30 June 2024
Tell us about Al Etihad Payments, your mission, the structures you manage and your role in the UAE financial ecosystem.
Al Etihad Payments (AEP) serves as the UAE’s national payments infrastructure and is a subsidiary of the Central Bank of the UAE. AEP’s mission is to develop and implement world-class payment services that enhance financial inclusion and promote financial stability. We cannot do that alone, so our systems act as enablers for Licensed Financial Institutions (LFIs) in the UAE to offer the most innovative payments services to their customers.
Only together with the LFIs, AEP can play its pivotal role in realising the UAE’s vision for a digitally advanced and inclusive financial ecosystem.
AEP core objectives are focusing on driving financial inclusion, promoting payment innovation, enhancing security and efficiency, and reducing the cost of payments. As the operator of financial payments market infrastructure, we manage critical payment systems like the new instant payments platform Aani, UAESWTICH and the UAE Wages Protection System (UAE WPS), all central to the UAE’s financial ecosystem. AEP will also manage the UAE’s new domestic card scheme, called Jaywan, and we are launching the Open Finance Platform.
Describe how your “building together” philosophy is key to your creating an ecosystem around your products and initiatives?
At AEP, inclusivity is intrinsic to our approach. We believe in engaging diverse stakeholders, including banks, other licensed financial institutions, fintechs, merchants, regulators and consumers, to build a robust and inclusive financial ecosystem. By cultivating collaboration and partnership, we ensure that our initiatives cater to a wide range of needs, driving mutual growth and innovation. Through workshops, training sessions and ongoing dialogue, we empower ourselves and our ecosystem partners with the knowledge and tools needed to maximise the value of our platforms. Our philosophy of “building together” emphasises shared success and mutual benefits, creating a culture of trust and collaboration within the ecosystem. By staying responsive to market trends and technological advancements, we ensure that our ecosystem remains resilient and adaptable, capable of evolving with the industry’s needs. Ultimately, all that for the benefit of people and businesses in the UAE.
How do you solve the challenges that come with adoption?
The new generation real-time payment systems offer transformative benefits to end-users, but their convenience and speed comes with new set of challenges. To ensure success, it is essential to address these challenges together as an ecosystem, while continuing to innovate and maintain security and trust of the users. We launched Aani in October 2023, with the set of pilot participants, and we have seen a gradual uptake in adoption. Scaling the adoption of Aani, onboarding dozens of other participants, enabling Point of Sale (POS) acceptance, and creating awareness are some of the focus areas for us in 2024.
Building a robust, mission critical national infrastructure is obviously the top priority.
This involves creating strong, reliable and far-reaching networks, and continuously enhancing the existing systems to ensure transactions are processed smoothly and quickly. For example, in the case of Aani, we invested heavily in technology underpinning the platform, making sure that it can handle the demands of instant payments without ever skipping a beat.
Balancing convenience with security is another critical focus. While we aim to make payments as easy as possible, we must also protect against things going wrong. The level of sophistication of fraudsters continues to increase and we need to keep up by implementing strong security measures and sophisticated integrated fraud management systems together with the participants. That way we can keep customers’ transactions safe without sacrificing speed or convenience.
Educating consumers about the benefits of instant payments is also important. Raising awareness and providing clear, accessible information help to build trust and confidence among users. We conduct extensive outreach campaigns to learn from the market and to help users understand the benefits and safety of our digital payment solutions.
Please detail Aani’s growth since launch and the upcoming milestones for the instant payments’ platform
Since its launch, Aani has become an essential tool for daily transactions, allowing users to make instant fund transfers using just a mobile number, email or QR code, thereby eliminating the need for complex IBANs. Aani enhances the user experience by guaranteeing the processing of transactions in less than 10 seconds and providing immediate feedback on the success or failure of each transaction. The money received by the payee can be used immediately.
The growth of Aani can be observed on two fronts: the ecosystem and consumers. On the ecosystem side, Aani has successfully onboarded a substantial number of partners. In 2024, our goal is to expand this network further by bringing more LFIs on board, making Aani even more accessible to all customers.
On the user side, we have seen remarkable growth. During Ramadan, for instance, Aani experienced a 19% increase in the number of transactions and a 24% rise in transaction value during the observed salary cycle. From March 25th to April 5th, there was a 41% increase in the number of Aani transactions and a 44% increase in the transaction values.
These figures indicate a strong positive sentiment towards Aani and its adoption among users. We anticipate continued large-scale growth throughout 2024 as we further develop and expand the platform. The anticipated rollout of Aani across the POS solutions will further fuel Aani’s growth.
What are some of the upcoming initiatives and launches AEP will be rolling out?
AEP is working with the LFIs to further innovate and enhance the financial services of the UAE. By continuously expanding and enhancing our own platform, we aim to enable the LFIs to provide UAE residents and businesses with the most secure, efficient and user- friendly financial platforms available. These efforts are crucial in maintaining the UAE’s position as a global leader in digital payments and financial services.
Following the launch of Aani, we are now geared up to launch the UAE’s Domestic Card Scheme, Jaywan. This initiative aims to promote card transactions within the UAE, ensuring that payment-related data is processed and stored domestically and at low cost. By keeping the processing infrastructure and data within the national borders, we expect to enhance both the efficiency and security of card payments. Jaywan not only complements the set of secure and convenient payment schemes that AEP offers, but also aligns with the UAE’s broader economic and financial objectives, supporting growth and stability.
