🇦🇪 Payments in the United Arab Emirates

State-owned infrastructure, an expatriate customer base

The UAE's payment infrastructure comprises the systems that route, clear, and settle domestic transactions, and it is state-owned. The Central Bank of the UAE (CBUAE) runs gross settlement, the card switch, check clearing, direct debit, and the online payment gateway. Since 2023 it has housed its next-generation rails in a wholly owned subsidiary, Al Etihad Payments (AEP). It transferred the UAE Funds Transfer System and UAESWITCH to AEP while keeping its role as supervisor (CBUAE, 2024 annual report). A foreign provider that wants to connect therefore deals with the central bank or its subsidiary, not with a consortium of private banks.

The UAE dirham has been pegged to the US dollar at AED 3.6725 per USD since November 22, 1997. The peg has never broken, so AED-denominated receipts carry no currency risk against the dollar. They do carry risk against the euro, the rupee, and the peso, whose rates move against the dollar. Payment service customers are overwhelmingly non-Emirati, and expatriates make up most of the resident population. That explains both the volume of outbound remittances and the widespread use of international cards.

Aani: instant payments and the per-transfer cap

Aani is the UAE's consumer instant payment rail, launched in 2023 and operated by Al Etihad Payments. It runs on the CBUAE's Instant Payment Instruction (IPI) platform and exchanges ISO 20022 messages. Payers address a transfer with an alias, either a mobile number or an Emirates ID, instead of an account number. Transfers settle without a correspondent bank in between. The central bank documents a cap of AED 50,000 per transfer and continuous, 24/7 operation (CBUAE, 2024 annual report).

CBUAE statistics use two labels for the same rail: IPI and Aani. Transactions reported under the IPI label fell from 67.5 million in 2024 to 33.8 million in 2025, and their value dropped from AED 225.4 billion to AED 168.8 billion. The central bank attributes the decline to activity shifting to Aani as its rollout expanded (CBUAE, 2025 annual report). Transactions that left the IPI count now enter the infrastructure through Aani and are counted under that second label. A time series that tracks only the IPI label therefore shows a shrinking market, while instant payment activity as a whole is growing.

• Live services: alias transfers, Request to Pay, QR code payments, bill splitting (split payments), and aggregation of accounts held at several institutions.
• Services announced by AEP in April 2026: cross-border payments, electronic direct debit, electronic checks, and business-to-business payments.
• Cross-border: on February 5, 2026, AEP selected Montran to build an international remittance gateway connecting Aani to foreign instant payment systems, starting with India's UPI through NPCI International.
• China corridor: a link between the IPI and China's Internet Banking Payment System has gone live to speed up cross-border retail payments (CBUAE, 2025 annual report).

The unsung rails that carry everyday payments

The UAE's legacy rails are the systems the CBUAE has run for 15 or 20 years. They handle hundreds of millions of transactions a year, while the newer Aani and Jaywan still carry only a fraction of that. A UAE merchant's collection times and cash position depend on how these rails perform day to day. The three main ones are checks, direct debit, and the national gateway.

Checks remain a common instrument in the UAE, used as much for security as for payment. The ICCS cleared 23.78 million checks in 2025, worth about AED 1.5 trillion, with value up 8.55% year over year (CBUAE, 2025 annual report). As security, checks back rent deposits, trade credit, and installment plans. The legal regime changed on January 2, 2022, when Federal Decree-Law No. 14 of 2020 took effect: insufficient funds alone are no longer a criminal offense. The drawee bank must pay the check partially, up to the available funds, and issue a partial payment certificate that is enforceable for the balance.

The UAEPGS national gateway, live since 2016, lets a connected merchant collect directly from the payer's account, with the payer approving in online banking. A single integration reaches many banks, with consolidated settlement. In 2025 the system processed 1.8 million transactions worth AED 7.84 billion, down 2% in volume and up 20% in value (CBUAE, 2025 annual report). The average ticket is rising as the number of transactions falls. Seven years older than Aani, this rail is in decline.

