UAE wants to launch a domestic card scheme to reach independence from Visa/Mastercard

The United Arab Emirates (UAE) wants to reduce its reliance on Visa and Mastercard services, and to that extent, it seeks to launch a new domestic card scheme.

The Visa/Mastercard duopoly has been dominating the markets around the world, preventing any competitors from reaching their level. However, their domination over the market also resulted in increased fees for merchants and similar issues, leading to a lot of criticism of the two credit card giants.

UAE will use the same technology created to launch Indian RuPay

Now, the UAE has decided that it wants to seek independence from the two firms, which is why the Central Bank of the UAE (CBUAE) and its subsidiary payments infrastructure provider, Al-Etihad Payments, are working on their own solution. Reportedly, the two are developing and implementing the DCS in partnership with NPCI International Payments Ltd. (NIPL).

Previously, NPCI International Payments led the development of a RuPay card scheme in India. Now, it is offering its expertise to the UAE. NIPL is led by Ritesh Shukla, the former Visa and Mastercard executive. The company was established only three years ago, in 2020, by the National Payments Corporation of India (NPCI).

The idea is to sell the technology behind the RuPay network and Unified Payments Interface (UPI) to other nations seeking independence from the Visa/Mastercard duopoly.

For the UAE project, specifically, NIPL was hired to create the foundational infrastructure, operate the DCS, and provide data analysis support, as well as fraud monitoring. According to the current timeline, the new card scheme should be introduced early next year, in 2024.

Shukla commented on the new development, stating that his company’s DCS solution was based on the principles of speed-to-market, sovereignty, innovation, strategic independence, and digitization.

UAE continues the development of the local financial sector

Meanwhile, assistant governor on strategy, financial infrastructure, and digital transformation at CBUAE, Saif Al Dhaheri, stated: “We are pleased to collaborate further with our counterparts in India and are confident that we have chosen the ideal partners to accomplish this venture with. We also look forward to establishing an innovation fund that will look to support the payment systems of India and the UAE, drive R&D, and foster the capabilities of UAE citizens to ensure their effective management of the DCS.”

This new initiative came soon after the UAE central bank launched Aani, a new instant payments platform that offers its customers the ability to split bills and easily handle their money using nothing but their phone numbers. At the same time, the platform can also offer services to businesses, allowing them to simply accept payments made via QR codes.

So far, eight national banks have joined the initiative at launch, and the rest of them are expected to join by the end of the year.