Real-time payments, or instant payments, are expected to boom in the UAE and Saudi Arabia, meaning economic gains for businesses and consumers, according to a new report from ACI Worldwide, in partnership with GlobalData and the Centre of Economics and Business Research (CEBR).
Real-time transactions in the UAE are expected to climb to 134 million in 2026, up from 28m in 2021. In Saudi Arabia, real-time payments transaction volumes are forecast to rise to 473 million by 2026, delivering net savings for businesses and consumers of $109 million, helping to generate an additional $267 million of economic output, equivalent to 0.03 percent of the country’s forecast GDP.
“By allowing for the transfer of money between parties within seconds rather than days, real-time payments improve overall market efficiencies in the economy,” said Owen Good, head of advisory, Centre for Economics and Business Research. “Real-time payments improve liquidity in the financial system and therefore act as a catalyst for economic growth. This is especially important for our fast-paced and digital-led gig economies. For example, workers are paid quickly, allowing them to better plan their finances, while instant payments allow businesses to be more flexible and reduces the need for burdensome cashflow management.”
The UAE’s mandated Instant Payments Platform (IPP) is set to launch in October 2022, a sign of development in the country. Saudi Arabia is a newcomer to real-time payments, with its inaugural real-time payments system, Sarie, launched by the Central Bank in April 2021. But the untapped economic benefits of real-time payments in Saudi Arabia are large. According to the CEBR, the theoretical impact of all payments being real-time could add 2.8 percent to formal GDP by 2026.
The new research shows governments that advance 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 hyper-connected 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.
“The Middle East is on the cusp of a real-time payments revolution; the region has an incredible opportunity and the momentum to drive economic growth and financial inclusion with real-time payments,” said Santhosh Rao, senior vice president, Middle East, Africa and South Asia, ACI Worldwide. “The Middle East has shown that it has the appetite to embrace innovative technologies, and drive change and transformation at dazzling speed.”
