Mastercard has been named as the official payments technology partner of Expo 2020 Dubai with the aim of creating personalised, seamless and cashless experience for millions of visitors from around the world.
The company was today revealed as Expo 2020’s Official Payment Technology Partner at Mastercard’s ‘Connecting Tomorrow’ Forum in Barcelona, Spain.
According to Mastercard, it will explore the use of payment technologies ranging from virtual reality to biometrics and voice shopping.
Global payments technology firm Mastercard will use technology including augmented and virtual reality, and biometrics such as facial and fingerprint recognition, as well as new payment methods including contactless and wearable technologies.
Reem Al Hashimy, UAE Minister of State for International Cooperation and Director General, Dubai Expo 2020 Bureau, said, “World Expos have always offered people their first experience of technologies that will go on to change their everyday lives.
“In the future, people will grow to expect seamless experiences whenever they make a payment. Our partnership with Mastercard will not only make cashless payments easier for our visitors, but also allow them to try new and exciting innovations that enhance and become part of their Expo experience.”
With 25 million visits expected at Expo 2020 Dubai, new and innovative payment solutions will play an essential role in delivering a seamless experience. Expo’s partnership with Mastercard will ensure a fast, intuitive and reliable payment experience.
Raghu Malhotra, president, Middle East and Africa, Mastercard, saids “For more than half a century, Mastercard has been transforming everyday experiences through the power of innovation. Our expertise, strategic partnerships and global network have enabled us to empower citizens, make cities more livable and contribute to a sustainable future and inclusive communities.
“Our collaboration to reimagine the ease of payments as part of a seamless visitor experience at Expo 2020 Dubai represents the beginning of the next era of innovation, where new opportunities in technology are unlocking doors to a priceless tomorrow.”
Revealed exclusively to CoinDesk, two blockchain veterans are gearing up to launch what could be the first cryptocurrency exchange in Bahrain to be licensed by a central bank.
Rain Financial has opened its public waiting list after a year in the Central Bank of Bahrain’s fintech sandbox. Co-founded by Saudi blockchain consultant Abdullah Almoaiqel and Egyptian investor-turned-meetup organizer Yehia Badawy, along with their business partners Joseph Dallago and AJ Nelson, Rain aims to offer both a brokerage for retail crypto investors and an institutional platform along the lines of Coinbase Pro in Silicon Valley, according to Coindesk.
Rain was the first to join Bahrain’s Sandbox in September 2017 and expects to launch in early 2019, while 5 other exchanges still experiment in a closely supervised environment before licensing.
As it stands, few Persian Gulf residents officially participate in the crypto markets, partly for fear of the sector’s shadowy reputation (although Dubai has notably been a pioneer of “smart city” applications of blockchain technology).
Crypto-curious investors “are waiting for the right regulations to be in place and the right partners,” Rain co-founder Badawy said. “We are here to fill this demand, with institutional-grade infrastructure.”
Rain has attracted investments from crypto veterans such as Cumberland Mining founder Mike Komaransky, Bitcoin Core developer Jimmy Song, and BRD crypto wallet cofounder Aaron Lasher.
“Rain founders have been meeting with institutional players throughout the region, from bankers to regulators, seeking their support,” said Coindesk.
Around the Gulf region, regulations have kept the asset from growing. Kuwaiti regulators have essentially banned institutional traders from working with cryptocurrencies. Meanwhile, the Saudi Arabian Monetary Authority asserted in August 2018 that “no parties or individuals are licensed” to trade Bitcoin in the kingdom.
After months of educating regulators about the know-your-customer and anti-money-laundering standards applied by Western exchanges, which it plans to follow, Rain says it has secured banking partners to allow fiat-on ramps in all the local Gulf currencies.
“It’s been a long journey educating our different regulators and partners,” Badawy said.
BusinessLine reports that back in March, Bahrain enabled a ‘regulatory sandbox’ towards emerging as a global cryptocurrency exchange hub.
Amazon Web Services Inc. recently announced that it’s setting up shop in the Middle East for the first time, in Bahrain, in early 2019, with three Availability Zones.
