Are the days numbered for cash? UAE digital payments forecast to hit $14bn by 2030

As purchasing habits shifted almost overnight from offline to online and cash to non cash following Covid-19, Boston Consulting Group (BCG) said the payments industry subsequently suffered an impact far less severe than initially anticipated.

It added that the UAE shares many commonalities with other regional and international geographies, including manageable revenue losses considering recent turbulence and optimistic projections for the future.

From 2015-2020, BCG said national payment revenues increased by 17 percent to $8.4 billion and they could reach $14 billion by 2030.

Furthermore, the report added that the UAE has the potential to record sustained growth over the next five years and beyond, with a compound annual growth rate of 5.3 percent from 2020 to 2030.

“Our comprehensive analysis leads to a sure conclusion that the payments industry of the UAE has played its part in the country’s economic recovery,” said Mohammad Khan, partner, BCG.

“New consumer preferences and the emergence of digital channels have collectively helped to accelerate e-commerce enablement, broadening fulfillment options and streamlining point-of-sale and online checkout in the process. Such trends have laid the foundations for a new chapter of payments industry vibrancy and success for all concerned in the years ahead, something which is emphasised through notable growth projections.”

BCG said the $14 billion forecast would represent an increase of 67 percent from 2020, while the number of transactions is expected to rise from approximately 644 million to over 1.2 billion during the same period, up by 94 percent.

“Innovation in the UAE’s payments industry will continue to gain traction over the decade, which will, in turn, lead to record numbers of digital transactions being registered continuously,” said Markus Massi, managing director and senior partner, BCG.

“Services will become integrated with more digital ecosystems and thus present consumers with more seamless options, with the retail segment set to capitalise as a result.”

“Recent times have already demonstrated the UAE payment industry’s ability to respond to changing environments, and the coming period should be utilised to take note of market forecasts and prepare accordingly,” added Khan.