Retail Payment Systems

In the OIC Member Countries

by their employers. The system allows effective monitoring of the payment of wages by the

employers to their respective employees.

The Payment Systems Oversight Unit (PSOU) was created in April 2009 to supervise payment

systems in general and to ensure their compliance with the Core Principles for Systemically

Important Payment Systems issued by the Bank for International Settlements (BIS).

Retail Payment Systems

Credit Transfers

Credit transfers can be paper-based or automated. Credit transfers are used by companies for

salary and supplier payments. Credit transfers are cleared and settled via the UAEFTS, the

national RTGS system, on a same-day basis. There is no value threshold. In 2011, UAEFTS

processed 1.7 million transactions with a value of AED 8.2 trillion, compared to 1.3 million

transactions with a value of AED 8.6 trillion in 2010 (HSBC, 2013).

Direct Debits

Direct debits are available in the UAE and are used for low-value recurring payments such as

utility bills. Funds are available to the beneficiary on a next-day basis. At present there is no

interbank system in the UAE for direct debits. The UAE Direct Debit System (UAEDDS),

currently being tested, will provide a centrally operated method of effecting recurring

payment transactions for utility services, card payments and loan repayments amongst others.

Cheques

The cheque is the dominant cashless payment instrument in the UAE, in terms of both volume

and value, and is used for both retail and commercial payments. Cheques are truncated into

electronic items before being cleared by the ICCS. Final settlement is via the UAEFTS on a

same-day basis. In 2011, the ICCS processed 8.6 million transactions with a value of AED 1.1

trillion (HSBC, 2013).

Card Payments

The use of payment cards in the UAE has increased rapidly in recent years. Of the GCC member

states, only Saudi Arabia and Kuwait have higher card issuance rates. There were

approximately 10.12 million payment cards in circulation in the UAE at the end of 2011. Debit

cards account for approximately 90% of all payment cards in circulation. Visa and MasterCard

are the principal credit card issuers in the UAE. Each bank in the UAE establishes its own

individual clearing and settlement arrangements with the card associations.