Jaywan: the domestic card and its adoption gap

Jaywan is the UAE's first domestic card scheme, operated by Al Etihad Payments. A card scheme is the network that sets the rules for issuing, accepting, and routing transactions under its brand. The CBUAE states the goal plainly: stop paying an international network for flows that never leave the country. Jaywan routes domestic POS transactions locally through UAESWITCH. All Jaywan transactions are denominated in dirhams, which eliminates FX fees and conversion spreads (CBUAE, 2024 annual report). The underlying technology was imported: AEP relied on NPCI International Payments Limited, which transferred the RuPay stack developed in India.

The sales pitch for Jaywan centers on merchant cost. Network International, the country's largest acquirer, says merchants pay no additional fees on Jaywan transactions (statement reported by the UAE press, July 2026). How far that goes has to be checked in each acquirer's contract, since pricing is still negotiated institution by institution. The promise of no surcharge covers a potential add-on fee, not the level of the base merchant discount rate. The verifiable saving therefore lies not in the acquirer's pricing but in the currency. A Jaywan transaction incurs neither FX fees nor conversion spreads, since it stays in dirhams end to end.

Wallets and super apps: who holds the resident's account

A payment wallet is an account accessed through a mobile app, into which customers load funds to send money or pay for purchases. In the UAE, nonbank companies launched these wallets. A ride-hailing app, a messaging app, and a telecom operator each run one under their own central bank license. The main uses remain sending money home and paying bills, with purchases coming second. These wallets target customers that traditional retail banks served poorly: people on modest salaries with small balances.

Alongside these local wallets, device makers' wallets are present at the point of sale. Apple Pay, Google Pay, and Samsung Pay tokenize locally issued cards. Contactless is the norm in stores. Buy now, pay later comes from two regional players, Tabby and Tamara, both operating under central bank licenses. BNPL has never been a regulatory blind spot in the Gulf. In a UAE online merchant's checkout, these methods appear before local wallets.

Onshore license or free zone: the question that decides everything

Which regime applies to a payment provider in the UAE depends on where its customer is: onshore or in a financial free zone. The UAE has several financial regulators whose jurisdictions do not overlap. The CBUAE regulates the onshore territory, which covers all seven emirates outside the financial free zones. The DIFC in Dubai and the ADGM in Abu Dhabi are financial free zones with their own laws and their own regulators. The DFSA supervises the first and the FSRA the second. Authorization obtained in a free zone is valid inside that zone. It is not a license to offer retail payment services to onshore residents.

The main onshore regime is the Retail Payment Services and Card Schemes Regulation, published in July 2021. It took effect on July 15, 2021, with a one-year transition period for firms already operating. The regulation lists retail payment services and groups them into license categories. They include payment account issuance, payment instrument issuance, merchant acquiring, and payment aggregation. The list also covers domestic and cross-border fund transfers, payment token services, payment initiation, and account information. None of these services may be provided, or even promoted, without a license unless the provider is exempt. CBUAE-licensed banks are exempt but must give notice of their intent to offer them.

• Payment tokens: the Payment Token Services Regulation, issued June 7, 2024 and in force since July 6, 2024, governs the issuance, conversion, custody, and transfer of tokens. It distinguishes dirham-denominated tokens from foreign tokens, bans paying interest to holders, excludes algorithmic stablecoins, and limits foreign tokens to virtual asset transactions.
• Two dirham-backed token issuers were licensed under this regime in 2025, subject to requirements on issuance, reserve management, redemption, and operations (CBUAE, 2025 annual report).
• Exchange and remittance: the exchange business regulation was amended in 2025 to strengthen governance, operational risk management, AML/CFT, consumer protection, digitization, and reporting. The amendment creates a fourth license category, dedicated to fully digital remittance (CBUAE, 2025 annual report).
• Customer redress: since March 7, 2024, the independent unit Sanadak has handled complaints from consumers of financial and insurance services, taking over duties previously performed by the CBUAE's consumer protection department.

