UAE Central Bank joins GCC payments system Afaq to boost FinTech adoption

It offers customers financial transactions in local currencies and in real time with lower fees

The UAE Central Bank in Abu Dhabi. The regulator has joined the central banks of Saudi Arabia, Bahrain and Kuwait as members of Afaq. Photo: UAE Central Bank

The UAE Central Bank has joined the GCC's Afaq payments system as it aims to boost the growth and application of financial technology.

Afaq, which is operated by Gulf Payments Company, is a system linking payment systems in GCC countries, offering customers financial transactions in local currencies and in real time with lower fees.

The move to join Afaq “is in line with its strategic objectives of shaping the future of the UAE’s financial technology and digitisation journey through supporting innovation and payment systems initiatives”, the regulator said on Tuesday.

It will also “provide secure and instant payment platforms and enhance integration with the regional payment ecosystem”.

The Emirates joins the central banks of Saudi Arabia, Bahrain and Kuwait as members of Afaq.

Alongside the UAE Central Bank, Barclays has also joined Afaq to become the first lender from the UAE to sign up, joining a number of other banks from the other three GCC countries.

Other GCC central banks and commercial lenders will join in due course, “in line with an agreed work schedule”, the UAE regulator said.

Digital banking services become more popular after mobile transactions and FinTech services gained traction during the coronavirus pandemic, with consumers realising their advantages and flexibility.

They have also been important in helping customers gain full control when conducting transactions, managing their wealth and making investments at their convenience.

Gulf Payments was founded in accordance with a resolution from the 37th session of the GCC Supreme Council in 2016.

It has been given the mandate to build and develop a system that connects all payment systems in the GCC by establishing an independent company owned and funded by the central banks in the GCC, according to its website.

Its establishment is in accordance with the GCC charter and entails establishing “effective co-ordination, co-operation and integration between GCC member states in all fields”, the company said.

“This charter establishes and promotes the pursuit of achieving advanced stages of economic and financial integration among the GCC member states, establishing similar systems in different fields, including financial payment systems.”