The Maldives Monetary Authority (MMA) has released its latest Payments Bulletin, demonstrating a significant shift towards digital financial technologies in 2024, with account transfers, card usage, and the Favara instant payment system rapidly replacing traditional transaction methods.
The data reveals a remarkable surge in digital transactions, with account-to-account transfers reaching an impressive 132 million transactions valued at over MVR 768 billion—a 20 percent increase from the previous year. Favara, the country’s instant payment system, has become the backbone of inter-bank retail payments, processing more than 84 percent of transactions.
Key highlights of the digital payment transformation include:
Account Transfers and Favara System:
– Five banks fully integrated into Favara
– Two additional banks in final testing stages
– 7.7 million transactions processed, totaling MVR 23.7 billion in its first full operational year
The shift towards digital platforms has precipitated a significant decline in traditional payment methods. Cheque usage dropped 17 percent in 2024, with total volume falling to 388,000 and value decreasing to MVR 49.5 billion. Compared to 2020, cheque transactions have more than halved, underscoring the rapid digital transformation.
Cash withdrawal patterns also reflect changing financial behaviors. While overall withdrawal volume decreased by 9 percent, the total value remained stable at MVR 34.8 billion. International cash withdrawals experienced a more dramatic decline, falling 45 percent in volume and 31 percent in value, indicating a growing preference for digital payment alternatives.
Card payment ecosystems demonstrated robust growth in 2024:
– Over 80 million transactions, a 26 percent year-on-year increase
– Debit cards dominated transaction volumes
– Credit card usage grew by 33 percent
– Prepaid card transactions rose nearly 50 percent domestically
– Contactless payments represented over 75 percent of debit card point-of-sale transactions
Electronic money services also showed promising development, with over 25,000 active e-money wallets facilitating MVR 459 million in transactions. Bill payments and mobile airtime top-ups remained the primary use cases for these digital wallets.
The report also highlighted ongoing challenges in the financial landscape, particularly regarding remittances. Outward remittances reached USD 7.4 billion, with Bangladesh as the primary recipient, while inward remittances stood at USD 5.8 billion. Foreign workers accounted for 92 percent of outward remittances, raising concerns about potential long-term economic implications.
While the bulletin demonstrates a financial system rapidly modernizing through digital innovation, it simultaneously underscores the complex economic dynamics facing the Maldives. The accelerating digital adoption presents both opportunities and challenges, particularly concerning foreign exchange reserves and evolving consumer financial behaviors.
