The United Arab Emirates (UAE) is witnessing a digital payment revolution as cash usage declines by 20% and mobile wallets become increasingly popular among younger generations. According to a paper released by Amazon Payment Services, digital payments across key sectors in the UAE are expected to increase at a compound annual growth rate (CAGR) of 18.3% from 2021 to 2023, indicating a significant shift towards digital transactions.
The rise of digital payments in the UAE is largely driven by the adoption of mobile wallets, with nearly half of Gen Z in the Emirates using them for daily payments. This figure is higher than in Saudi Arabia, where 48% of Gen Z use mobile wallets, and Egypt, where the figure stands at 43%. The convenience, speed, and security of digital transactions are driving the trend, with consumers increasingly turning to mobile wallets for their daily payments.
The shift towards digital payments is transforming key sectors in the UAE, including e-commerce, government services, and transportation. E-commerce is one of the fastest-growing sectors in the UAE, with online sales expected to reach $27.2 billion by 2022, according to a report by Dubai Economy. Digital payments are playing a crucial role in the growth of the e-commerce sector, enabling seamless and secure transactions between buyers and sellers.
The UAE government is also embracing digital payments, with many government services now accessible online. The introduction of digital payment options for government services has made it easier for residents and businesses to access essential services and make payments securely and conveniently.
Peter George, managing director for Amazon Payment Services in the Middle East and North Africa (Mena), said Gen Z folks “certainly have the greatest propensity to demand most innovation and they are perhaps the most in-demand of seamless experiences as well. Gen Z is the youngest, but they’re also the most demanding, but that keeps us on our toes as well.”
Peter George said digital payment is growing across mainly hospitality, travel and tourism and aviation sectors.
The transportation sector is another area where digital payments are making significant inroads, with the introduction of contactless payment options on public transport. This has made it easier for commuters to pay for their fares and reduced the need for physical cash transactions, promoting hygiene and convenience.
The rise of digital payments in the UAE is not only a result of the convenience they offer but also the safety and security they provide. Digital transactions are highly secure, with multiple layers of authentication and encryption, reducing the risk of fraud and unauthorized access. With the COVID-19 pandemic driving a global shift towards contactless transactions, the UAE’s digital payment revolution is well-timed and poised for continued growth in the coming years.
The UAE is witnessing a digital payment revolution, with cash usage declining and mobile wallets becoming increasingly popular. Digital payments are transforming key sectors in the country, including e-commerce, government services, and transportation. With the convenience, speed, and security they offer, digital payments are poised for continued growth in the UAE, driving the country towards a cashless future.
