Pay by Bank UAE: Spare and Xsquare Partner on Open Finance

What happened

Spare, an Open Finance infrastructure provider, has entered a strategic partnership with Xsquare, a UAE-based business-to-business payments company, to deploy Pay by Bank capabilities across Xsquare's client base. The arrangement sees Xsquare licence Spare's software to power account-to-account payment flows, operating within the framework established by the Central Bank of the UAE (CBUAE) for Open Finance.

Xsquare's core proposition is helping businesses optimise their payment strategies, and the addition of Pay by Bank — which routes transactions directly between bank accounts rather than through card networks — extends that offering into a channel that has gained significant regulatory backing in the UAE. The CBUAE's Open Finance Framework provides the licensing and data-sharing architecture that makes such account-to-account payments commercially viable at scale in the region.

Why it matters

Pay by Bank is not merely a back-office efficiency play; it reshapes the moment of payment — one of the highest-friction, highest-anxiety touchpoints in any customer journey. When a business removes card-network intermediaries, it can reduce checkout abandonment driven by declined cards, unfamiliar payment-processor branding, or surcharge sticker shock. From a behavioural-economics perspective, fewer steps and fewer unexpected costs at the point of commitment directly reduce the cognitive load that causes last-minute drop-off.

For service designers in the MENA region, this partnership signals that the infrastructure layer for Open Finance is maturing rapidly. The CBUAE framework gives operators a regulated, standardised rail on which to build genuinely seamless payment experiences — moving the region closer to the frictionless checkout models that have demonstrably lifted conversion in markets such as the UK and the Netherlands, where Pay by Bank adoption is already mainstream.

The Renascence take

Most commentary on Open Finance focuses on data portability and lending decisions. The more immediate customer-experience dividend, however, sits at the payment moment itself — and that is where this partnership quietly operates.

Businesses in the UAE tend to treat payment infrastructure as a cost-reduction lever, benchmarking on transaction fees rather than on conversion rates or customer trust signals. That framing misses the point. Pay by Bank, when implemented thoughtfully, removes the psychological friction of entering card details into an unfamiliar merchant interface — a friction that behavioural research consistently links to cart abandonment and reduced repeat purchase intent. The operators who will extract the most value from Spare's infrastructure are those who redesign the entire checkout experience around the new capability, rather than simply swapping one payment button for another. Xsquare's B2B focus is also worth watching: business buyers are not immune to payment friction, and smoother settlement experiences have a direct knock-on effect on supplier relationships and repeat-order behaviour.