Favara (payment system)
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| Product type | Instant inter-bank payment system |
|---|---|
| Owner | Maldives Monetary Authority |
| Produced by | Maldives Monetary Authority |
| Country | Maldives |
| Introduced | 26 August 2023 |
| Markets |  Maldives |
| Website | www |
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Favara is a real-time payment system in the Maldives, developed as part of the Maldives Payment System Development Project (MPSD) led by the Maldives Monetary Authority (MMA). Launched on 26 August 2023[1][2], the system aims to improve the speed, convenience, and security of financial transactions across the island nation. Initially integrated with three key financial institutions[3], Favara was designed to address both geographical and infrastructural challenges to facilitate digital payments in urban and remote areas. As a significant advancement in the country's financial ecosystem, Favara is seen to contribute to broader financial inclusivity goals, aligning with current trends in the fields of fintech and digital banking.
History[edit]
The Maldives Payment System Development Project (MPSD) was initiated by the Maldives Monetary Authority (MMA) to modernise and streamline the financial payment systems in the Maldives[4]. As a multi-phase programme, its primary objective was to overcome infrastructural limitations and promote financial inclusivity across the Maldivian archipelago. Favara was developed as a key component of this initiative, providing an Instant Payment System (IPS) that operates year-round.
The system was initially developed in collaboration with Bank of Maldives, Maldives Islamic Bank[5], and State Bank of India. These banks serve as the initial participants, providing their customers with the ability to conduct inter-bank transactions. Further expansion plans are in place to onboard additional Maldivian banks and also to allow Payment Service Providers (PSPs) to participate in the future, thereby fostering competition and innovation in the digital payments landscape.
In addition to the technological developments, the project also emphasized creating a robust regulatory framework. This dual approach ensures that the platform adheres to both local and international compliance standards, contributing to its long-term viability and adoption.
Over the years, the MPSD project introduced several layers of functionality and security features to Favara. The system transitioned to the global standard for payments messaging format, ISO 20022, which allows for richer and better-structured data exchange. It also integrated with the Unified Payment Gateway (UPG), an API-based access layer that consolidates various financial services.
Feature[edit]
Favara was designed to serve as a central hub that integrated all commercial banks in the Maldives, functioning as both Account Information Service Providers and potential Payment Service Providers. The system employed a Unified Payment Gateway (UPG), an API-based layer that facilitated digital Know Your Customer (KYC) verification through connectivity to national databases. Favara supported a wide variety of retail payments and employed multi-factor authentication mechanisms for enhanced security. Unique features like smart addressing were introduced, enabling payments through various identifiers such as national identification numbers or email addresses. Payments were processed in real-time, providing immediate transactional capabilities for individual consumers, businesses, and government agencies.
In addition to facilitating credit transfers, Favara introduced innovative payment features such as 'Favara ID' and 'Favara Request'. The former allowed customers to use easy-to-remember identifiers like phone numbers or email addresses, eliminating the need to use traditional account numbers. The latter feature enabled customers and businesses to send payment requests to other users, either within the same bank or across different banks. These features were particularly useful for both individual consumers and corporate entities, and they aligned Favara with contemporary practices in the digital payments industry.
References[edit]
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