Card payments market in UAE to cross $200b in 2028

• Various financial inclusion measures by the government and the Central Bank of the UAE are supporting the cashless infrastructure.
• The card payments value is expected to register a growth of 13.3% to reach AED511.4b in 2024.

The card payments in the UAE are expected to cross $200 billion in 2028 from $123 billion in 2023 as consumer shift towards electronic payments and fuelled by 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. 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,” Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, said.

The UAE card payments market is forecast to grow at a compound annual growth rate (CAGR) of 10.6 per cent between 2024 and 2028 to reach AED764.1 billion ($208.2 billion) in 2028.

The UAE is robustly moving towards the digitalisation of payments.

Various financial inclusion measures by the government and the Central Bank of the UAE (CBUAE) such as the introduction of the Wage Protection System and Financial Infrastructure Transformation (FIT) Program are supporting the cashless infrastructure, which is seen in the expansion of PoS terminals and developments in the card and mobile payments space.

Government plays key role

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.

According to the UAE SME Council, as of mid-2022, there were 557,000 SMEs in the country, and the figure is expected to reach one million by 2030.

For example, in May 2022, payment services provider Foloosi partnered with Mastercard to launch the Tap on Phone solution for SMEs. This enables merchants to convert Android mobile devices into payment acceptance terminals that accept payments via cards, mobile wallets, and smartwatches.

“The UAE government is taking several other initiatives to reduce the dependence on cash and promote electronic payments thereby benefiting card payments,” Sharma said.

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.

 “The UAE 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 AED511.4 billion ($139.4 billion) in 2024,” Sharma said.