Buna: Cross-border Payments Need Higher Ambition!

Posted on Jun 21, 2022 by Mehdi Manaa, Chief Executive Officer, Buna

In my previous article in this publication a few months after the launch of Buna in 2020, I shared some thoughts on the challenges that cross-border payment systems must tackle to develop and progress. In any situation where challenges are multiple, one should generally consider prioritizing to reduce the number of difficulties and increase the likelihood of success. However, for payment systems it remains important to create synergies between the set priorities and the strategic need to move on multiple fronts in parallel, if not on all levels, at the same time.

The payment industry is driven by various and connected components. Every new payment system must manage the challenge of the participants’ onboarding, the demand for innovative solutions, and the duty of ensuring smooth and safe operations. Payment systems cannot function by focusing just on maximizing the onboarding of participants, while sidelining the development of their product offering. Conversely, continuous innovation without the buy-in of the users would not materialize in any tangible value.

Driven by that conviction, progressing on multiple fronts has characterized Buna’s journey since its inception in 2018. In the past two years, we have been onboarding new participants, growing our list of currencies, rolling out new products, and setting the basis for interoperability with other payment systems, all in parallel.

Built on Solid Foundations

Progressing on multiple fronts and facing multiple challenges at the same time requires the payment system to be built on solid foundations. Different elements contribute to this, the most crucial being without a doubt the legal construction.

With Buna, we had to be creative to come up with the right legal construction. The cross-border payment system must not to be tied to specific national legislation, while also being fully compliant with the rules that govern each payment we process. To achieve this, we have opted for a construction based on three different layers. At the top layer sits the system’s operator, the Arab Regional Payments Clearing and Settlement Organization (ARPCSO).

ARPCSO has been established as a supranational organization hosted by the United Arab Emirates and benefiting from immunities and privileges. This status provides ARPCSO with the level of independence and neutrality necessary to conduct its mission, in line with the expectations of its participants and every regulator involved in the ecosystem equally. It is particularly relevant to ensure data protection and inviolability of the payment transactions that we process.

In the second layer of our legal construction, ARPCSO’s articles of establishment define Buna as a payment system that should be subject to central bank oversight. This aims to ensure that Buna is designed and operated in a safe, secure, and resilient manner, in line with the applicable standards—including the Principles for Financial Market Infrastructures (PFMI)—to avoid creating financial stability concerns for the currencies it operates.

The third layer of our legal construction consists of the rules that we apply to payment transactions, which is where Buna has been particularly innovative. In Buna, we went beyond the strict obligations of payment systems by embedding sanctions screening and AML/CFT checks in our processes. This ensures that ... 

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Instant Payments, Cross-Border Payments, Interoperability