Buna looks to shape cross-border payments in the Arab region and beyond

He highlighted how Buna’s mission began with solving inefficiencies inherent in traditional cross-border payment systems. "Cross-border payments tend to be complex, slow, and expensive," Manaa noted. These payments often involve numerous intermediaries and complex processes, leading to delays and unpredictable costs. Buna's real-time gross settlement system (RTGS) was designed to overcome these challenges by facilitating faster, more cost-effective transactions across multiple currencies. "We are bringing the same efficiency and simplicity that we see in domestic payments to the cross-border level," Manaa explained. Buna processes transactions in seconds, vastly improving the time and cost efficiency for participating banks and financial institutions.

Since its inception, Buna has integrated six currencies—USD, EUR, SAR, EGP, JOD, and AED—with over 100 financial institutions onboard. According to Manaa, Buna processes 15,000 transactions monthly, with a 15% month-on-month growth rate. By supporting both regional and international currencies, Buna is enabling high-volume payment corridors, particularly in remittances and trade between the Arab region and global markets, to operate more efficiently.

Foreign exchange is critical to cross-border transactions, and Buna has made strides in improving its FX capabilities. Manaa explained that the platform offers two options: utilising correspondent banks for FX transactions or settling FX directly through Buna's marketplace. "Our goal is to make FX transactions more transparent, faster, and cost-effective," he emphasised. The platform’s ability to settle FX transactions in real-time is key to its success, ensuring immediate liquidity and mitigating the common risks associated with delays in FX settlements.

This innovation is particularly crucial for smaller or less liquid currencies, which often struggle with availability and high costs in traditional systems. Buna’s approach, through its marketplace, allows banks to act as FX providers for their currencies, thereby creating more competition and reducing costs. The platform also ensures secure, real-time settlements with a payment-versus-payment model, minimising the risk between FX transactions.

Navigating diverse regulatory environments remains one of the most significant hurdles in cross-border payments, especially in a region comprising 22 countries with varying legal frameworks. Buna has positioned itself as a leader in ensuring compliance with international standards, particularly regarding anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations. "We don’t just leave compliance to the individual banks; we embed compliance checks within Buna itself," Manaa explained. This proactive approach helps streamline the regulatory process and reduce friction, ensuring that all transactions meet the necessary requirements while maintaining operational efficiency.

Buna’s collaboration with central banks and regulators across the region has been instrumental in building trust and ensuring the smooth adoption of the platform. As Manaa pointed out, this collaboration is ongoing, particularly as Buna expands its presence outside the Arab region, with efforts already underway to link with markets in Pakistan, India, and Europe.

Looking to the future, Manaa expressed optimism about Buna’s readiness to adopt new technologies, including blockchain and central bank digital currencies (CBDCs). While the platform is not actively engaged with CBDCs yet, it is preparing for a future where digital currencies may play a more significant role in cross-border payments. "Our focus is on being ready for 'what if' scenarios. If central banks in the region issue digital currencies, Buna will be prepared to handle them," Manaa said.

Additionally, Buna is exploring partnerships and collaborations with global payment networks and providers, to further enhance its role in the global cross-border payment ecosystem. As it continues to expand, Buna is poised to become a central player in the next wave of financial integration across the Arab region and beyond.

In just a few years, Buna has started to reshape the cross-border payments landscape in the Arab region, improving efficiency, reducing costs, and promoting the use of regional currencies. As it continues to innovate and expand, Buna’s influence is set to grow, offering a model for other regions looking to enhance their financial integration.

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