The Hottest Trends that are Changing the Payments Industry in the UAE
One of the most dynamic and innovative economies in the GCC/MENA region, the UAE is now witnessing an increasing number of online transactions. While the pandemic might have propelled the trend towards becoming a cashless economy, digital payments are touted to become the normal way of life.
For instance, the 2021 Stay Secure Survey conducted by Visa, in association with Dubai Police and Dubai Economy, reveals that cash usage is unlikely to return to pre-pandemic levels, with 63% of consumers reporting high confidence in digital payments even in-store purchases.
A high level of mobile penetration (nearly 83% in 2020) in the economy is further supporting the trend. A high expat population base and a vibrant tourist economy further drive the demand for cashless money transfer services. Approximately, 88.52% of the UAE population consists of expats, particularly in Dubai, who seek fast and secure ways of sending money abroad, back to their families. Let’s look at some of the hottest trends that are defining the payments industry in the UAE:
1. Increased Government Steps and Regulatory Support for Digital Payments
Legacy banks have realized the increased propensity of millennial and Gen Z consumers towards digital transactions. Therefore, they’re aiming to innovate themselves and the money transfer services they offer. Many banks are partnering with fintech companies to launch neo banks; or purely digital banks with no physical branches.
Neo banks not only offer low fee structure, and competitive interest rates but also zero hassles of paperwork. In 2021, Dubai-based YAP partnered with RAKBANK to launch the first independent digital banking platform. Other examples include MashreqNEO by Mashreq Bank and Liv by Emirates NBD.
3. Ecommerce as a Catalyst for Digital Payments
Ecommerce platforms are growing in popularity as investments in online shopping continue to move north. Supported by high mobile penetration, modern digital payments, and strong government support, the total market value of retail e-commerce will reach $8 billion by 2025.
As the platforms keep improving their services, customers swarm to such platforms. Simultaneously, digital payments also continue to rise. The preference for cashless transactions is expected to continue post-pandemic as well, which means consumers will demand newer ways of convenient, secure, and fast digital payment methods.
Whether it is services for sending money abroad or making online payments, the UAE promises emerge as a hotbed for innovations in the digital payments industry.