Bahrain’s hopes to leverage technological innovations from a cloud-first position and as data becomes the new currency, Bahrain has many dreams of investing further in startups, as well as financial technology. Khalid Al-Rumaihi chief executive of the Bahrain Economic Development Board said.
“I emphasize this is going to be a game changer, not just for the kingdom of Bahrain, but for the entire Middle East,” Al-Rumaihi concluded. “It’s a small country; we can be nimble, agile, startup-friendly, and … innovate. And so we’re determined to carve a niche in open banking, in cryptocurrency exchanges, these being interesting innovation areas that we think we can excel at.”
According to News.bitcoin, Al Rumaihi mentioned the country has been eyeing the blockchain sector for some time and that he hopes Bahrain can “issue bonds on digital currency.”
Funds Global MENA
Private investors in Bahrain hope to launch a $100 million fund dedicated to financial technology, according to a government official quoted by the India-based Economic Times (ET).
In May a $100 million fund of funds was launched by the Development Bank of Bahrain to focus on financing start-ups in Bahrain and its neighboring states.
Bahrain’s central bank has also set up a division dedicated to regulating the fintech sector and emerging sectors such as cryptocurrency and artificial intelligence, according to ET.
Sandbox licensing galore
The recently launched Bahrain FinTech Bay is the largest fintech hub in the Middle East and North Africa (MENA) region. It is also Bahrain’s first fintech hub.
According to Bitcoin.com, the Central Bank of Bahrain Granted a Sandbox License to Malaysian-based cryptocurrency technology provider Belfrics Global, to open a cryptocurrency exchange in the nation. The approval granted by the central bank of Bahrain is expected to give Belfrics access to the $50 billion digital transaction industry of the Middle Eastern/North African nation.
The company is working closely with central banks in Africa, the Middle East, and Asia to regulate the cryptocurrency space using its innovative KYC-based blockchain, Belrium.”
According to CCN, Stellar obtained the Shariyah Review Bureau (SRB) certificate, as the authority licensed by the Bahrain Central Bank allowed Stellar to establish a presence in the country once the recommendations are fulfilled.
What Stellar is interested in is overseas payments and asset digitization.
Bitcoin.com also reported the Central Bank of Bahrain reportedly granting in June a regulatory sandbox license to the operator of Palmex, a Dubai-based cryptocurrency exchange.
The Dubai International Financial Center (CPI Financial) elaborated then:
Palmex, a professional digital asset exchange powered by Arabianchain Technology, has become the first cryptocurrency exchange in the Middle East and North Africa (MENA) to receive a regulatory sandbox license.
According to its website, the exchange offers “multiple trading pairs including Bitcoin and Dubaicoin DBIX, the first decentralized cryptocurrency in the region,” in addition to ETH, LTC, and XRP.
The MEA region has one of the world’s fastest growing banking sectors, driven by the adoption of mobile applications by younger, tech-hungry consumers and the need to overhaul core banking systems in response to tighter regulation and governance standards.
Open Banking, which McKinsey & Company defines as “a collaborative model in which banking data is shared through APIs between two or more unaffiliated parties to deliver enhanced capabilities to the marketplace” promises to transform the traditional financial services industry globally. But a unique set of circumstances means that the financial services sector in the MEA region is ripe for the benefits promised by Open Banking.
The high proportion of the region’s population who are still unbanked are effectively bypassing the traditional branch-based model and creating demand for innovative services based on smart technology. According to the We Are Social 2018 report, UAE and Kuwait recorded amongst the highest penetration rates for access to the internet at 99 and 98 percent respectively, while the growth of internet users in Africa is up by more than 20 percent year-on-year.
On top of that, initiatives such as Saudi Arabia’s 2030 vision – which seeks to reduce the region’s dependency on oil revenues – is opening up more opportunities for Fintechs that are developing new approaches to payments, money transfers and cash management. A report published in 2017 by the Wamda Research Lab predicted that total investment in new Fintechs would double from the $100 million recorded over the previous decade to $200 million by 2020.
