A revolutionary payment card system, unveiled in the United Arab Emirates (UAE) this week, is poised to revolutionize the nation’s financial landscape, heralding a new era in the India-UAE technology collaboration. India’s Minister of Commerce and Industry, Piyush Goyal, revealed that this cutting-edge offering, which is poised to reshape payment ecosystems, will become operational by the middle of the coming year. Goyal expressed enthusiasm about sharing this innovative solution with countries worldwide, including the UAE and Singapore, among others, with those embracing it early standing to reap substantial benefits.
The foundation for this transformative shift was laid through a strategic partnership agreement that entails the development and launch of the UAE’s domestic card scheme, drawing inspiration from India’s successful RuPay card stack. The agreement was forged between NPCI International Payments Limited (NIPL), a wholly owned subsidiary of India’s National Payments Corporation of India (NPCI), and Al Etihad Payments (AEP) for the implementation of the domestic card scheme (DCS) within the UAE.
Goyal underscored that this digital infrastructure framework is poised to seamlessly facilitate electronic transactions for governments, businesses, and individuals alike. He elaborated on the unique attributes of the Indian payment system, highlighting its robust security measures, cost-effectiveness, and swift transaction processing. He pointed out that in the past, remittances from the UAE to India were characterized by lengthy delays and exorbitant costs. The Unified Payments Interface (UPI) powered by the India stack eliminates these challenges, ensuring real-time, hassle-free money transfers.
The RuPay card, often likened to international giants like Mastercard or Visa, has been championed by NPCI, an initiative co-founded by the Reserve Bank of India (RBI) and the Indian Banks’ Association. In contrast, AEP operates as an indirect subsidiary of the Central Bank of the UAE (CBUAE). Under the terms of their agreement, NIPL and AEP are set to collaborate closely to construct, implement, and operationalize the UAE’s national domestic card scheme.
This significant development in the financial landscape is expected to foster economic integration. Goyal noted that the Central Bank of the UAE and the Reserve Bank of India have forged agreements to enable direct trading, payments, and remittances between the Dirham and the Indian Rupee, complete with periodic settlements. This will further drive down transaction costs, reduce exchange risks, and facilitate direct transactions in local currencies. Furthermore, the recent agreement between NPCI and UAE card issuers ensures that UAE cards can be used in India, while RuPay cards issued in India will find acceptance in the UAE. This harmonization is poised to bolster economic ties, encourage cross-border travel, and allow individuals to fully enjoy the fruits of this burgeoning partnership.
