Payment and Settlement Systems

Introduction
As payment systems are vitally important for the financial sector - and the economy as a whole - the Central Bank plays a leading role in the establishment, development, operation and oversight of payment systems in the UAE.

Central Bank Systems

The Central Bank owns and operates following payment systems:

  • The UAE Funds Transfer System – UAEFTS
  • The Image Cheque Clearing System –  ICCS
  • The UAE Wages Protection System – UAEWPS
  • The UAE Switching System – UAESWITCH
  •  The UAE Direct Debit System – UAEDDS
  •  The UAE Payment Gateway System – UAEPGS

A brief of each is introduced below.

UAEFTS – UAE Funds Transfer System

The UAE Funds Transfer System (UAEFTS) is the Real Time Gross Settlement (RTGS) system of the United Arab Emirates, hosted by the Central Bank of the UAE. The system has been operational since August 25, 2001.  The latest edition, UAEFTS 3.0, has been functioning since March 2012. The system facilitates the transfer of funds between banks and other financial institutions in the UAE via their accounts held with the Central Bank. The efficiency and governance of the system are ensured by the compliance with the domestic and international standards as well as the rules detailed by Central Bank in the system’s Rules document.

Requests submitted by participants are queued for immediate action by the system.  Processing and final settlement of transfer instructions take place continuously, in real time.  Transfers are settled individually without netting debits against credits.  Authorized users of the requesting participant can review the status of their requests throughout the system business hours.  Once a transfer request is processed, the system sends to all participants affected by the transfer. Payment instructions are irrevocable and final as well as the settlement.

The UAEFTS provides full straight through processing (STP) of payment requests by enabling processing of prescribed message formats using Secure File Transfer Protocol (SFTP).  In addition to this, the UAEFTS also allows messages to be keyed-in using a web-browser interface named the UAEFTS Transactions & Enquiry Portal (TEP).

Latest statistics can be found, under Banking Operations Statistics - UAEFTS Statistics, on the following link: https://www.centralbank.ae/en/statistics/monthly-statistics

 

ICCS – IMAGE CHEQUE CLEARING SYSTEM

The Image Cheque Clearing System (ICCS) was introduced by the Central Bank in July 2008. The objective of the ICCS is to allow for the truncation of cheques at the point of acceptance whilst providing a safe, secure, efficient and robust payment mechanism in the United Arab Emirates. Banks will settle cheques issued on accounts held by them based on electronic images of these cheques.  ICCS reduces the dependence of the payment infrastructure on the physical movement of paper, and therefore facilitates shorter clearing and settlement cycles. It also facilitates quicker realization of funds on these items. Cheques deposited at the teller counters at any bank-branch by 10am get cleared at 5pm the same day. The efficiency and governance of the system are ensured by the compliance with the domestic and international standards as well as the rules detailed by Central Bank in the system’s Rules document.

The model adopted by the Central Bank of the UAE (CBUAE) is one where a cheque envelope (CE) encapsulates the images of the individual items. A Presenting Bank generates the CE for delivery to the Issuing Bank. CBUAE plays the vital role of ensuring that delivery and settlement happens in a timely, predictable and efficient manner. CBUAE is the Clearing House for all cheques, acting as the intermediary for all data and image flow between the collecting and paying bank.

CBUAE also acts as the national central archive for all items delivered via the Image Cheque Clearing System (ICCS). The ICCS Cheque Archive is available to all banks, providing access to the images of cheques cleared via ICCS. Individual items within the archive will be available to the Presenting Bank, the Issuing Bank and the Clearing House, as per the stipulated rules in the ICCS Rules document.

Latest statistics can be found, under Banking Operations Statistics - UAE Image Cheque Clearing Statistics, on the following link: https://www.centralbank.ae/en/statistics/monthly-statistics

 

UAESWITCH

The UAESWITCH was introduced by the Central Bank in July 1996 to facilitate the linkage of the Automated Teller Machine (ATM) network of all banks in the U.A.E enabling customers of different banks to use any ATM and Point of Sale (POS) in the U.A.E. The UAESWITCH Provides regional and international interconnectivity with other national similar systems. Currently, it is connected to the Gulf Cooperation Council (GCC) states switch systems (GCCNET) as well as to China Union Pay (CUP). This allows the cardholders of these different systems to obtain the services interchangeably. The efficiency and governance of the system are ensured by the compliance with the domestic and international standards as well as the rules detailed by Central Bank in the system’s Rules document.

 

UAEWPS – UAE WAGES PROTECTION SYSTEM

The Wages Protection System (WPS) was implemented at the Central Bank of the UAE (CBUAE) and launched in June 2009 to meet the desired objectives of the Ministry of Labour (currently known as the Ministry of Human Resources and Emiratization). The objective of UAEWPS is to provide a safe, secure, efficient and robust mechanism to streamline the timely payment of wages to employees by their employers.  The UAEWPS has been adopted by many different authorities in the UAE.

The model adopted by CBUAE is one where information flows from the employer to one or more of the contracted agents for payment of the wages to their employees.  Funds from the employers are secured by CBUAE prior to dispatching the wages information to the agents. The efficiency and governance of the system are ensured by the compliance with the domestic and international standards as well as the rules detailed by Central Bank in the system’s Rules document.

