The Role of AFAQ in Improving Cross-Border Payments in the GCC

Introduction

The Committee on Payments and Market Infrastructures (CPMI), in its publication “Can Multilateral Platforms Improve Cross-Border Payments?” (July 2022), stated:

“For decades, cross-border payments were the forgotten corner of the world’s financial plumbing. But in 2020, the G20 countries decided, as a global priority, that these payment systems should be improved, acknowledging that people and economies worldwide stand to benefit from faster, cheaper, more transparent and more inclusive cross-border payment services. Multilateral platforms, i.e., payment systems across multiple jurisdictions, were seen as having a possible role to play in this.”

At the time of this statement, the six countries of the Gulf Cooperation Council (GCC) had already intensively analysed the shortcomings of regional cross-border payments in the Gulf area and drawn conclusions that had yielded tangible outcomes.

In 2016, due to the regional importance of cross-border payments, the Supreme Council of the GCC approved the establishment of the Gulf Payments Company (GPC). The vision and mission of GPC is to provide safe, efficient, and cost-effective cross-border payment services, leveraging cutting-edge technologies in accordance with international standards and best practices.

GPC was established as a private company whose shareholders are exclusively the GCC National Central Banks (NCBs). By doing so, the Gulf Cooperation Council institutionally paved the way for regional payment services integration by means of a specialised, publicly owned “payments infrastructure company.” This setting was and still is unique. It combines the experience and power of central banks in payments with the dynamics of a commercially organised payments company.

In this article, I would like to share with you my experience with this approach as CEO of the Gulf Payments Company for the benefit of those who are considering similar approaches.

Gulf Payments Company (GPC)

Governance Framework

GPC was established to provide a core regional payments infrastructure that would act as the backbone for the broader payments ecosystem in the GCC region. The Company’s headquarters is located in Riyadh, with a further office in Abu Dhabi. GPC is fully owned by the NCBs of the six GCC countries (United Arab Emirates, Kingdom of Bahrain, Kingdom of Saudi Arabia, Sultanate of Oman, State of Qatar, and State of Kuwait). Each NCB is represented by its Governor on the GPC Board, whose role is to direct the GPC business. Each NCB contributes with ...

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