Our Consulting Editor, Advocate Anjana Bhatia D.I, shares her insights in an internal discussion on the UAE’s future payment system.
E.R- From a banking perspective, how transformative is biometric payment technology for everyday transactions in the UAE? Does it represent an evolution of existing systems or a complete shift in how consumers interact with banks?
ADV. ANJANA- Biometric payment technology is a gradual evolution with gradual structural shift in near future. Currently, biometrics enhance existing payment systems by strengthening authentication replacing passwords, PINs, and SMS-based verification with facial recognition, fingerprints &/ or palm scans.
However, biometric payments may fundamentally change the customer–bank relationship. Instead of relying on physical cards or mobile devices, transactions could become identity-centric; a customer’s verified biometric identity will be the primary payment credential. This marks a transition from “what you have” or “what you know” to “who you are,” positioning banks not just as payment processors but as trusted custodians of digital identity.
E.R- Security is often cited as the biggest advantage of biometric payments—what safeguards are in place to protect users’ biometric data? How does this compare with the risks associated with cards, PINs, or mobile wallets?
ADV. ANJANA- Biometric payment systems are designed with multiple layers of security. Biometric data is typically not as stored images but converted into encrypted templates that cannot be reverse-engineered. These templates are protected through encryption, tokenisation, secure hardware environments, and strict access controls, often combined with user consent and regulatory oversight.
Compared to traditional payment methods, biometric systems significantly limits the risks of card theft, skimming, PIN compromis &/ or OTP interception. While cards and passwords can be lost or shared, biometric identifiers are inherently unique and difficult to replicate. This is due to biometric data is sensitive and permanent, banks and regulators impose strict requirements on data storage, usage, and retention to ensure privacy and consumer protection.
E.R- How prepared are UAE banks and merchants to adopt biometric payment systems at scale? What are the legalities involved? What infrastructure upgrades or regulatory adjustments are still needed?
ADV. ANJANA- UAE banks and merchants are operationally advanced but selectively cautious when it comes to adopting biometric payment systems at scale and are technologically well positioned to adopt biometric payments, having already implemented biometric authentication in digital banking, KYC processes, and mobile applications. Many merchants also operate modern point-of-sale infrastructure capable of supporting biometric upgrades.
As a legal perspective, adoption must comply with UAE banking regulations, data protection laws, cyber security frameworks, and Central Bank directives. Key considerations include explicit customer consent, secure data handling, accountability, and compliance with anti-money laundering and consumer protection rules. At scale, further standardisation, interoperability across payment networks, clarity on liability and dispute resolution will be critical to support widespread deployment.
E.R- . Do you see biometric payments accelerating the UAE’s move toward a cashless economy? Which sectors—retail, transport, government services—are likely to benefit first?
ADV. ANJANA--Biometric payments are set to accelerate the UAE’s transition toward a cashless economy by streamlining transactions; enhancing consumer trust in digital payments. Eliminating the need for cash, cards, or mobile devices at the point of sale, biometrics offer a faster, more convenient, and secure payment experience, encouraging broader adoption of electronic payment systems.
The first sectors to benefit are mostly expected to be retail, particularly high-volume and fast-paced environments transport, where the efficiency with speed is essential; and government services, where secure identity-linked payments can enhance service delivery. In no time, sectors such as hospitality, healthcare, and tourism are also likely to see significant adoption.
E.R- What role does the Central Bank of the UAE play in ensuring trust and adoption of biometric payment systems? How important is regulatory oversight in building public confidence?
ADV. ANJANA-The Central Bank of UAE plays a central role in fostering trust and driving the adoption of biometric payment systems. Mainly establishing clear regulatory standards, overseeing pilot initiatives, and facilitating innovation through regulatory sandboxes, the Central Bank ensures that biometric solutions are rigorously tested, secure, and aligned with the country’s broader financial stability and digital transformation objectives.
Regulatory oversight is essential in building public confidence. Clear rules on data protection, transparency, consumer rights with accountability reassure users that biometric systems are safe, well-governed, and subject to institutional control. Without strong regulatory leadership, large-scale adoption would be difficult to achieve.
E.R- Looking ahead, could biometric payments improve financial inclusion for tourists, new residents, or the unbanked?
ADV. ANJANA- Biometric payments have strong potential to enhance financial inclusion, particularly for tourists, new residents, and individuals with limited access to traditional banking services, though their use for this purpose is still largely in the pilot and conceptual stage. Further visitors biometric payments could enable secure, card-free transactions linked to verified digital identities. Where as new residents, biometric onboarding can simplify account opening and reduce administrative barriers.
The unbanked or under banked, biometric identification can serve as a secure gateway into formal financial systems, especially when combined with simplified digital wallets or government-backed identity platforms. Biometric payments could make financial services more accessible, efficient, and inclusive across the UAE’s diverse population if implemented responsibly.
“The above is a general overview; outcomes differ from case to case and are subject to the discretion of the concerned authorities.”
Adv. Anjana Bhatia D.I is an accomplished Indian Lawyer practicing in India and the UAE. With Over 25 years of experience in Law – Litigation, Corporate, Civil, Criminal, Mediation as well as registered with DIFC Wills and Probate Registry, She provides Legal solutions to clients globally with strategic results.
Additionally, she contributes to Emirates Reporter as our Consulting Editor, offering her perspective on key UAE issues, legal or otherwise..
Contact Details: +971505944896 & +971555944896
