UAE payment revenues, particularly via credit cards and debit cards, will grow to $18.7bn in the next ten years according to a new report.
Boston Consulting Group (BCG) forecasts an annual compound growth rate of 7.7% through to 2031.
Mohammad Khan, managing director & Partner, BCG, said: “The UAE continues to see robust growth in payments and fintech activity in general.
Growing population driving UAE payment revenues
“This year alone we have seen the launch of multiple digital banks as well as specialized payments players”.
Factors such as the country’s young, tech-savvy, and fast-growing population are crucial to the growth of UAE payment revenues.
“The nation’s bid to become a crypto and fintech hub, and the planned launch of a domestic payments scheme are resulting in greater competition and paving the way for future growth,” said Mr Khan.
“Cross-industry participation in digital payments will provide an added impetus to the region’s already burgeoning sector.”
Four trends are driving the global payments industry and these will have an impact on the UAE in the short to medium-term.
Demand for electronic payments is becoming much stronger, with BCG saying “the sustained cash-to-noncash conversion, the ongoing growth of e-commerce, and the increasing integration of payments into retail and corporate customer journeys will drive payments revenues globally”.
The era of non-profitable growth is over. “Payments players will have to demonstrate solid profitability to attract both customers and investors,” says the report, titled “Global Payments 2022: The New Growth Game.”
Further global trends identified by BCG are central bank digital currencies gaining momentum and payment businesses being under increasing scrutiny from regulators.
“Central banks are tailoring digital currencies to complement cash with digital central bank money to implement monetary policy faster,” said the report.
“Market participants must address risk dimensions, be it financial, compliance, cyber, or crypto to install the required safeguards for their businesses on their path to growth..
“Payments revenues in the GCC will see acceleration on the back of real-time payments infrastructure, a growing number of specialized payments players bringing new solutions to the market, and enabling policies from governments,” concluded Khan.
BCG’s 20th annual analysis of the payments industry forecasts annual revenue growth of 8.3% from 2021 to 2026, and of 7.6% from 2026 to 2031.
The report estimates that total global payments revenues will reach $3.3tn by 2031.
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