Additionally, we are making significant progress with the launch of the UAE’s Open Finance solution. This initiative will put customers in control of their financial information, allowing them to securely share their data with third-party providers and benefit from it. By enabling this secure data sharing, we pave the way for more personalised and innovative financial services, enhancing the customer experience and putting the customers in charge. Following the implementation of Open Banking, we plan to extend this initiative to Open Insurance, which will integrate insurance services into the digital financial ecosystem. These steps will ensure that users have a seamless and secure experience, embedding all financial services more deeply into their everyday lives.
How will the development of advanced payment services and infrastructure change the financial dynamics of the UAE?
I strongly believe that the implementation of our advanced payment services and infrastructure will change the financial landscape of the UAE, ushering in a new era of efficiency, accessibility and innovation.
As AEP and our partners continue to spearhead the development of cutting- edge payment solutions, we anticipate significant transformations in the dynamics of financial transactions and services across the country.
By leveraging modern technologies and rich payment message standards, like ISO 20022, AEP aims to streamline end-to-end payments processes, reduce transaction costs and enhance security, thereby nurturing a more vibrant and inclusive financial ecosystem. Our commitment to providing secure, efficient and accessible payment infrastructure truly aligns with the UAE’s ambition of becoming a global leader in digital payments.
These advancements will not only facilitate seamless and convenient transactions for individuals and businesses but also stimulate economic growth and drive social progress. We have a vision to empower consumers, regardless if they have a traditional bank account, a wallet or a salary card, with innovative digital payment options and facilitating real-time transactions that can even cross borders. That way AEP contributes to the transition towards a society less reliant on cash and reinforces the UAE’s position as a hub for financial innovation and excellence.
Furthermore, the development of advanced payment services opens doors to new opportunities for fintech innovation and entrepreneurship, fueling economic diversification and job creation. As AEP continues to evolve and innovate, we remain committed to driving positive change in the financial dynamics of the UAE, unlocking new possibilities and empowering individuals and businesses to thrive in an increasingly digital world.
What strategies does Al Etihad Payments have in place to keep pace with the rapidly evolving world of payments?
We understand that staying relevant in the dynamic digital payments landscape requires a multifaceted strategy that emphasises innovation, adaptability and collaboration. Our commitment to ongoing technological advancements ensures that our platforms consistently remain at the leading edge of digital payment solutions. A prime example of our innovation in action is the Aani platform. Aani’s success is rooted in its collaborative approach with LFIs and other payment service providers. This collaboration allows the platform to evolve in tandem with the shifting landscape, ensuring it remains an integral part of the broader financial ecosystem. We cannot do any of this alone. Our multifaceted collaborative approach - combining innovation, strategic partnerships and adaptability - ensures that AEP’s solutions remain at the forefront of the digital payments industry. By continuously evolving our platforms and maintaining strong partnerships, we ensure we meet the challenges of the future and drive the UAE’s financial ecosystem forward.
Can enhancing payments processes feature in the growth of economies and what is AEP’s role in advancing financial inclusion in the UAE?
In today’s digital economy, enhancements in payment systems play a pivotal role in driving economic growth and societal advancement by providing low- cost, convenient and secure payment infrastructure to the diverse range of customers of all LFIs. We want to empower individuals, businesses, corporate entities and government departments to benefit from the same advanced digital financial services regardless if they choose to use traditional bank accounts, wallets or solutions from other licensed providers.
By offering friction free, efficient and inclusive payment solutions, AEP contributes to economic growth by facilitating easier and faster transactions, reducing transaction costs and increasing financial transparency. This is our commitment to advancing financial inclusion in the UAE. We support the transition towards an economy that is less reliant on cash, has a strong digital financial literacy and is accessible for all.
Moreover, in AEP’s role as the enabler, our platforms drives innovation and entrepreneurship in the fintech sector, promoting economic diversification and job creation. By democratising access to financial services and promoting financial literacy, AEP empowers individuals and businesses to participate more actively in the digital economy, thereby contributing to the overall growth and stability of the UAE.
What would you say is the number one aspiration and the long-term goal of Al Etihad Payments?
The primary aspiration of Al Etihad Payments is to establish itself as a world- leading payments authority, providing excellent, innovative and reliable payment solutions that help to enhance financial stability and inclusion. Our long-term goal is to be the driving force in the UAE’s journey towards a digital first economy, setting global standards for payment services and infrastructure.
We aim to achieve this through continuous innovation and broad collaboration. By developing advanced payment solutions and creating strong partnerships with LFIs, we aspire to bring a significant collective contribution towards the UAE’s economic ambition. Our focus is on creating a secure, efficient and inclusive financial environment that not only meets the needs of today but also anticipates the demands of the future. We want to feel proud that we are seen as a valuable national asset.
Ultimately, we strive to be a benchmark for excellence in the financial sector, ensuring that the UAE is recognised globally for its leading payment systems and infrastructure. Our commitment to these goals drives everything we do at Al Etihad Payments, from the development of new technologies to the enhancement of our existing services.
