Rise of fintech: Redefining cross-border payments as digital platforms surge

Khaleej Times

20-05-2025

In today's hyper-connected world, the ability to move money instantly, securely, and cost-effectively across borders is no longer a luxury — it's a necessity. Once known for traditional remittance corridors, the UAE's cross-border payments landscape has transformed into one of the most agile, innovative, and future-ready ecosystems globally. Over the past few years, propelled by a tech-savvy population, visionary national initiatives, and a vibrant fintech sector, the way people and businesses move money across borders has fundamentally evolved.
'The UAE's cross-border payments landscape has undergone a remarkable transformation in recent years,' said Adeeb Ahamed, Managing Director of LuLu Financial Holdings, in an interview.
'There's been an undeniable pivot toward digital channels, driven by a tech-savvy customer base and increasing trust in fintech innovation.'
This shift mirrors the country's broader digitisation agenda. Landmark programmes such as We the UAE 2031 and the Central Bank of the UAE's Financial Infrastructure Transformation (FIT) Programme have cultivated an environment where digital transformation isn't merely aspirational — it's expected. Today, customers don't just send money; they transfer value, whether in fiat currencies, digital tokens, or emerging asset classes. Yet, human-centric services still have their place, with leading players like LuLu Exchange offering an omni-channel model that balances convenience with personal trust.
Similarly, Ali Al Najjar, COO of Al Ansari Exchange, points to the dynamism and rapid evolution of the sector. 'The UAE has embraced advanced payment technologies, including real-time payment systems, digital wallets, and blockchain technology, which have streamlined cross-border transactions, making them faster and more secure,' he said.
The regulatory environment, too, has been instrumental. Progressive policies supporting anti-money laundering (AML) standards, sanctions compliance, and financial infrastructure development have strengthened the UAE's reputation as a global financial hub. As part of its broader push toward a cashless economy — with Dubai aiming to become one of the world's top five cashless cities by 2033 — the adoption of mobile payments and real-time transaction capabilities has been a game-changer for consumers and businesses alike.
Public-private partnerships have further accelerated progress. Collaborations between regulators, banks, fintechs, and global financial institutions have driven the creation of cutting-edge payment systems that combine speed with security.
Adding to this momentum, the introduction of the Unified Payments Interface (UPI) and RuPay card services in the UAE marks another landmark development, particularly in strengthening the UAE-India financial corridor. 'The UAE-India corridor alone accounts for approximately one-third of the country's outbound remittances,' said Al Najjar.
'Indian expatriates are embracing the familiarity and efficiency of these platforms, while merchants are benefiting from faster settlements and cost-effective transaction options. These innovations build on the 2022 UAE-India framework for local currency settlement (INR-AED), which aims to reduce transaction costs and promote bilateral trade. We expect UPI and RuPay to further strengthen the financial bridge between both nations.'
Otto Williams, Regional Head and General Manager of PayPal Middle East and Africa, notes: 'The UAE has transformed into one of the most agile cross-border payment hubs in the world. Driven by regulatory support, a robust fintech ecosystem, and consumer demand, cross-border payments in the UAE are increasingly seamless, instant, and secure,' he said.
He added that the advent of real-time infrastructure, open banking frameworks, and interoperable digital wallets has drastically reduced friction and cost, positioning the UAE as a key enabler of global commerce — bridging East and West with a spirit of innovation and inclusion.
Building a Future-Ready Financial Ecosystem
In 2024, the UAE's foreign trade reached a record Dh5.23 trillion — an extraordinary milestone that highlights its increasing significance on the world stage. At the same time, the UAE has consistently ranked among the top three remittance-sending countries globally, connecting millions of expatriates with their families through trusted financial channels.
Cross-border trade payments are pivotal to the UAE's economic momentum. As Ahamed notes: 'We consider the development of efficient payment rails as a critical part of the national financial infrastructure. Making it seamless and accessible is necessary for small businesses to thrive.' This focus has fueled the emergence of innovative, frictionless payment solutions designed to meet the complex needs of global enterprises and individual customers alike.
Recognising the crucial role of financial innovation, the Central Bank of the UAE has created a highly supportive regulatory environment. The country has become a living laboratory for next-generation financial technologies, including real-time payment rails, blockchain-based transfers, and biometric verification—all aimed at redefining the future of cross-border money movement.
'The UAE's open and progressive regulatory framework has set the stage for transformation,' says Williams.
'Initiatives like the Dubai Digital Economy Strategy, and innovation zones such as DIFC's Ignyte and FinTech Hive, have fostered a thriving commercial sandbox. The government's approach enables innovators like PayPal to bring cutting-edge solutions to market faster.'
Championing the UAE's cashless economy vision, Empay has emerged as a key player, aligning perfectly with the nation's digital economy aspirations. Launched in 2020, Empay aggregates lifestyle, government, and non-government payments into a single seamless platform. 'Empay simplifies financial management by allowing users to handle all their transactions without leaving the ecosystem,' says Gigi George Koshy, Deputy CEO and Chief Product Officer of Empay.
'This supports the national goal of digital transformation and inclusive financial access. Within the Empay ecosystem, users can send money instantly through peer-to-peer transfers. For cross-border needs, Empay has partnered with trusted exchange houses, making international remittances secure, quick, and accessible — especially important in a country with a large expatriate population.'
Reducing Friction in International Money Transfers
