Spare and Xsquare partner on UAE Pay by Bank tools for B2B payments

Spare has announced a partnership with Xsquare to embed Pay by Bank capabilities into business payment workflows in the UAE, targeting areas including payables, receivables and cross-border payments. The companies said the arrangement is powered by the Central Bank of the UAE’s Open Finance Framework and is intended to reduce payment costs and speed up settlement for business users.

Xsquare is a UAE-based B2B payments company, while Spare describes itself as an Open Finance infrastructure provider. Under the agreement, Xsquare clients will gain access to Spare’s infrastructure for account-to-account payments, according to Spare’s announcement.

The companies framed the product as an alternative to card-based business payments. Spare said businesses face transaction costs of 2 percent to 3 percent on card payments, as well as settlement delays that can affect cash flow and operational planning. It said Pay by Bank can support lower transaction costs and near real-time settlement.

How the payment model works

Pay by Bank uses account-to-account payment rails rather than card networks. In practice, a business payment can be initiated from a bank account through an authorised interface, with Open Finance infrastructure connecting the application or platform to participating financial institutions. The model can reduce the number of intermediaries in a transaction and give platforms a more direct route to initiate and track payments.

Spare said its unified application programming interface gives platforms a single connection point for multiple payment use cases. The company said this reduces the need for businesses to maintain separate bank integrations or manage fragmented banking relationships as transaction volumes increase.

The partnership is designed to bring those functions into Xsquare’s payment orchestration layer. Xsquare said the collaboration combines regulated account-to-account payment rails with its B2B payment infrastructure, supporting its aim to build what it called a unified financial operating system for businesses.

Dalal AlRayes, co-founder and chief executive of Spare, said B2B payments in the region remain fragmented, costly and operationally complex. She said the Xsquare partnership would bring Open Finance capabilities into business payment workflows and help companies reduce friction across markets.

Ashwin Shenoy, chief product officer and co-founder of Xsquare, said Open Finance is set to reshape business transactions and that the UAE is positioned to lead that shift. He said the partnership supports Xsquare’s broader vision for business financial operations.

Spare said the agreement reflects the expansion of Open Finance beyond consumer use cases into B2B financial infrastructure. The company also linked the partnership to its recent launch of an International Open Finance Payments solution in the UAE, which it said forms part of its plan to extend Open Finance infrastructure across business payment applications in the region.

This story draws on original reporting from Finextra Research.