UAE bank launches digital payments, card tokenization platform

Getting your Trinity Audio player ready...

Sharjah Islamic Bank (SIB), one of the largest lenders in the Islamic banking segment in the UAE, has launched a new digital payments platform for enterprises.

SIB announced SIB Pay as the most efficient payment tool for small and medium-sized enterprises, corporations and public institutions. The lender says the new platform will accelerate the UAE’s journey towards being a cashless society and aligns with the UAE Vision 2031 Digital Agenda.

One of the key features of SIB Pay is card tokenization, which replaces a user’s debit or credit card information with a randomly-generated token usable only with specific merchants. This beefs up security for users at a time when card fraud has spiked, driven in part by a surge in digital commerce. One study found that 62 million credit card holders experienced some form of fraud in the U.S. alone last year, with another predicting that losses from credit card fraud will reach $43 billion next year.

Card tokenization has taken off globally, with India’s Reserve Bank revealing that as of December 2024, over 910 million tokens had been created. Visa (NASDAQ: V) further claimed that its card tokenization efforts had saved its users $650 million in possible fraud.

Beyond card tokenization, SIB Pay will offer soft POS features where any smartphone can function as a secure payment terminal. Users can also send payment requests via SMS or email, which the recipient can settle instantly.

UAE conducts first gov’t transaction via CBDC

Still in the UAE, the Ministry of Finance has conducted the first-ever government transaction using the digital dirham. The transaction, which also involved the Central Bank of the UAE, took less than two minutes and is part of the digital dirham pilot project.

His Finance Ministry counterpart, Sheikh Maktoum bin Mohammed, says that the digital dirham signifies the government’s commitment to accelerating digital payments in the country.

The UAE government is set to implement a new law that gives the digital dirham the same legal standing as physical cash. The upcoming bill will “govern how the digital currency will be issued, circulated, redeemed at full nominal value, and legally transferred,” a local legal expert told the Khaleej Times.

The digital dirham ties in with mBridge, a collaborative effort with the central banks of China, Thailand, Hong Kong, and, starting mid-last year, Saudi Arabia. The Bank for International Settlements (BIS) was an original member, but last October, it announced its exit, which experts claimed was due to China’s growing influence and BRICS ties.

Despite the BIS exit, the UAE has reaffirmed its commitment to the project, which the Ministry of Finance says reflects the country’s “regional and global leadership in adopting modern technological solutions across government, finance, and business sectors.”

Watch | Middle East governments trying to find good use cases for blockchain: Ahmed Yousif