Ahamed emphasises that 'the future of finance lies in collaboration.' He explains that in a landscape as complex and fast-evolving as cross-border payments, no single player can address all the challenges on their own. Partnerships between startups and established financial institutions are helping to merge the speed and innovation of fintech startups with the trust, scale, and regulatory compliance of industry giants.
One prime example of this collaborative model is LuLu Exchange's Remittance-as-a-Service (RaaS) product. This service offers a plug-and-play infrastructure for cross-border payments, enabling fintechs across the region to integrate quickly into a seamless payment system. According to Ahamed, this partnership model not only accelerates innovation but also makes the process smoother for customers. By eliminating barriers and reducing delays, fintech collaborations empower companies to scale faster, expand into new markets, and deliver a seamless user experience for remittances.
Williams highlights the significance of partnerships in creating frictionless cross-border payments. PayPal's recent collaboration with TerraPay, a global payment platform, exemplifies how fintech companies are working together to connect banks, mobile wallets, and PayPal accounts across the Middle East and Africa. This partnership eliminates many of the delays and intermediaries typically involved in traditional international money transfers, offering customers a more transparent and secure payment experience.
Further innovating the wallet space, Williams adds, 'On the wallet front, we're working to make peer-to-peer cross-border wallet transfers as easy as sending a message.' By simplifying the process and removing unnecessary steps, these collaborations are paving the way for a more efficient and user-friendly experience. This is especially important for underserved communities, who are gaining access to global digital commerce for the first time — breaking down barriers to financial inclusion.
Driving Financial Inclusion
Cross-border payments are increasingly recognised as a key driver of financial inclusion, particularly in regions with large migrant populations.
'Cross-border payments are instrumental in driving financial inclusion — particularly in regions with large migrant populations. In the UAE, we've successfully leveraged innovation to make remittances faster, safer, and more affordable for millions,' according to Ahamed.
He credits the Central Bank of the UAE (CBUAE) for its future-focused regulation, which has laid the groundwork for a robust, technology-driven remittance ecosystem. This innovation-first approach is advancing financial inclusion at scale, in line with the UN Sustainable Development Goal of keeping global remittance costs below 5%. 'The UAE has consistently maintained remittance fees within this threshold — a significant achievement made possible through collaborative initiatives such as the Foreign Exchange and Remittance Group (FERG), which unites industry leaders to champion inclusive, customer-focused financial solutions,' Ahamed adds.
Echoing similar sentiments, Al Najjar highlights that innovation has become a powerful enabler of financial inclusion in the UAE's rapidly evolving financial landscape. 'With the UAE progressing toward a fully cashless society and mobile wallet usage growing rapidly, we are seeing a broader segment of the population — including underbanked and lower-income communities — gaining access to digital financial tools,' he says.
According to the latest survey, 82% of UAE SMEs now use apps and digital tools for cross-border payments, marking a 27% increase since 2021. This surge in digital adoption underlines how technology is democratising financial access across the country. 'At Al Ansari Exchange, we are committed to supporting this momentum through user-friendly digital platforms that extend reach and accessibility,' Al Najjar emphasises.
Williams also notes the broader impact of financial inclusion, adding: 'Financial inclusion isn't just a goal, it's a catalyst for long-term economic resilience. Through our partnerships and platforms, we're bringing millions of SMEs and individuals into the global digital economy. Our our joint efforts with ecosystems like Ignyte are designed to empower startups with access to payment tools that were once only available to large enterprises. Cross-border innovations help reduce reliance on cash, improve transparency, and enable access to broader markets, paving the way for more equitable growth, especially for underserved countries.'
The Age of Intelligence
As global trade and remittances continue to evolve, emerging technologies such as AI and open banking are set to redefine how money moves across borders.
'We are witnessing a transition into the age of intelligence — where AI is reshaping every industry, and cross-border payments are no exception,' says Ahamed. At LuLu Financial Holdings, AI is already being deployed in critical areas such as fraud detection, regulatory compliance, and reconciliation, significantly enhancing operational efficiency and security. Ahamed points out that intelligent automation is also making a major impact on customer service, enabling faster, more personalised support at scale.
Similarly, Williams highlights the early adoption of AI in streamlining compliance processes, preventing fraud, and even crafting personalised shopping experiences for users. 'These technologies, when integrated thoughtfully, promise a new era of programmable, personalised, and predictive financial services that scale across borders,' he says.
Open banking is another revolutionary force shaping the future. Ahamed notes that LuLu Financial Holdings has been an early adopter, fully embracing the shift towards embedded finance. 'Open banking gives us a clearer view of customer needs, enabling us to build a diverse and responsive suite of financial products,' he says.
Taking a major step forward, LuLu Financial Holdings will launch Digit9's World API next month at the Dubai Fintech Summit — a powerful tool designed to unify and simplify access to global payment networks. Ahamed believes it has the potential to profoundly reshape the cross-border money movement, making it faster, more secure, and more inclusive than ever before.
Williams echoes the sentiment, emphasising that open banking is becoming 'the connective tissue' linking local banks, digital wallets, and global payment providers like PayPal. This connectivity is essential for creating a truly interoperable financial ecosystem.