The system shall empower CBUAE, and thereby the Labor Regulatory Authority (LRA), with the functionality that would allow effective monitoring of the payment of wages by the employers to their respective employees.  WPS shall provide the required functionality to:

  • Record entities in an industry standard database for future reporting and maintenance.
  • Facilitate the monitoring of fund flows.
  • Accept fund transfer from the employer’s bank and onward transfer to the agents with balances maintained at employee level.
  • Provide salary details pertaining to the employees to specific agents.
  • Receive and process:
    • Receipt confirmations from agents against wages to be paid to employees.
    • Disbursement information provided by the agents against wages that the agents have paid out to the employees.
    • Refund requests from employers.
    • Refund responses from agents.
  • Provide data feeds to LRA on a frequent basis to enable effective monitoring.

 

UAEDDS – UAE Direct Debit SYSTEM

The UAE Direct Debit System (UAEDDS) was introduced by the Central Bank in October 2012 to provide a platform for the customers of banks to initiate automatic payments towards their liabilities in their own bank or to any other bank, other financial institutes, service providers and third parties.

 It is a safe and convenient method of making payments and is ideally suited for regular payments with fixed or variable amounts such as utility bills, insurance payments, mortgage or loan repayments and subscriptions. The efficiency and governance of the system are ensured by the compliance with the domestic and international standards as well as the rules detailed by Central Bank in the system’s Rules document.

 

UAEPGS – UAE PAYMENT GATEWAY SYSTEM

The UAE Payment Gateway System (UAEPGS) was introduced by the Central Bank in June 2016 to allow the customers of merchants connected to the service to purchase and pay their bills online either by direct debit (through their bank account via the internet banking) or via a UAEPGS member bank debit card. In the case of direct debit, the gateway redirects the customer to their bank’s website where the customer authenticates by using the internet banking login.

The efficiency and governance of the system are ensured by the compliance with the domestic and international standards as well as the rules detailed by Central Bank in the system’s Rules document.

UAE Fund Transfer System (UAEFTS)

Minimum Participation Requirements to the UAEFTS:

  • Applicant must obtain the necessary licenses from the Central Bank and adhere to its regulatory controls.
  • Applicant must maintain the required account(s) with CBUAE.
  • Obtain the CBUAE Network Access Rights and complete successfully the CBUAE Services Network Certification process.
  • Obtain the CBUAE Application Access Rights and complete successfully the CBUAE Application Certification process.
  • Adhere to the Rules, roles, and responsibilities articulated in “UAEFTS Rules” document.

Image Based Cheque Clearing System (ICCS)

Minimum Participation Requirements to the ICCS

  • Applicant must obtain the necessary licenses from the Central Bank and adhere to its regulatory controls.
  • Applicant must maintain the required account(s) with CBUAE.
  • Obtain CBUAE Network Access Rights and complete successfully the CBUAE Services Network Certification Process.
  • Obtain CBUAE Application Access Rights and complete successfully the CBUAE Application Certification Process.
  • Adhere to the Rules, roles, and responsibilities articulated in “ICCS Rules” document.

UAE Wages Protection System (UAEWPS)

Minimum Participation Requirements to the UAEWPS

  • Applicant must obtain the necessary licenses from the Central Bank and adhere to its regulatory controls.
  • Applicant must maintain the required account(s) with CBUAE.
  • Obtain CBUAE Network Access Rights and complete successfully the CBUAE Services Network Certification Process.
  • Obtain CBUAE Application Access Rights and complete successfully the CBUAE Application Certification Process.
  • Adhere to the Rules, roles, and responsibilities articulated in “UAEWPS Rules” document.

UAE Direct Debit System (UAEDDS)

Minimum Participation Requirements to the UAEDDS

  • Applicant must obtain the necessary licenses from the Central Bank and adhere to its regulatory controls.
  • Applicant must maintain the required account(s) with CBUAE.
  • Obtain CBUAE Network Access Rights and complete successfully the CBUAE Services Network Certification Process.
  • Obtain CBUAE Application Access Rights and complete successfully the CBUAE Application Certification Process.
  • Adhere to the Rules, roles, and responsibilities articulated in “UAEDDS Rules” document.

U.A.E. Switch (UAESWITCH)

Minimum Participation Requirements to the UAESWITCH

  • Applicant must obtain the necessary licenses from the Central and adhere to its regulatory controls.
  • Applicant must maintain the required account(s) with CBUAE.
  • Obtain CBUAE Network Access Rights and complete successfully the CBUAE Services Network Certification Process.
  • Obtain CBUAE Application Access Rights and complete successfully the CBUAE Application Certification Process.
  • Adhere to the Rules, roles, and responsibilities articulated in “UAESWITCH Rules” document

U.A.E. PGS (UAEPGS)

Minimum Participation Requirements to the UAEPGS

  • Applicant must obtain the necessary licenses from the Central and adhere to its regulatory controls.
  • Applicant must maintain the required account(s) with CBUAE.
  • Adhere to the Rules, roles, and responsibilities articulated in “UAEPGS Rules” document. 
  • Obtain UAEPGS Network Access Rights and complete successfully the CBUAE Services Network Certification Process.
  • Sponsored Merchants who wants to join the system should fulfill all the system pre-requisites via a licensed commercial bank (Sponsoring Bank) in addition to the other requirements from the competent regulatory authority in UAE.
  • Obtain UAEPGS Application Access Rights and complete successfully the CBUAE Application Certification Process