Latest news with #NationalPaymentSystemsStrategy
Hi Dubai
2 days ago
- Business
- Hi Dubai
Dubai Secures SIBOS 2029 as UAE Strengthens Global Financial Standing
Dubai has been selected to host SIBOS 2029, one of the world's premier financial services events, reaffirming the UAE's status as a global banking and payments hub. Organised annually by SWIFT, the Society for Worldwide Interbank Financial Telecommunication, SIBOS brings together over 10,000 leaders from banks, fintech firms, and financial institutions. Dubai's selection reflects international confidence in the UAE's digital transformation, innovation in payments, and leadership in financial infrastructure. The UAE Banks Federation (UBF), in coordination with key partners including Dubai International Financial Centre, Dubai World Trade Centre, and the Dubai Department of Economy and Tourism, played a pivotal role in securing the bid, with the support of the Central Bank of the UAE. UBF Chairman Abdulaziz Al-Ghurair said the decision underscores the UAE's growing reputation as a centre for global dialogue on financial innovation, secure banking systems, and modern payment infrastructure. This will be the second time Dubai hosts the prestigious event, having previously done so in 2013—the first Middle East and Africa destination to do so. Since then, the UAE has deepened its role in global financial connectivity through initiatives such as the SWIFT User Training Centre and the region's first National SWIFT User Group, launched in 2021. Jamal Saleh, UBF Director-General, called the hosting a milestone reflecting the UAE's progress in digital payments and alignment with international standards, powered by the National Payment Systems Strategy initiated in 2019. SWIFT EMEA CEO Marianne Demarchi welcomed the return to Dubai, praising its strategic location and role in fostering industry-wide dialogue. News Source: Emirates News Agency
Express Tribune
16-06-2025
- Business
- Express Tribune
Digitalisation: avenues, hurdles
Listen to article The global financial landscape is undergoing a profound transformation with the advent of digital currencies, mobile banking, and fintech innovations. These advancements are reshaping economies by promoting financial inclusion, enhancing transparency, and reducing reliance on cash-based transactions. In Pakistan, a country with a significant cash-based economy, the push toward digitalisation of currency and financial inclusion is gaining momentum. The government and financial regulators, led by the State Bank of Pakistan (SBP), have introduced policies and regulations to encourage digital payments and discourage cash transactions. These efforts aim to modernise the economy, combat the informal sector, and integrate millions of unbanked individuals into the formal financial system. However, the transition to a digital economy is not without challenges, including infrastructural limitations, regulatory complexities, and socio-economic barriers. This article explores the digitalisation of currency in Pakistan, its role in promoting financial inclusion, the laws and regulations designed to reduce cash usage, and the advantages and disadvantages of this shift. Financial inclusion, a key objective of digitalisation, aims to provide affordable and accessible financial services to underserved and unbanked populations. According to the World Bank, 1.4 billion people globally remain unbanked, with Pakistan accounting for a significant portion mainly due to illiteracy, no access to banks or the inability of Pakistan Post to offer banking services like Singapore Post, hence Pakistan has a large informal economy, especially in rural areas. Digital financial services, such as mobile banking and digital wallets, have proven effective in bridging this gap by enabling low-cost transactions, savings, and credit access without the need for physical bank branches. In Pakistan, the digitalisation of currency aligns with the government's vision of a "Digital Pakistan," launched in 2019, which seeks to leverage technology to enhance economic growth and governance. The SBP's National Payment Systems Strategy (NPSS), introduced in 2019, and subsequent regulations have laid the groundwork for a cash-light economy. However, the transition requires balancing innovation with regulation, addressing infrastructural challenges, and ensuring equitable access for all citizens. Pakistan's economy is heavily cash-dependent, with cash transactions accounting for an estimated 80-90% of all payments, particularly in rural areas and the informal sector. According to the SBP, the informal economy constitutes approximately 30-40% of GDP, driven by cash-based businesses, unreported income, and limited banking penetration. Only 26% of Pakistan's adult population had access to formal financial services in 2021, per the