The UAE’s domestic payments rails are in place, but the money hasn’t moved yet

Whether the UAE’s domestic payments system delivers the cheaper, more resilient payments it was built for depends on how much spending migrates onto it, and that migration has barely started. Real-time payments account for 1.5% of UAE transaction volume, according to ACI Worldwide, with the share projected to reach 3.6% by 2028. There is no public data yet on how much card volume has moved off the international schemes since Jaywan went nationwide in July.

REFRESHER- Jaywan is the card scheme piece of Al Etihad Payments (AEP), the Central Bank-owned company that also runs the Aani instant payment service and the UAESWITCH domestic switch, which processes every Jaywan transaction made inside the country. Co-badged Jaywan cards still carry Visa, Mastercard, or UnionPay, which take over when the card is used outside the UAE.

The infrastructure is in place, and so is the distribution. Central bank rules will make every debit and prepaid consumer card issued during 2027 a Jaywan card, with existing international-scheme cards reissued on the domestic scheme.

Migration decides the payoff: Lower pricing on domestic card transactions, resilience from running them at home, and savings that banks either keep or pass to merchants and customers.

“Many countries have a domestic switch, many have instant payments, some have domestic schemes,” Zilvinas Bareisis, director of retail banking and payments at Celent, tells EnterpriseAM. “What’s notable about the UAE’s approach is the coordinated, state-backed packaging of the three layers: A card scheme, instant payments, and a national switch.”

What AEP runs

The infrastructure has come together quickly. Aani had more than 12.5 mn registered users and 74 participating financial institutions by April, and supports instant transfers of up to AED 50k. Jaywan’s card rollout is phased: More than 10 financial institutions are issuing, with the rest of the licensed institutions scheduled through December.

The switch underneath is the oldest piece. “UAESwitch has been around for many years,” Bareisis says. “Jaywan and Aani are newer services launched as part of the UAE’s Financial Infrastructure Transformation (FIT) Program.” What AEP has changed is the ownership: All three now sit in one state-backed company.

Where a Jaywan payment goes

Routing is the core of the design. “All Jaywan transactions within the UAE, whether from a mono-badged or co-badged card, are processed through UAESWITCH,” Andrea Cianchetti, chief products officer at AEP, tells EnterpriseAM. A co-badged card can still carry Visa, Mastercard or another international scheme, but that network only takes over when the card is used outside the country.

Co-badging is what makes the scheme palatable to cardholders, Bareisis says. “It tends to genuinely hold as co-badging lowers adoption friction because consumers retain global acceptance. Domestic schemes can be very popular at home, but consumers want that same consistent payment experience abroad.”

AEP is leaving the format to the banks. Issuers can choose between mono-badged and co-badged Jaywan cards, customers can request a mono-badged card, and AEP is working with UnionPay on international acceptance for mono-badged cards. “There is no prescribed end state in which either format becomes the standard,” Cianchetti says. “Issuers determine their issuance model.”

Routing domestic payments domestically hands the state a set of levers. “If domestic payments can be routed domestically by default, the country gains leverage over pricing, resilience, dispute rules, sanctions/force majeure risk, and operational continuity,” Bareisis says. He puts the UAE in a wider group of governments trying to reduce reliance on external payment infrastructure. “The desire is to ensure that a credible domestic alternative exists,” he says.

Aani’s user numbers are the figure most often cited as evidence that it’s working, and they measure sign-ups rather than money. A registration says nothing about how much payment value moves through the system, and AEP has not published a volume share for either Aani or Jaywan.

What it costs the banks

For UAE banks, the first effect is integration work: Connecting to the domestic rails while maintaining their international relationships, which means spending before any savings from domestic routing arrive.

The good news is that they can afford it. The 10 largest domestic banks reported an average cost-to-income ratio of 27.7% and return on equity of about 19% at end-June 2026, according to S&P Global Ratings. That should allow most banks to “absorb modest implementation costs without a material impact on their efficiency and profitability,” Puneet Tuli, associate director at the ratings agency, tells EnterpriseAM.

Beyond that, the economics turn on migration. “We expect bank profitability should remain broadly stable,” Tuli says, but the impact will depend on “the volume of transaction migration, the pricing differential and how much savings banks retain vs. pass through to merchants and customers.” Banks with large UAE retail and credit card franchises stand to gain most, he says, because their volumes can offset the upfront investment.

AEP doesn’t set the full price either. For debit and prepaid cards, “the IRF is set by the regulator and applies across card schemes,” Cianchetti says, while the merchant discount rate “is the fee agreed between the merchant and its acquirer or payment service provider.” How much of any saving reaches merchants and consumers is a matter for banks and acquirers.

Government payments go first

The federal government is moving its own collections across. The Finance Ministry adopted Aani and Jaywan for federal service fees and fines in August, with other federal entities and collection banks expected to follow.

Acceptance was built before the launch rather than after it. “Jaywan acceptance was developed simultaneously across government-related and private-sector merchants,” Cianchetti says. “A sufficient level of acceptance across different merchant types was necessary before Jaywan could launch as a national card scheme.” Since then the acquiring side has widened: Network International and Telr added Jaywan to their gateways, Majid Al Futtaim took it across more than 200 of its UAE destinations, Emirates began accepting Jaywan for flight bookings in mid-September, and Checkout.com has integrated the scheme into its acquiring platform.

How the UAE differs from its neighbors

Domestic schemes are standard in the Gulf: Kuwait has KNet, Bahrain has Benefit, Qatar has NAPS, and Saudi Arabia’s version is mada. The UAE’s distinction is that one state-owned company holds the scheme, the instant payment service and the switch together. Bareisis puts the country in “a relatively small cohort of jurisdictions treating payments as a full-stack national utility, not a single-rail project.”

Tuli reads the intent the same way. “The initiative is fundamentally about building greater domestic resilience and sovereignty over critical payments infrastructure,” he says, while for banks it remains “a compliance and integration exercise” requiring investment alongside their existing network relationships.