The Central Bank of the United Arab Emirates (CBUAE) has announced a plan to launch an Instant Payment Platform (IPP) in 2023 to facilitate financial transactions. As per a CBUAE statement, the new Instant Payment Platform (IPP) is set to be implemented in a phased approach and is expected to launch in the first quarter of 2023 with a pilot group of licensed financial institutions.

Discussed in a Central Bank of the UAE meeting with banking sector CEOs and the country’s Foreign Exchange and Remittance Group representatives, the initiative is set to enable payments processing and fund transfers in the UAE both around the clock and in real time. The UAE and instant payments As per the bank’s statement, the meeting highlighted the digitalisation of the financial sector and its ambitious targets, as well as the implementation of the payment platform, with the IPP seeking to help ensure electronic payments in the UAE in a safe, innovative, and convenient manner. Furthermore, the platform is believed to not only benefit consumers and businesses in the region, but also further the UAE’s journey towards becoming a cashless economy.

When it comes to services that enable customers to carry out real time cashless payments, there has been an increased demand in the UAE. As per information quoted by Zawya, according to the central bank, in 2021 alone, an approximate of 21. 1 million transactions worth USD 14 billion (AED 51.

7 billion) were moved through the Instant Payment Instruction (IPI) system, over a twofold increase from the preceding year. IPI gives customers the option of making instant payments in the UAE currency to another UAE bank account. The new platform is thought to enable the provision of the next generation of payment services to UAE financial institutions and consumers.

The CBUAE highlighted the importance of financial institutions as well as of eligible payment services providers to ensure their readiness to have the Instant Payment Platform adopted in accordance with the approved action plan. Furthermore, the CBUAE showcased the value of the role exchange houses play within the region’s financial system, with the bank having encouraged mutual collaboration with the banking sector to further support financial consumers, as well as the transformation of the financial infrastructure and national payment systems. CBUAE officials advised that the bank is looking to implement ambitious initiatives in ‘financial infrastructure transformation and national payment systems in close cooperation with the financial industry officials’, with the enterprise calling to action the financial sector to implement these functionalities and have the benefits transferred to financial consumers.

Past developments of the UAE Instant Payment Platform As per a May 2022 ACI Worlwide report on real-time payments, in 2021 there were 28 million real-time transactions made in the UAE, with the figure projected to grow to 134 million by 2026, accounting for a five-year CAGR of 36. 5%. Furthermore, real-time payments accounted for a 3.

2% of overall non-paper-based transactions in 2021, with the figure expected to change for 10. 4% of all electronic payments in the Emirates by 2026. The UAE Instant Payments Platform (IPP) is set to enable instant transfers between bank accounts 24/7/365, with participation mandatory for all financial institutions in the country.

The scheme is expected to offer core payments and overlay services of the likes of Request to Pay, built on top of the new instant payment rails. In January 2022, ACI Worldwide announced that it had been selected as a CBUAE partner towards the building of the country’s domestic real-time payments scheme. Shortly after in February 2022, the CBUAE selected Accenture to lead a consortium of companies and help with the execution of its National Payment Systems Strategy.

As per the announcement, Accenture will collaborate with SIA, part of Nexi Group, and G42 to build and operate the IPP for a period of five years. Part of the scope of the consortium’s work as detailed at the time was that of migrating existing payments systems, operating the target financial market infrastructure, and providing the data centre infrastructure. Furthermore, the companies were also given the responsibility of delivering overlay services of the likes of overhauling current platforms, systems and two active cloud-data centres and related infrastructure, in addition to delivering new capabilities such as e-checks to digitalise check-based payments, and a payments application to accelerate adoption.

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