Published: September 5, 2024
All six GCC states now operate a real-time payments programme, as part of a major governmental push towards a cashless, financially inclusive society.
The Middle Eastern payments landscape is evolving fast. Traditionally very cash-oriented, it is shifting in a more digital direction. According to the 2024 Prime Time for Real-Time report by ACI Worldwide and GlobalData, more than half the total transactions in in the region last year were electronic, accounting for 95% of total transaction value.
The report also found the Middle East is the world’s fastest growing market for real-time digital payments. Last year, there were 855 million such transactions in the region, or 12 per cent of all electronic transactions. That figure is projected to rise to three billion by 2028, roughly equal to 22% of all electronic transactions, at which point it will surpass Europe and North America.
“Consumers and businesses are increasingly using online banking, mobile wallets, and contactless payments,” Meshal Alobaid, Kuwait Financial House (KFH) executive manager of digital and alternative channels, tells EMEA Finance. “The rise in e-commerce has also spurred the need for robust digital payment solutions, leading to innovations in payment gateways.”
Money through your mobile
In June, KFH unveiled its own real-time payments service, WAMD. Accessible through the KFHOnline App, WAMD is a new digital service enabling customers to send and receive money via their mobile numbers, which are linked to their bank accounts. It was launched in collaboration with the computer network consultancy K-Net.
“The service allows customers to make the payments quickly without the need to remember or enter complex details like account or IBAN,” explains Alobaid. “They can send money to other customers in KFH or any other banks in Kuwait, since a mobile number is something most people already have and use regularly.”
Assuaging any concerns about security, Alobaid notes the service includes robust measures to safeguard transactions. It features SSL encryption protecting data transmitted between the two systems and digital signing that ensures data integrity and authenticity.
Users will also reap the benefits from a convenience perspective. Since transactions are completed within a couple of seconds, it eliminates any waiting around and is particularly ideal for urgent situations. It is also simpler and more intuitive than many other schemes of this nature.
“Other real-time payments schemes user experience can vary based on the platform and user interface of the banking or payment service providers,” says Alobaid. “In addition, they may require IBANs, account numbers, or other identifiers, which can be less user-friendly compared to mobile numbers. However, the choice between them may depend on user preference and specific use cases.”
GCC digital payments hub being formed
KFH is not the only institution rolling out the WAMD service, which is intended to form part of Kuwait’s national payment infrastructure capabilities. Approved by the Central Bank of Kuwait, the service has also been adopted by the National Bank of Kuwait and the country’s first digital bank, Weyay Bank.
“Governments in GCC are promoting digital payments through initiatives like the WAMD service, as well as the AFAQ transfer service for GCC instant payments,” says Alobaid. “Moreover, the Central Bank of Kuwait is introducing an enhanced regulatory framework, which is established to support digital payments, improve security, and ensure compliance with international standards.”
A similar service is Aani, launched by Al Etihad Payments in October 2023. A subsidiary of the Central Bank of the UAE, Al Etihad Payments was created to ‘establish and operationalise best-in-class payment services and infrastructure, contributing to financial stability and financial inclusion in the country’.