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Consumer spending surge to drive UAE card payments market to Dh764b by 2028

The UAE is robustly moving towards the digitalisation of payments

The UAE card payments market is forecast to hit Dh764.1 billion in four years on the back of an increasing shift towards electronic payments and a rise in consumer spending.

GlobalData, a data and analytics company, said the predicted market growth would be at a compound annual growth rate of 10.6 per cent between 2024 and 2028.

Card payments value in the UAE registered a growth of 17.7 per cent in 2022, followed by 14.6 per cent in 2023 to reach Dh451.4 billion, supported by a constant consumer shift towards electronic payments and a rise in consumer spending.

“While cash remains the most preferred mode of payment, the dynamic is gradually changing with the rise in card payments. The UAE payment card market can be characterised as rapidly growing and innovative,” said Ravi Sharma, lead banking and payments analyst at GlobalData.

“Persistent efforts from the government as well as financial institutions to promote electronic payments via financial inclusion initiatives as well as developing and expanding payment acceptance infrastructure have encouraged consumers to use electronic payments for day-to-day transactions,” said Sharma.

Sharma said the UAE payment card market is expected to continue its upward growth trajectory supported by the government initiatives promoting electronic payments, rising consumer preference for digital payments, and improving payment infrastructure. The card payments value is expected to register a growth of 13.3 per cent to reach Dh511.4 billion in 2024.

The UAE is robustly moving towards the digitalisation of payments. Various financial inclusion measures by the government and the Central Bank of the UAE such as the introduction of the Wage Protection System and Financial Infrastructure Transformation Program are supporting the cashless infrastructure, which is seen in the expansion of POS terminals and developments in the card and mobile payments space, GlobalData said.

Among POS, mobile POS terminals are emerging as an alternative payment acceptance solution—especially among SMEs (which account for most UAE businesses) due to being comparatively much cheaper than the traditional POS terminals.

The UAE government is taking several other initiatives to reduce the dependence on cash and promote electronic payments thereby benefiting card payments. Some of the notable measures include the launch of the Cashless Dubai initiative to shift all payment transactions such as payment to merchants, and payment for government services to electronic payments within the city.

Total spending using international cards in the UAE witnessed a growth of over 25% in 2023. According to J.K. Khalil, general manager, Mena East, Mastercard, digital payments continue to experience remarkable growth in the UAE, with more users and companies opting for them due to the convenience and security they offer compared to cash payments. Transactions via cards and digital payment solutions in the Middle East and North Africa surged by 20 per cent in value and over 50 percent in volume, indicating a significant shift towards digital payments for everyday expenses.

Mastercard's cross-border payments report for 2023 shows that 48 per cent of UAE residents anticipate an increase in cross-border transactions over the next 12 months, while 36 per cent expect to receive more cross-border payments during the same period.