Avanza Solutions has implemented a citywide blockchain based payments platform in Dubai.
Avanza’s Blockchain Platform Cipher was selected by the Smart Dubai Office under the Dubai Future Accelerators (DFA) programme. The programme pairs companies with government entities in Dubai to create breakthrough solutions together.
Through Cipher, Avanza has successfully delivered an agile and instant reconciliation and settlement platform to the Smart Dubai Office for the DubaiPay payment platform. Smart Dubai Office is rolling out Cipher across all its existing 38 partner government entities, partner financial institutions and departments, to set up the first blockchain based building block within its financial plumbing.
This is in line with the vision of His Highness Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum’s to transform Dubai into the first Government in the world to execute all applicable transactions via blockchain by 2020.
We spoke to Ali Safri Free, Lead Consultant of Avanza Solutions, about DubaiPay.
How do residents of Dubai use the system? Is it a case of using it to settle bills with government departments?
Yes. What the citizens do is go to different government websites or they can have a Dubai Pay account and from this they can make payments. What they can do is that they can enquire about their bills and pay them. It’s a very simple step for them, but at the back-end of the system there is a whole new science that happens which regards reconciliation and settlements.
Tell us about the back-end of the system.
At the backend Blockchain will enable the payment of the funds that are being collected by the banks when they pay for a particular bill and get it into the hands of those entities for which the payment funds were collected. For example, the payment of a bill to the Dubai Electricity and Water Authority (DEWA) requires a certain number of steps to get the money from the customer to DEWA. This particular process is quite inefficient but Blockchain will enable the process so that the funds can be transferred in an optimised time.
How secure is Blockchain?
Blockchain is built under cryptographic principles based on public-private key cryptography so it is robust. Blockchain provides more transparency and is more secure compared to traditional systems.
What was the specific role Avanza played with this system?
We conceived the system, designed it and implemented the solution. We have acted as the provider or the service partner for Dubai Smart Government to optimise this backend reconciliation and settlement process using this particular Blockchain system.
Is this system more efficient than what was happening before?
Yes. The old process was quite inefficient. It can take more than a month to settle a bill but Blockchain is more robust and efficient.
There are multiple government departments where the consumers go and pay the bill. In order to make the collections, Dubai Smart Government has provided one service whereby when you click on the pay button a pop-up comes where you can either connect directly to the biller or provide your credit card number, so they route their transaction to the appropriate backend bank. The bank creates a personal account and informs the biller that the bill is paid.
So this is how it happens – at the backend there is a reconciliation and settlement process because the funds are collected by the bank, but they need to go to the entity for which the funds were actually for, because Dubai Smart Government is only facilitating the collection of funds.