Salaries and outbound remittances: the country's real payment flow

The chain from salary to outbound remittance consists of two linked transactions: a salary paid to a resident, then part of that salary sent home. It is the most frequent payment in the country. Both legs are regulated, and the first is a precondition for the second. The UAE Wages Protection System, or WPS, requires covered employers to pay salaries through a monitored channel connected to the central bank and the Ministry of Human Resources and Emiratisation. Employers need to comply with the WPS to complete their administrative filings, starting with work permits, so the system cannot be bypassed.

The UAE remittance sector is consolidating. Licensed exchange houses fell from 73 at end-2024 to 64 at end-2025, and registered hawala providers from 37 to 34 (CBUAE, 2025 annual report). Two forces are at work: compliance costs, which small branch networks struggle to absorb, and competition from wallets, which moves sending into the app. The 2025 amendment to the exchange business regulation formalizes the shift by creating a license category for fully digital remittance. Al Ansari Exchange and LuLu Exchange remain massive physical networks, but they are no longer the only way money leaves the country.

The FIT program: digital dirham, open finance, tokens

The FIT (Financial Infrastructure Transformation) program, launched in 2023, frames the modernization of the UAE financial sector and of the central bank itself. Al Etihad Payments was created the same year. Aani, Jaywan, open finance, the digital dirham, and national electronic identity are its workstreams. They belong to a single plan run by the central bank, not to separate initiatives.

• Digital dirham: legal tender under Federal Decree-Law No. 54 of 2023. The CBUAE has given the currency a digital symbol and built a wallet covering retail and wholesale use (CBUAE, 2025 annual report).
• Al Tareq: the UAE's open finance initiative, live since 2025, with standardized consent journeys, payment initiation, confirmation of payee, data sharing, and insurance quotes. Nebras Open Finance runs the central API infrastructure.
• National e-KYC: the implementing rules governing the national electronic identification entity were finalized in 2025; the platform is in organizational and technical design.
• Dirham-backed tokens: two issuers licensed in 2025, with requirements on issuance, reserves, redemption, and operations. These tokens can serve selected domestic and cross-border use cases.

Operating in the UAE: what breaks and what it costs

Merchant acquiring means connecting a merchant to the card networks and settling its payments. In the UAE this market is concentrated around one main player. The merger of Network International and Magnati closed on October 1, 2025, under the control of a Brookfield-led consortium. The combined company covers more than 50 markets in Africa and the Middle East. It serves more than 250 financial institutions, 240,000 businesses, and more than 20 million cardholders (Network International press release, October 2025). Magnati was spun out of First Abu Dhabi Bank. The combined market share narrows a midsize merchant's room to negotiate. Checkout.com, Telr, Amazon Payment Services, PayTabs, and Ziina are the other options, with different coverage and pricing.

Mandatory e-invoicing is being phased in across the UAE on a schedule set by regulation. The UAE model runs on the Peppol network with a five-corner model and the PINT AE format. Businesses must go through a service provider accredited by the Ministry of Finance. Ministerial Decisions No. 243 and No. 244 of 2025, published September 28, 2025, set the framework. The rollout is staggered by revenue and type of entity.

• License scope: decide between onshore and free zone before drafting the first line of the contract. The test is where the customer is, not where the head office is.
• Switch connection: without access to UAESWITCH, directly or through a local acquirer, domestic volume stays out of reach.
• Aani cap: AED 50,000 per transfer. Any use case above it falls back to UAEFTS, with a different flow and different timelines.
• UAEDDS mandates: debiting requires a mandate registered with the central bank. Collect it before the first due date, not after the first rejection.
• Checks taken as security: since January 2, 2022, the drawee bank pays partially up to the available funds and issues a certificate that is enforceable for the balance. Plan the accounting treatment of a partially paid check.
• Brand mix: on co-badged Jaywan cards, track monthly which brand is actually routed on domestic transactions. That is where the cost gap sits.
• Complaints: Sanadak has been the consumer escalation body since March 2024; a documented internal complaints process reduces escalations.