MENA-South Asia Payment Corridors: How the Gulf Is Building Real-Time Bridges to the World's Largest Remittance Market

The Gulf Cooperation Council states are the world's largest source of outbound remittances. More than billion flows annually from GCC countries to South Asia alone, driven by the region's substantial expatriate workforce - over 3 million Indians in the UAE, 2.5 million in Saudi Arabia, and significant Pakistani, Bangladeshi, and Filipino communities across the Gulf. Historically, these flows have moved through correspondent banking chains, money transfer operators, and hawala networks, with fees averaging 4-6 percent and settlement times measured in days.

That infrastructure is now being systematically replaced by real-time payment links that connect domestic instant payment systems across borders. Three corridors are at the forefront: UAE-India via Aani-UPI, the Arab region-Pakistan via Buna-Raast, and Saudi Arabia-Southeast Asia via Alipay+. Together, they represent a structural shift in how the world's largest remittance flows are settled.

Corridor 1: UAE-India (Aani-UPI)

The UAE-India corridor is the world's second-largest remittance corridor by value, handling over billion annually - roughly 33 percent of India's total inward remittances. In March 2026, UAE's Aani instant payment platform selected the IRP Gateway architecture for cross-border instant payment interlinking, with India's UPI as the first connected system.

The technical architecture routes payments from Aani (operated by Al Etihad Payments under CBUAE) through the Immediate Payment Service cross-border gateway to NPCI International's UPI infrastructure. A sender in the UAE initiates a payment in AED; the system performs real-time FX conversion and delivers INR to the recipient's Indian bank account, with end-to-end settlement in seconds rather than days.

Merchant-level UPI acceptance has also expanded in the UAE through QR-based partnerships, allowing Indian tourists and residents to pay at Emirati merchants using their Indian payment apps. Cross-border UPI transactions grew more than 20-fold in FY2025, reaching 755,000 transactions - a figure that is still tiny relative to UPI's domestic volumes of 228 billion annual transactions but growing at a rate that suggests the corridor is approaching takeoff.

The significance extends beyond bilateral convenience. India's NPCI International has signed an MoU with the Arab Monetary Fund's Buna platform, potentially opening a pathway for UPI acceptance across the broader Arab region rather than just the UAE.

Corridor 2: Arab Region-Pakistan (Buna-Raast)

In October 2025, the Arab Monetary Fund's Buna cross-border payment platform went live with Pakistan's Raast instant payment system for PKR-denominated cross-border payments. This link enables real-time transfers between any Buna-connected institution in the Arab region and any Raast-connected bank in Pakistan.

The corridor is strategically important because Pakistan is the fourth-largest remittance recipient globally, receiving over billion annually, with a significant share originating from GCC countries. The Buna-Raast link converts what was previously a multi-day, multi-hop correspondent banking flow into a direct, near-instant transfer.

Buna's architecture is worth noting. Unlike bilateral links (such as Aani-UPI), Buna operates as a multilateral hub: any new country that connects to Buna automatically gains access to all other connected countries. Currently operational in multiple Arab currencies, Buna's reach means that the Raast link does not just connect Pakistan to one Gulf state - it connects Pakistan to the entire Buna network.

This hub-and-spoke model contrasts with India's approach of building bilateral links country by country (UPI-PayNow with Singapore, UPI-PromptPay with Thailand, UPI-Aani with UAE). Buna's model scales more efficiently for connecting a single external system to multiple Arab markets simultaneously.

Corridor 3: Saudi Arabia-Southeast Asia (Alipay+)

In September 2025, SAMA signed a cross-border payment agreement with Ant Group's Alipay+ platform. This corridor targets a different demographic than the labour remittance flows of Aani-UPI and Buna-Raast: it is designed primarily for inbound tourism and commerce from Southeast and East Asian markets to Saudi Arabia.

Alipay+ aggregates multiple Asian e-wallets and payment apps - including Alipay (China), GCash (Philippines), Touch 'n Go (Malaysia), and TrueMoney (Thailand) - into a single merchant acceptance interface. Saudi merchants accepting Alipay+ can serve tourists from across Asia without integrating separately with each country's payment ecosystem.