World Bank's Global Findex Database, leaving millions reliant on cash for daily transactions. This reliance on cash poses several challenges. Transactions are difficult to track, enabling tax evasion and the growth of the black economy. The Federal Board of Revenue (FBR) estimates that Pakistan's tax-to-GDP ratio, at around 10%, is among the lowest in the region, partly due to unreported cash-based activities. Cash facilitates illicit transactions, including money laundering, terrorist financing, and corruption, undermining economic stability and security. Handling physical cash incurs significant costs for printing, transportation, and security. For businesses and individuals, cash transactions are time-consuming and prone to theft or loss. The lack of access to banking services excludes millions from savings, credit, and insurance, perpetuating poverty and inequality, particularly among women, rural residents, and low-income groups. The digitalisation of currency offers a pathway to address these issues by promoting transparency, reducing costs, and integrating the unbanked into the formal economy. The Pakistani government and the SBP have introduced a range of policies and regulations to encourage digital payments and reduce cash usage. These measures are part of a broader strategy to modernize the financial system, enhance tax compliance, and promote financial inclusion. Key initiatives include: StBP's National Payment Systems Strategy (NPSS), launched in 2019, aims to create a robust, interoperable, and inclusive digital payment ecosystem. Key components Raast instant payment system: Introduced in 2021, Raast is Pakistan's first instant digital payment platform, enabling real-time, low-cost transactions across banks and digital wallets. Raast supports person-to-person (P2P), person-to-business (P2B), and government-to-person (G2P) payments, reducing reliance on cash for small transactions. By 2024, Raast had processed over 200 million transactions, with a focus on financial inclusion for rural and underserved populations. Electronic money institutions (EMIs): The SBP's EMI Regulations (2019) allow non-bank entities, such as fintech companies, to offer digital payment services, including mobile apps and e-wallets. Licensed EMIs like JazzCash and Easypaisa have expanded digital financial services to millions, particularly in rural areas. Interoperability and open banking: The NPSS mandates interoperability among banks, fintechs, and payment service providers, ensuring seamless digital transactions. The SBP's Open Banking Framework encourages data sharing to foster innovation and competition. Taxation and cash transaction limits To discourage cash usage and enhance tax compliance, the FBR has introduced measures to limit cash transactions and incentivize digital payments: Section 21(l) of the Income Tax Ordinance, 2001: This provision disallows tax deductions for business expenses exceeding PKR 250,000 if paid in cash, encouraging businesses to use banking channels. Withholding tax on cash withdrawals: Under Section 231A, a 0.6% withholding tax is imposed on cash withdrawals exceeding Rs50,000 per day from bank accounts, incentivising digital transactions to avoid additional taxation. Point of Sale (POS) integration: The FBR's POS Integration Rules (2021) require large retailers (Tier-1) to install POS machines linked to the FBR's system for real-time transaction reporting. Non-compliance results in penalties, pushing businesses toward digital payments. Tax incentives for digital transactions: The FBR offers reduced tax rates for merchants accepting digital payments, encouraging the adoption of card and mobile-based transactions. The digitalisation of currency in Pakistan, supported by initiatives like Raast, EMI regulations, and tax policies, holds immense potential to transform the economy. By promoting financial inclusion, enhancing transparency, and reducing the costs of cash handling, digital payments can drive economic growth and integrate millions into the formal financial system. However, challenges such as the digital divide, low financial literacy, and cybersecurity risks must be addressed to ensure an equitable transition. Pakistan's laws and regulations to discourage cash transactions, including POS integration, cash withdrawal taxes, and AML/CFT measures, are steps in the right direction. Yet, their success depends on robust implementation, public awareness, and infrastructural improvements. By learning from global models like India's UPI and investing in inclusive policies, Pakistan can build a digital economy that benefits all citizens, from urban elites to rural farmers. As the country moves toward a cash-light future, it must balance innovation with regulation, ensuring that the benefits of digitalisationfinancial inclusion, transparency, and efficiencyare accessible to all. The journey is complex, but with strategic reforms and collective effort, Pakistan can harness the power of digital currency to create a more inclusive and prosperous economy. THE WRITER IS A TRADE EXPERT WITH OVER 35 YEARS OF EXPERIENCE IN INTERNATIONAL TRADE, A COMMODITIES CONNOISSEUR & FORMER VICE PRESIDENT OF KCCI
