The market for card payments in the United Araba Emirates looks set to grow annually by10.6% between 2024 and 2028. Analytics firm GlobalData says it’s expected to reach AED764.1 billion ($208.2 billion) in 2018. It has also revealed that card payments value in the UAE registered a growth of 17.7% in 2022, followed by 14.6% in 2023.
This is being supported by a constant consumer shift towards electronic payments and a rise in consumer spending. Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “While cash remains the most preferred mode of payment, the dynamic is gradually changing with the rise in card payments”. He says 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 appear to be paying off. Analysts say that like many countries, the UAE is robustly moving towards the digitalisation of payments. Added to this, 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.
According to the UAE SME Council, as of mid-2022, there were 557,000 small and medium enterprises in the country, and the figure is expected to reach one million by 2030. These businesses are being encouraged to go cashless with incentives being offered. 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 also 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. Going cashless is also see as more secure with some countries affected by cash in transit robberies and theft and these new moves are see as a way to counter this.
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