The Saudi corridor is part of the Kingdom's Vision 2030 tourism push, which targets 150 million annual visits. With a growing share of tourists coming from Asian markets where mobile payment apps dominate over cards, Alipay+ acceptance becomes an infrastructure requirement rather than a convenience.

The Structural Shift

These three corridors illustrate a broader transformation: cross-border retail payments are migrating from the correspondent banking model (bank-to-bank, batch-processed, multi-day settlement) to an instant payment interlinking model (system-to-system, real-time, direct settlement).

The drivers are economic and technological:

Cost compression: Instant payment links typically reduce remittance costs to 1-2 percent, well below the correspondent banking average of 4-6 percent and approaching the UN Sustainable Development Goal target of 3 percent. For corridors handling tens of billions of dollars annually, the aggregate savings for senders are substantial.

Speed: Correspondent banking settlement in the GCC-South Asia corridor typically takes 1-3 business days. Instant payment links deliver funds in seconds. For a construction worker in Dubai sending wages home to Kerala, the difference between receiving funds instantly and waiting three days is materially important.

Competition with informal channels: Hawala networks have historically thrived in GCC-South Asia corridors because they offer speed and lower fees than formal banking channels. Instant payment links compete directly with hawala on both dimensions, potentially bringing more remittance flows into the formal, regulated financial system.

Competing Architectures

The three corridors represent three distinct architectural approaches to cross-border instant payments:

Bilateral link (Aani-UPI): Direct connection between two domestic systems. Fast to implement, but does not scale - each new corridor requires a new bilateral agreement, technical integration, and FX arrangement.

Multilateral hub (Buna-Raast): A central platform that connects multiple domestic systems through a single integration. Scales efficiently but requires governance consensus across participating central banks and introduces a single point of dependency.

Commercial aggregator (Alipay+): A private-sector platform that aggregates multiple payment apps and presents a unified interface to merchants. Highly scalable but introduces a commercial intermediary into what are otherwise central bank-to-central bank corridors.

The BIS's Nexus project represents a fourth model - a standardised protocol that any instant payment system can adopt to connect to any other - but Nexus is still in its incorporation phase and has not yet processed live cross-border transactions.

For the MENA-South Asia corridor specifically, the multilateral hub model (Buna) and the bilateral link model (Aani-UPI) are likely to coexist rather than converge. Buna's strength is breadth of Arab-region coverage; Aani-UPI's strength is depth of integration with India's substantial domestic payment ecosystem. A Saudi bank sending to Pakistan will likely use Buna-Raast; a UAE-based Indian expatriate sending money home will use Aani-UPI.

What Practitioners Should Watch

The MENA-South Asia instant payment corridor build-out creates several practical implications:

For banks and PSPs in the Gulf: Integrating with Buna and domestic instant payment links is becoming a competitive necessity. Institutions that cannot offer instant cross-border transfers to South Asia will lose remittance market share to those that can.

For compliance teams: Real-time cross-border payments compress the time available for sanctions screening and AML checks. The shift from batch to real-time processing requires upgrading compliance infrastructure to match - a challenge that regulators on both sides of these corridors are actively addressing.

For card networks: The growth of account-to-account cross-border payments via instant payment links represents a structural threat to card-based remittance products. As A2A corridors mature, the value proposition of card-based cross-border transfers narrows.

The MENA-South Asia payment corridor is being rebuilt in real time. The infrastructure decisions being made now - which links to build, which hubs to join, which architectures to adopt - will determine how hundreds of billions of dollars flow between the Gulf and South Asia for the next decade.

Sources: CBUAE / Al Etihad Payments - Aani Cross-Border IRP Gateway Selection; Arab Monetary Fund - Buna Cross-Border Payment Platform; DD News India - India and UAE to Interlink Payment Systems; IBEF - UPI Goes Global: Cross-Border Transactions Grow 20-Fold; SAMA - Saudi Arabia Signs Cross-Border Payment Agreement with Alipay+.