Market Trends of United Arab Emirates Mobile Payments Industry
This section covers the major market trends shaping the UAE Mobile Payments Market according to our research experts:
Increase in the adoption of contactless payments
- Increased adoption of emerging payment methods and consumers' eagerness to reap the benefits of the digital economy in the United Arab Emirates can drive the demand for mobile payments. With the support of various policy reforms and innovations from the leading market players and the rise of the global pandemic, mobile wallets and other contactless payment methods registered strong growth possibilities in the United Arab Emirates.
- As merchants and consumers highly preferred to use touch-free technologies to stay safe throughout the pandemic, the Emirates NBD, one of the leading banking groups in the MENAT (Middle East, North Africa, and Turkey) region, stated that contactless payments now make up almost 84% of all face-to-face card payment transactions. As per the survey conducted by the payments solutions provider Checkout.com, more than half of the consumers in the United Arab Emirates are using digital wallets, leading to a cashless society driving mobile payments.
- With the popularity of Buy Now Pay Later (BNPL) solutions, banks are partnering with digital payment providers to gain market share in the United Arab Emirates. Consumers also find BNPL a proper solution during emergency and big-ticket purchases and as a budget and financial planning tool. In September 2021, the UAE- based digital wallet, Payit, partnered with an omnichannel conversational commerce platform, PLATX, to allow merchants to collect payments through WhatsApp. Such kinds of partnerships increase the use of mobile payments, thereby ensuring safety.
- The government invested heavily to improve internet penetration, which led to the rise of mobile-based e-payment platforms in the United Arab Emirates. The rise of cashless transactions presents opportunities for established and start-up businesses in the United Arab Emirates to capitalize on this. In September 2022, Fintech Firm NymCard expanded its offices in Beirut and Abu Dhabi, looking for a regional base to run their MENA-wide operations.
- All mobile wallet-based payments utilizing Samsung Pay, Apple Pay, and Google Pay, more than doubled post-pandemic. The share of contactless payments of the total value transacted also doubled, indicating the surge in customer convenience in terms of utilizing contactless payment alternatives.
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Rise in the popularity of cryptocurrency
- Acceptance of crypto as a payment method is growing in the UAE market, especially in the banking sector, leading to a rise in mobile payments. Dubai and Abu Dhabi are listed as business investment places in the UAE market. Big crypto exchanges like FTX are setting up shops in Dubai. In September, Palazzo Versace announced its partnership with Binance to accept crypto payments. In August, Abu Dhabi launched a new blockchain and virtual assets strategy to build trust and attract more companies as the crypto industry is growing in the United Arab Emirates.
- According to the survey conducted by YouGov, people in the United Arab Emirates within the age group of 18-34 are associated with cryptocurrency as a method of money transfer and payment. In contrast, people above 55 are mostly unaware of it, which indicates that trust is high among adults for cryptocurrencies in the United Arab Emirates. Also, local businesses like the grocery delivery service, YallaMarket, and property firms are accepting payments in crypto. Such trends in the United Arab Emirates have led to the rise in the popularity of cryptocurrency, thereby leading to mobile payment acceptance.
- The 2021 cryptocurrency market led to renewed interest, especially in the emerging asset class, which is considered an investment opportunity and a payment method. In the United Arab Emirates, 63% of the respondents surveyed by Mastercard asserted that they are more open to using crypto than they were a year ago, and 50% of them are planning to use crypto in the next year, signifying that consumers are interested in spending their crypto assets for everyday purchases.
- The millennials globally and those in the Middle East and Africa are primarily engaged in the cryptocurrency conversation, with more than half (67%) agreeing they are more open to using cryptocurrency. According to consultant Knight Frank, around 25% of Middle East millionaires have already invested in crypto. Mobile payment apps have exploded in popularity, mainly since social distancing has restricted the use of physical cash to some extent, increasing cryptocurrency usage in the United Arab Emirates.
