1. GCC RTGS (Gulf Co-operation Council Real Time Gross Settlement System or Afaq Payment System)
Led by the six Central Banks of the GCC (Saudi Arabia, UAE, Bahrain, Kuwait, Oman and Qatar)
What will it do? This system will provide an overarching regional payment system connecting together the individual domestic RTGS payment systems of each of the six GCC countries. This would enable an efficient delivery of intra-GCC payments in the fiat currencies of the six countries. For example, a Saudi Riyal payment originated in the UAE and destined for a beneficiary in Saudi Arabia would transpire over the domestic UAE and Saudi Arabian payment systems, rather than rely on bilateral correspondent banking frameworks. The Afaq payment system is already live in Saudi Arabia, Kuwait and Bahrain with other countries to join the payment system over time.
What are the benefits? The GCC RTGS would create standardisation, drive efficiency, bring predictability and reduce costs, as erstwhile cross-border payments would be delivered using domestic payment system architecture. This would bring the experience of a pan-regional cross-border payment closer to that of a domestic payment.
2. Arab Regional Payment System (known as BUNA)
Led by the Arab Monetary Fund
What will it do? The system aims to create a central routing agent to provide a standardised payment experience across the Arab countries. With a common set of operating rules and a standardised SWIFT platform, BUNA would bring together the markets of the GCC, Middle East and North Africa for all intra-regional payments, covering not just the fiat currencies of the Arab countries but also key principally-traded currencies such as the United States Dollar and Euro.
What are the benefits? Already ‘live’ with 100 participants covering six currencies across the United Arab Emirates Dirhams, Egyptian Pound, United States Dollar, Euro, Jordanian Dinar and Saudi Arabian Riyal, BUNA is looking to augment currencies, countries and commercial bank participation over the near-to-medium term with the aim of providing efficiency and standardisation to intra-regional cross-border payments. In the near future, BUNA aims to further enhance the platform by introducing instant and real-time delivery of pan regional cross-border payments and provide the rails to support other financial market infrastructures.
These pan-regional payment systems provide an opportunity for corporate treasurers to optimise regional treasury centre models by concentrating receivables and payables across the geographies. Regional payment ecosystems can also help further evolve regional liquidity management practices through cross-border cash concentration, pooling and overlay solutions as corporate treasurers begin to consider their wider cash management structures in the region.
Global initiatives, such as SWIFT gpi, that bring transparency, visibility and predictability to cross-border payments would further improve payment user experience as regulators in the region look to embed UETR (Unique End-to-end Transaction Reference) within domestic payment systems, allowing an end-to-end tracking of overseas-originated payments that settle over the domestic payment schemes.