Progressing from competition to collaboration
Much has been made of the competition for customers that Fintechs and Big Techs (including Google, Apple, Facebook and Amazon) have created in financial services. Banks in the MEA region initially shrugged off the challenge, citing long-term customer loyalty to their brands and the superior security of their infrastructures.
Open Banking has put an end to this standoff. It ushers in a new era of collaboration that can only benefit customers and businesses – and ultimately the banks themselves. The past couple of years have seen many examples of banks collaborating with Fintechs to provide the services that customers want, on the mobile platforms that they prefer to use.
The truth is that Fintechs are agile and creative and adept at building innovative new solutions. It has been more difficult for large, traditional banks to progress at the same pace because of their reliance on inflexible legacy bank systems. They can now tap into the innovative thinking presented by Fintechs and partner with selected companies in order to secure IP and build it into their own product offerings.
Collaboration brings benefits to Fintechs too, because they can access larger customer bases and reliable infrastructures. Open Banking means that banks effectively decouple customer channels from the back end. Customers no longer have to use their own bank’s user interface to transact. Account holders can now authorise any software application to do this – and decide whether to use their bank’s channels or not.
Customers can select the apps and services that they want to use at a particular time or life stage, whether that’s paying for a coffee with their phone or using Bluetooth to transfer cash to a friend. There is no longer the same requirement to bank with a single brand for life.
The collaboration fuelled by Open Banking has introduced the innovative ecosystem, a blended model, delivering value and providing greater choice for the customer.
In some ways, an innovative ecosystem is similar to the app stores with which we are all familiar. The standards available to programmers, wherever they operate and whether they are students, independent software vendors, entrepreneurs or Fintechs, mean they can create applications that interact seamlessly with a core platform.
It is likely that banks in the MEA region in particular will see the benefits of maintaining innovative ecosystems, because of the much higher proportion of unbanked consumers who nevertheless wish to pay and manage money via their smartphones.
As ecosystems develop, they attract wider communities of creators seeking ways to deliver value without requiring huge upfront investment. Technology advances also mean that deep programming is replaced by low code, designer toolkits with rapid deployment cycles. The focus has shifted from development to design using pre-packaged design components to invent new customer experiences.
Rise of the robots
Big software vendors like Microsoft and IBM are making services in artificial intelligence, big data analytics and computing power available in the cloud. With so much technology capability, a whole new industry is opening up for entrepreneurs to create the next generation of personalized banking services at low cost.
Robotics process automation (RPA) will increase the pace of digitization across financial services, removing friction and reducing cost in the workflow. As the volumes of data being collected across the world continue to grow and Open Banking regulations encourage greater availability of this data to third parties, many new services are waiting to be created.
Beyond retail – a technology roadmap
There cannot be a bank in the world that is now unaware of the need to digitize processes, build innovative ecosystems and collaborate with third parties to deliver the services customers want to use. But Open Banking is not just about Open APIs, nor is it constrained to retail and consumer applications.
Indeed, some of the biggest opportunities exist in the wholesale/commercial space in reducing friction and increasing throughput by eliminating systems integration bottlenecks. This makes real-time machine to-machine connectivity for straight-through processing and automated decision-making a reality.
Open banking will make it easier for banks to underpin the next generation of financial services being imagined by many people and organizations outside of banks’ four walls today. But for this to happen, there needs to be an appropriate level of investment in banking platforms that can cope with such change.
An indication of how prepared banks are for these changes can be seen in recent research undertaken by Finastra in partnership with the European Financial Management Association (EFMA). Only 26% of respondents surveyed feel ready for Open Banking and 61% plan to make significant IT changes to comply with Open Banking and PSD2.
Over half (58%) believe an ‘out of the box’, ‘bank as a platform’ approach will help them address Open Banking since only the largest tier one banks can afford to invest in their own in-house platforms.
The future of finance is open
The emergence of innovative ecosystems that bring banks and Fintechs together, alongside entrepreneurs, student developers and other third-party providers, signals a positive shift for the MEA banking industry. It is also a prime opportunity to embrace advanced AI, machine learning, voice recognition and APIs to co-create powerful new customer experiences and back-end processes. With the right banking platform in place, the future of finance is well and truly open.