New pan-regional real-time gross settlement system targets efficiency gains as digital payments surge across Gulf markets.

The GCC’s newly operational AFAQ real‑time gross settlement system is the flagship initiative expected to accelerate regional cross‑border payment growth from 2024, amid rapid digital adoption and rising trade volumes. The pan‑regional RTGS replaces existing bilateral links between Gulf currencies with a common multilateral platform enabling real‑time settlement, a structural upgrade that corporate treasurers and central banks project will unlock efficiency gains across the region’s $1.4 trillion cross‑border trade corridor.

AFAQ: The Pan‑Regional RTGS Initiative

The GCC Supreme Council, comprised of the heads of state of each member country, decided in 2016 to create a new robust pan‑regional payment system capable of growing trade, capital, and remittance flows, and potentially unlocking higher economic growth. The decision reflected a growing recognition that reliance on correspondent banking for cross‑border payments among the bloc’s most important trading partners represented a missed opportunity for a rapidly integrating regional economy.

The result is AFAQ, a common platform designed to replace the previous patchwork of bilateral links between GCC currencies. By providing a single point of access for all participants, AFAQ enables real‑time settlement without the delays and costs of correspondent banking. The system’s operational launch positions the GCC to capture efficiencies that international bodies, including the G20, have identified as critical for enhancing cross‑border payments. The Financial Stability Board’s 2024 progress report notes that multilateral arrangements such as common platform solutions are expected to gain traction in the medium term, complementing the bilateral links that currently dominate high‑volume corridors.

Corporate treasurers across the region have expressed strong support for AFAQ, according to Barclays, with payment volumes on the system expected to grow in the coming months as treasury transformation opportunities materialise. Firms will need to update their enterprise resource planning platforms and treasury management systems to integrate with the new infrastructure, but the anticipated cost savings and liquidity management benefits are driving adoption. Barclays expects payment volumes to increase as the system’s real‑time settlement capability enables improved cash visibility and working capital optimisation across GCC markets.

Digital Payment Adoption as a Catalyst

The new infrastructure enters a market where digital payment usage has already reached critical mass, creating strong demand for faster, cheaper cross‑border settlement. In Saudi Arabia, electronic payments made up 79% of all retail transactions in 2024, up from 70% in 2023, according to P&S Market Research. This momentum is reinforced by major private‑sector investments: Mastercard launched advanced local processing infrastructure in the Kingdom in October 2024 under SAMA guidance, and the Saudi Central Bank signed an agreement with Ant International to enable Alipay+ payments by 2026, leveraging the national payment system ‘mada’.

Consumer behaviour across the smaller GCC economies confirms a structural shift toward mobile‑first commerce, directly increasing transaction volumes and the need for scalable, secure payment gateway solutions. Mobile commerce adoption remained particularly strong across Kuwait, Qatar, Oman, and Bahrain during 2024.

Share of online orders (%) (%)Source: Orionmano Industries

Sustained e‑commerce expansion across major GCC markets is structurally increasing online transaction volumes and merchant participation, according to MarkNtel Advisors. This momentum will continue to drive demand for advanced payment gateways, supporting long‑term market growth. The convergence of high mobile adoption and rising transaction volumes creates a ready user base for AFAQ’s real‑time cross‑border capabilities, particularly for the growing share of retail and SMB cross‑border payments linked to e‑commerce.

Market Growth Drivers and Ecosystem

The volume of underlying trade provides the most fundamental growth driver. GCC cross‑border trade reached approximately $1.4 trillion, according to Research and Markets, driving demand for efficient cross‑border payment solutions. The bloc’s strategic location and multilateral trade agreements facilitate access to global markets, and the World Bank projects that trade volumes will continue to rise. As cross‑border transactions increase in both number and value, the inefficiencies of legacy correspondent banking become more costly, strengthening the business case for AFAQ.

The GCC also hosts over 250 fintech startups, enabling partnerships that improve payment solutions and market penetration. Collaborations between traditional banks and fintech firms are expected to enhance service offerings and reduce operational costs. In June 2024, Saudi entrepreneurs launched Thimsa, a fintech startup targeting instant B2B payments and payouts in the UAE and Bahrain, reflecting the region’s open banking growth. Payment gateway providers that successfully integrate open banking capabilities will be positioned to capture higher market share, the research notes.

Private‑sector investment continues to accelerate. Tabby Technologies completed the acquisition of Saudi‑based digital wallet Tweeq in September 2024, expanding its payment offerings. The rapid expansion of fintech ecosystems, particularly in Saudi Arabia and the UAE, has created an environment where payment gateways serve as critical infrastructure enabling the region’s economic diversification goals.

With AFAQ operational and digital payment penetration deepening across the GCC, the region is expected to see sustained growth in cross‑border payment volumes through 2026 and beyond, supported by multilateral agreements and global roadmaps such as the G20’s cross‑border payment enhancement framework. The FSB’s 2024 survey indicates that fast payment systems and their interlinking hold significant promise for enhancing cross‑border retail payments and international remittances in the short term, with jurisdictions in the Middle East and Africa currently focusing on bilateral links and multilateral arrangements likely to gain further traction. AFAQ positions the GCC to lead that evolution within the bloc’s own markets.