The U.A.E. introduced its real-time payments system Immediate Payment Instructions (IPI) in mid-2019, focusing mostly on domestic volume and with no notable additions made since launch. Despite being supported by more than 70 institutions, its usage has not gained significant traction due to limited use cases and traditional preferences towards paper-based payment instruments. Consequently, real-time payments accounted for just a 0.8% share of total payments transaction volume in 2021.
However, the central bank is now in the process of launching a new and more comprehensive real-time payments scheme called Instant Payments Platform, which enables interoperable fund transfers between bank accounts and eWallets. The new system will also enable transfers using mobile phone numbers, email addresses and any other unique identifier. The launch of this new system will provide a much-needed boost to the country’s real-time payments market.
Real-Time Payment Types
Year of Real-Time
A sizable proportion of U.A.E’s payments activity is cash –based, but the market continues to shift toward modern, digital payment methods. Aiming to further accelerate the trend, 2021 saw the U.A.E Central Bank implement its NPSS (National Payment Systems Strategy), designed to make payment systems universally interoperable and foster the transition to a cashless society built around real-time payments.
Although the pandemic slowed things down, NPSS has further encouraged new fintechs to enter what was already a diverse and fast-paced market. Mashreq Bank’s digital wing, Mashreq Neo, is working to ensure tourists that arrive from India can pay merchants via their domestic UPI service, bypassing Visa, Mastercard and a host of major acquirers. Elsewhere, Emirates NBD’s Liv is targeting digital-natives with use cases utilizing WhatsApp Pay.
Although currently primarily working in the card business, these fintechs are aware of the great interest in and power of real-time payments. There’s a keenness to be early adopters in a payments market that shows huge potential for growth. Banks and payment players within this environment must respond accordingly. They need to be ready for an incoming real-time payments scheme likely based on ISO 20022. They must also be ready to expose payment-related businesses and services via APIs in order to fully participate in — and capitalize on — market-led innovations.
However, the previously noted announcement from Mashreq that it will soon start UPI acquiring will have alarmed the market’s acquirers. That is a huge amount of volume to lose and there is little time for them to respond. Our recommendation would be to stay focused: continue to modernize payment infrastructures to be ISO 20022-ready. The suggested API-first strategy would enable them — when the opportunity arises later — to bring to market real-time payment use cases that are also UPI-enabled.
Mobile Wallet Trends
% of adults who have a mobile wallet and have
used it in the past year (2021)
Real-Time Total Participants
F5 Yr CAGR
Payments Fraud Rate
Population who reported being a
victim of fraud in the last 4 years
Top 3 Payment Fraud Types
|% of fraud victims||Trend|
Card details stolen online
Bank account hacked
Card details stolen/skimmed in person
Share of Volumes by Payments Instrument
- Paper-based payments
- Electronic payments
- Real-time payments
Real-Time Payments Volume and Its Share in Overall Non-Paper-Based Transactions, 2015-26f
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The Need for Speed to Market in Consumer Payments - Payments modernization as a response to customer demand
Fraud Management Insights
Expanding the Horizons of Fraud Detection - The Network Intelligence Approach to Machine Learning
Defining and Building the Next-Generation Payments Hub - Global survey report from ACI Worldwide and Edgar, Dunn & Company
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