In a significant development for the Maldivian financial sector, three local banks have signed an agreement with the Maldives Monetary Authority (MMA) to join the upcoming Instant Payment System (IPS). Bank of Maldives (BML), Maldives Islamic Bank (MIB), and State Bank of India (SBI) inked the “Participation Agreements” with the central bank in a special ceremony held at the MMA headquarters on Monday.

Scheduled for inauguration by the end of August, the IPS will revolutionise transactions in the Maldives by enabling real-time payments across different banks. Users will no longer need to input account numbers for each transaction, as the system will allow the use of alternative identifiers such as national ID card numbers, mobile or business registration numbers, and even email addresses to facilitate fund transfers.

Speaking at the signing ceremony, MMA Governor Ali Hashim expressed confidence that more banks would join the IPS in the future. Hashim also highlighted that the system has successfully undergone several phases of user acceptance trials, with most of the identified issues already resolved. Pilot testing of the system is set to commence within the next two weeks.

The instant payment system project was commissioned to Finland-based IT and engineering solutions company TietoEVRY Oyj in October 2020. TietoEVRY is renowned for its expertise in developing similar platforms worldwide, including the real-time money transfer platforms Pesalink in Kenya and Swish in Sweden. The company’s flagship IPS Siirto was introduced in Finland in 2017.

The implementation of the instant payment system in the Maldives is just the first step in a comprehensive plan. According to the MMA, the IPS will be accompanied by guidelines and a regulatory framework to ensure smooth operations. The system aims to eliminate the use of cheques and reduce the circulation of cash. The MMA also anticipates that the IPS will help minimise errors and vulnerabilities related to scams and fraud. In the future, the platform could also be used by tenants, utility service providers, and government agencies for requesting payments instead of issuing invoices.