As Europe wrestles with fragmented regulation and foreign payment dependencies, the UAE has quietly built one of the world’s most advanced financial systems. This piece explores how the Gulf state’s strategic approach to infrastructure, regulation, and public-private collaboration offers a valuable roadmap for European digital payment autonomy.
The future of finance is traditionally thought to be developed in the world’s leading hub — New York. Indeed, this city is home to many payment companies; however, an unexpected rival has been quietly growing in the Gulf. In just under a decade, the United Arab Emirates has reshaped its payment system from scratch to become top-notch. It moved from a cash-heavy traditional system to one of the most modern networks in the world.
Meanwhile, Europe, with all its economic might, remains surprisingly vulnerable. It depends heavily on non-European payment systems and struggles with slow and uneven adoption of digital payment rails. The irony is hard to ignore: while Europe talks about sovereignty, the UAE is already putting in the work to have it not only on paper.
Sovereignty Starts with Payment Autonomy
It is interesting that 2024 was a milestone year for digital payments in Europe. Online payment adoption soared by over 60% and in-store digital payments grew by 25%. But even with these numbers in mind, the use of digital technologies has hit the existing barriers in Europe.
First of all, there is a lack of local solutions. Visa and Mastercard process nearly all card payments across the region. In the UK alone, they handle about 95% of transactions, and in 2023, their combined payment volume in Europe reached close to $4.7 trillion.
The thing is, these firms are American — their infrastructure may be global, but they are not European. And in times of political tension, such dependency could become a risk. Although the ECB has flagged this issue directly, warning of risks, the situation still remains unresolved.
Moreover, Europe’s payment system is nowhere near being unified. Not only are infrastructures varied across member states, but adoption of technologies also differs dramatically. Two banks in the North and South of Italy, for example, may support completely different systems and offer different levels of client orientation.
In fact, though instant credit transfers have been technically available since 2017, only 15% of retail transactions in the eurozone supported it in 2024. Even more concerning is the gap between countries. The Netherlands and Finland lead with nearly universal adoption of instant payments, while many other countries lag far behind.
Regulation, too, is falling short and requires significant improvement. While various regulatory frameworks exist to oversee and facilitate digital payments, they often lag behind the pace of technological innovation, or they are too strict with the emerging players like the recently introduced MiCA. For Europe to truly lead in payments, a more agile and innovation-friendly regulatory environment is essential.
Cross-border payments remain another headache for Europeans. For example, in 2023, sending €5,000 from an EU member state to a Western Balkan country cost about 12 times more than a domestic EU transfer of the same amount. Considering that the demand for international transfers will grow (with projections set to increase by 58% until 2028), this issue has to be solved, and the transfers need to become less costly at some point.
The UAE’s Payment Revolution
Around 10 years ago, the UAE’s financial system had many of the same limitations as Europe’s does now. But in 2023, the Central Bank of the UAE launched its Financial Infrastructure Transformation (FIT) program — an initiative aimed at building a full-stack, sovereign payment system. Just two years later, it was already 85% complete.
What is behind such a fast rebuilding? I believe the core of the UAE’s initiative is precision, because the FIT was not a vague roadmap. There were clear steps for every party to achieve; for example, banks and fintechs were designed to be a 24/7 part of the transformation from the start. So there was no room for fragmented rollouts.
This is how the UAE launched Jaywan — the country’s first domestic payment card, a part of the FIT plan. It is designed to integrate smoothly with existing ATM, POS, and e-commerce systems, offering a much better user experience, lower costs, and compatibility with international payment networks. But more than anything, it shows how to build local infrastructure that does not isolate itself from the global system, but makes a strong competitor able to cooperate with the rest of the world.
And if you think that the UAE has stopped after Jaywan, you are mistaken. Launched the following year after Jaywan, Aani is a new Instant Payments Platform. It helps to pay and receive payments immediately using just a phone number, email, or QR code, without needing to remember long IBANs. It works for both individuals and businesses, and even the government. Aani runs through banking apps or its own interface, and serves the goal of better financial inclusion, helping more Emirati people join the digital economy.
The Lessons That Can Be Learned From
The thing about Europe is that it does not lack talented engineers or resources, so there’s no need for this region to reinvent itself from the ground up. At the same time, it is difficult to say that Europe is not doing anything to progress. The region is eager to adopt modern payment solutions, in particular fintech. Adoption growth is increasing, but something is still lacking for Europe. Could it benefit from a strong example?
The main lesson that it can learn from the UAE is that the transformation of its payment landscape did not happen by chance. It was built intentionally, with structure and an understanding that a secured financial system is the foundation for national economic stability and autonomy.
Put simply, the UAE treated payments as critical infrastructure — no different from building an airport — and approached it with the same seriousness. The result is one of the most digitally mature payment environments in the world that has no plans to stop. In the future, the goal is to boost the digital economy’s share of the UAE’s non-oil GDP from 11.7% to more than 20% over the next 10 years.
Another powerful force behind the UAE’s success was the way it brought the public and private sectors together. Instead of drafting policies in isolation, the government created a shared space where regulators, banks, and fintech companies could co-design solutions. And from what we can see, it ended up very well.
One specific area where Europe can borrow directly is the innovation sandboxes. Along with all initiatives that I have mentioned previously, the UAE created a coordinated ecosystem between onshore regulators and free zones like ADGM and DIFC. Spoiler alert: those efforts paid off. In Dubai, startups that participated in sandbox programs raised 42% more capital on average than their peers. And the market absorbed those innovations quickly, because the rules were transparent.
Europe does have sandboxes, too. The updated PSD3 framework even expands its scope. But adoption across member states is uneven — some countries are running ahead, while others have not moved at all. And it is yet another testimony to a strong need for a pan-European approach towards payment infrastructure. Without it, innovation remains trapped there, and reliance on foreign systems will not disappear.
About the Author
Murad Salikhov – Founder at Cartex, a one-stop platform for financial solutions, serving both B2C and B2B markets.
