transactions in the UAE by 2026, up from the level of 28 million in 2021.[3] As a share of overall transactions, real-time payments are expected to rise from less than 1% of all payment transactions to nearly 4% over the 2022-2026 period, winning share from paper-based (i.e., cash and check) transactions[4].

    Challenges and Opportunities:

    Both the IPI and the IPP are important steps toward modernizing the UAE’s payment system, and accumulated volume of instant payments represents demand for digital payments. Yet, large swaths of the population still adhere to legacy payment methods, primarily checks, as well as cash. For example, instant digital payments have been widely adopted by large companies, while some small & medium enterprises (“SMEs”) still rely on cheques for example for their respective rent and supply payments.

    Second, payments by cheques – and to a lesser extent cash – and how to digitize them, encouraging migration to other payment methods, is on everyone’s agenda. Checks have been a popular option for both consumers and small businesses, since traditional bank transfers require a fee. Banks are devising a way to connect banks issuing checks with check processors through a digital network, enabling information to be exchanged digitally and instantaneously, obviating the need to print checks. In this regard, the electronic cheque (“e-cheque”) is part of the IPP, whose implementation is underway to address such issues. It is worth mentioning that neighbouring Bahrain has been implementing its e-cheque system – known as the Bahrain Electronic Cheque System (“BECS”) – since 2021 to promote sector digitization and complement traditional paper cheques[4].

    Third, one of the core components of being able to compete in the digital payment space is having the technology required to support the scale and dynamism of instant payments. For example, if a bank wants to enable an e-commerce marketplace with tens of millions of sellers and customers, they face a challenge in their ability to provide real-time data and support 24/7/365 payments without any interruptions. Such technological upgrades for banks not only mean allocating higher budgets, but also having the right tech team, the right tech budget, and the willingness to invest.

    In general, banks in the UAE are making progress in this area. In terms of preparedness for IPP, banks – whether multinationals, locals or regionals – have in general invested in technology and are well positioned to take on such payment developments. In this regard, they are equipped with top core banking systems ranging from Temenos and Oracle FLEXCUBE through to Finastra and Finacle. However, small financial institutions with limited resources risk falling behind the trend for the inability to make the proper investments.

    Given the embedded nature of legacy payment systems, older channels will likely exist alongside newer modern forms for years to come in the UAE. Banks see the opportunity to modernize and are working swiftly to do so.  They see a huge untapped potential for banks with the IPP implementation, and they are gearing up to pounce on this lucrative opportunity. Being part of the IPP scheme will allow banks to leverage real-time payments to target new customer segments, offer differentiated services to end consumers and merchants, and drive revenue through new use cases[5].

    Next Steps

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    PCMI specializes in global payments market research and intelligence for Asia (including China, India, Indonesia, Japan, Singapore, Malaysia, Philippines, Australia, and more), Europe (UK, Spain, Portugal, France, Italy, Germany, Poland, Sweden, Turkey, and more), Africa (Egypt, Morocco, Kenya, Nigeria, Ivory Coast, Ghana, and South Africa), and of course, Latin America and the Caribbean (LAC), a market for which which we have produced hundreds of payments market studies in just about every country.

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    [1] Source: What You Need to Know About the Launch of Real-Time Payments in the United Arab Emirates, ACI Worldwide,

    [2] The Paypers, 2022.

    [3] ACI report: UAE real-time payments scheme to boost economy, The Paypers,–1256270 

    [4] Source: What You Need to Know About the Launch of Real-Time Payments in the United Arab Emirates, ACI Worldwide,

    [5] Source: GCC Business News,

    [6] Source: What You Need to Know About the Launch of Real-Time Payments in the United Arab Emirates, ACI Worldwide,

    Yasser Imam
    Yasser Imam

    Yasser is specialized in the region of the Middle East and Africa, executing hundreds of financing and advisory engagements for leading clients in the region. He is an accomplished banking and finance professional, with more than 22 years of experience.