ACI report: UAE real-time payments scheme to boost economy

The launch of the UAE's Instant Payments Platform (IPP) in Q4 2022 is expected to accelerate the adoption of real-time payments (RTP) across the Emirates and drive substantial economic benefits for businesses and consumers, according to the findings of the report. 

When launched in Q4 2022, the UAE IPP will enable instant transfers between bank accounts 24/7/365. Participation is mandatory for all financial institutions in the country and the scheme aims to provide better payments services, promote financial inclusion, and increase financial stability in the UAE.

Prime Time for Real-Time tracks real-time payments volumes and growth across 53 markets. The report includes an economic impact study showing a clear correlation between real-time payments and economic growth. The research shows that governments that advance the real-time modernisation of their national payments infrastructure create a win-win situation for all stakeholders in the payments ecosystem: consumers and businesses benefit from improved payments services, financial institutions future-proof their business in a highly competitive environment by speeding up cloud-first and data-centric modernisation, and national governments boost economic growth, reduce the size of their shadow economy, and create a fairer financial system for all.

According to the report, 28 million real-time transactions were made in the UAE in 2021. This figure is projected to grow to an impressive 134 million by 2026, representing a five-year CAGR of 36.5%. Real-time payments accounted for 3.2% of overall non-paper-based transactions in 2021 and are expected to account for 10.4% of all electronic payments in the Emirates by 2026.

While Economic Impact data for the UAE is not available as the IPP scheme is not yet live, the clear link between adoption of real-time payments and economic growth has already been demonstrated by Saudi Arabia and Bahrain, two other GCC member states. In Saudi Arabia – a newcomer to real-time payments, with its inaugural real-time payments system, Sarie, launched by the Central Bank in April 2021 – early uptake resulted in real-time payments transaction volumes reaching 175 million in 2021. This led to estimated cost savings of USD 23 million for businesses and consumers and helped to unlock USD 166 million of economic output. In Bahrain where RTP is more mature, 142 million real-time transactions were made in 2021 and the strong uptake of real-time payments resulted in estimated cost savings of USD 39 million for businesses and consumers – which helped to unlock USD 246 million of additional economic output.

In addition to tracking developments in the real-time payments ecosystem, the report also analysed financial fraud trends. Over one in three (36%) UAE respondents reported fraud in 2021, up from 24.1% in 2020. Almost half (49%) of these were victims stated the fraud related to credit cards (stolen cards or in-person skimming). Unsurprisingly, as the popularity of digital wallets has grown, so too have cases of digital wallet account hacks which in 2021 accounted for 7.3% of all fraud. With 73.5% of UAE consumers holding mobile wallets, it will become ever more important for businesses and consumers to safeguard funds in mobile wallets.