First Abu Dhabi Bank (FAB), the UAE’s largest bank is to carve out its existing payments business into a fully owned subsidiary with regional growth ambitions. This follows recent regulatory approval received from the Central Bank of the UAE.
Focused on direct acquiring, issuer processing and acquiring processing, the payments business will connect FAB’s scale, expertise, network and technology platforms with the region’s dynamic fintech ecosystem to enable customers to excel in the digital economy.
The subsidiary will help government, merchant and institutional clients grow their core businesses by providing customised payment solutions and value-added services to seamlessly integrate and optimise technology investments, driving a superior customer experience and operational cost efficiencies.
The carve out is designed to unlock the growth potential from new geographies and customer segments, accelerating FAB’s digital transformation, enhancing its competitive position in the payments space and delivering long-term value to shareholders. It will support FAB’s digital strategy by exploring new business models and fostering new opportunities to innovate and unlock the transformative power of technology and data to deliver the most secure, convenient and relevant financial services.
André Sayegh, Group Chief Executive Officer of FAB, said: “The UAE is at the forefront of innovation in the financial services sector, underpinned by a vibrant mix of market dynamics, skilled talent and highly developed infrastructure. FAB is recognised as the fastest-growing payment service provider in the UAE and a significant enabler of the region’s digital economy. As the payments industry continues to move at a rapid pace, our ambition is to remain at the forefront, creating opportunities to collaborate with the right Fintechs and strategic partners to drive the payments ecosystem, deliver value and enable cost efficiencies.
“A fully owned subsidiary will open up the full potential of FAB’s payment business and commercialise our processing offering at scale, across a broad range of customers and partners. In addition to our involvement in the new digital bank being created by ADQ, this move represents another significant long-term strategic opportunity for FAB, forming a key part of our growth and transformation agenda, cementing our leadership position in the region’s rapidly expanding payments sector, and unlocking new possibilities for our bank, partners, customers and shareholders.”
The bank has also recently announced a partnership with Visa to bring an innovative mobile acceptance solution to UAE merchants. The new solution, “Tap to Phone”, will enable merchants to accept contactless payments through their Android smartphone devices. Through this partnership, FAB will further consolidate its position as the leading payment service provider in the country, supporting the UAE’s strategy to promote digital payments and achieve a cashless economy. The solution will allow merchants to accept contactless card payments via a Near-Field-Based (NFC) based Android smartphone without the need to invest in a separate physical device.
“The partnership of two leading organisations, Visa and FAB, to deliver the new “Tap to Phone” solution will further boost the digital transformation of the payments landscape and the overall enhancement of consumer payments services,” said Hana Al Rostamani, Deputy Group CEO and Head of Personal Banking at FAB. “The extension of our payments offerings into all sectors comes at a pivotal time. Consumers are increasingly shifting to electronic payments for all manner of purchases and the effects of Covid-19 has accelerated that trend With payments, which were traditionally cash reliant in the UAE, this additional service is significant to customers. FAB is facilitating the move by extending payment processing through point of sale and e-commerce channels.”
Shahebaz Khan, Visa’s General Manager for the UAE said: “Visa’s recent Back to Business study revealed that more than 70% of UAE consumers surveyed would not shop at a store that only offers payment methods requiring contact with a cashier or a card reader, making it critical for businesses to expand their acceptance methods beyond cash. The same study also showed that despite their willingness to adapt to new trends, 92% of small businesses in the UAE have concerns shifting their business online, highlighting the need for additional support to help SMBs transition to digital. “Tap to Phone” will enable merchants in the UAE to accept contactless payments in an easy, and cost-effective way and help them reinvent the physical shopping experience for consumers. We are delighted to partner with FAB to bring “Tap to Phone” soon to UAE merchants, the latest in our efforts to support local businesses not only overcome the challenges created by the pandemic but also to thrive as economies recover.”