Oman

ACI’s Take

Recent years have seen a flurry of activity in Oman’s digital payments space, with new platforms, solutions and networks that aim to integrate payments more deeply with people’s lives. Consumers and businesses alike have responded well to services that help them retain control over finances while reducing friction, not least in a world where the pandemic boosted demand for contactless payment.

Although real-time payments are not there yet, the CBO’s introduction of MpClear continues to provide opportunities for modernization. The mobile payments clearing scheme was the first of its kind in the GCC region. It enables interoperability and unified switching and clearing services among mobile wallets and banking services operated by various banks in the Sultanate. Although there was initially relatively little innovation during early adoption, MpClear is now being used for low-value P2P transfers that also enables POS acquiring.

The latter is achieved through the dynamic generation of a QR code on the POS, scanned using the Bank Muscat mobile app. Payment is then pushed to the merchant account as a P2P. Although a good step toward real-time transformation, this is a low-volume, wallet-to-wallet system with a low payments limit. It is unclear at this time whether the CBO will implement full real-time rails, unlike others in the region, with the organization appearing happy with what it has today in MpClear.

Such a stance impacts the wider industry since everything in Oman’s financial system revolves around what the central bank does. If the CBO is reluctant to boost transformation, opportunities for innovation are limited. But there are still some openings for fintechs, such as enabling WhatsApp Pay. What’s needed now is for the great potential in Oman to be realized, through banks gaining access to flexible, modern, agile systems that support and accelerate modernization and keep pace with the rapidly evolving demands of Oman’s increasingly sophisticated banking population.