Arabian Business
22-05-2025
- Business
- Arabian Business
'It's not rocket science': Mahmoud Abuebeid on fixing cross-border payments
Mahmoud Abuebeid didn't come from fintech. He wasn't coding in his teens, or raising seed rounds in his twenties. He was in construction – until 2020, when the world stopped, and he started again. 'I had a lot of time to explore another opportunities in terms of improving my knowledge. I had a Harvard course… Harvard Business School was one of the key factors to change my mindset.' That mindset shift – shaped by case studies from Citibank and JPMorgan – planted the seed for a new path: financial technology built to serve, not just scale. Today, Abuebeid is CEO and co-founder of GSS Group, an Emirati software company building payment systems and open banking solutions for financial institutions across the UAE. His company is now a critical partner in the country's National Payment Systems Strategy (NPSS), with technology embedded across the real-time payments infrastructure. UAE fintech sector to hit $6.43bn by 2030 A future built on interoperability When the Central Bank of the UAE launched its Financial Infrastructure Transformation (FIT) programme in 2021, GSS was ready. 'We basically had a robust solution, and it was very good for the banks,' says Abuebeid. 'But the challenges were that some of the systems were legacy systems, and our solution were up to date. We had to integrate… in a kind of challenging way.' That friction – between legacy institutions and next-gen systems – is where GSS thrives. And it's where Abuebeid sees the greatest opportunity. 'Some people were really looking forward to digitalise and improve their system,' he adds. 'As of such, there is nothing more that would be a challenge.' Financial inclusion as a right, not a feature Abuebeid speaks with conviction about the potential for fintech to serve underserved communities. 'To serve the blue collar workers, I believe it's their right as a human, to have an access to different ways of finance,' he says. 'Where they can have a loan as low as probably $2,000… where they can send their money to their back home in a faster way with almost zero fees… where they can probably buy something on an instalment.' He's equally focused on SMEs. 'They don't have enough access to the financial products in the bank… whether it's facilities, supply chain, finance and others.' This belief system feeds directly into his view of open finance and cross-border payments: 'Cross-border payments is very important for the people. We are in the UAE, we have more than 200 nationalities… it's not rocket science.' Leadership is impact For Abuebeid, leadership is about outcomes. 'Strategic leadership is basically when you do a difference for the others, and you make life easier for the others.' But it's also about continuity. 'When you teach and you have different seminars… two might start their own company… This is, by itself, the true success.' This principle – of building something that outlives the individual – underpins his commitment to knowledge-sharing and mentorship across the fintech sector. What comes next Looking ahead, Abuebeid sees consent-driven data access – particularly through AI-powered KYC – as the next frontier. 'It is very important where everyone will have an access, or the entities can have an access to your data with your consent.' He credits the UAE Central Bank for creating the space for innovation. 'The Central Bank of the UAE has transformed a lot in the last five years… They invited different fintechs to the country where they can have their own financial license.' His prediction is bold – but measured. 'I believe a lot of fintechs will come to the UAE… it will lower the interest rate eventually, because you have different products, you have different options… I believe the UAE will be one of the top countries in terms of financial hubs in the next three or four years. Now we are the leaders in AI. Abu Dhabi is investing heavily in AI, and it's going to be called the capital of AI.' The human infrastructure of fintech Abuebeid's story is not a narrative of disruption. It's one of reconstruction. He isn't just inserting software into legacy systems – he's inserting purpose into financial technology. In a region redefining what modern finance should look like, Mahmoud Abuebeid is proving that progress doesn't start with code. It starts with conviction – and a willingness to build something that works better for everyone.
