Abu Dhabi bank launches tokenized payment system using wearables

The Abu Dhabi Islamic Bank has launched a tokenized contactless payment system. 

The “ADIB Pay” system is a partnership with the credit card giant Visa and the China-based Tappy Technologies. ADIB Pay is a physical clasp that can attach to wearable items, removing the need to carry a physical card. This means any watch or bracelet, for example, could end up functioning like smartwatches with payment capabilities, according to a press release, and holders of the ADIB Visa card will be able to make contactless payments with them.

What it means: Tokenization is a system that guards sensitive information and is used to help protect against credit card fraud. A card number is digitally stored and then converted into an algorithmically generated number referred to as a token. 

Why it matters: Tokenized payments are becoming popular around the world. Apple Pay and Google Pay both use this technology. 

Abu Dhabi Islamic Bank said it is the first financial institution in the Middle East to offer a contactless and tokenized payment method. Al-Monitor was unable to immediately find other banks in the region that offer such a feature. 

Google Wallet, which is digital payment system that is part of Google Pay, and Apple Pay both work in some parts of the Middle East. Apple Pay is available in Bahrain, Israel, Jordan, Kuwait, the Palestinian Territories, Qatar, Saudi Arabia and the United Arab Emirates. Google Wallet is available in Israel, Qatar and the UAE. 

Know more: The UAE is quickly becoming a regional fintech hub. Cryptocurrency in particular is growing in the Emirates. The following notable fintech developments occurred in the UAE this year:

• The Abu Dhabi sovereign wealth fund ADQ received approval to launch the Wio digital banking system. 
• The cryptocurrency platforms Bybit and Crypto.com announced moves to Dubai in March, followed by Kraken in Abu Dhabi a month later. 
• Abu Dhabi’s Hub71 startup community announced in May that more fintech startups had joined it. 
• The Emirati artificial intelligence company G42 launched a $10 billion investment fund targeting fintech, digital infrastructure and other sectors. 
• The Dubai-based crypto firm BitOasis announced a payment card linked to cryptocurrency assets in October. 
• In November, the Abu Dhabi General Market launched a cryptocurrency platform.