The UAE payments industry is poised to see a significant increase in revenue over the next five years, jumping to $19.8 billion by 2027. According to a report by Boston Consulting Group (BCG), this growth is expected to be driven by a compound annual growth rate (CAGR) of 3.6 per cent.
The report highlights that the UAE payments sector is uniquely positioned to redefine its role and services in response to changes in the global payments ecosystem. The region is also an early adopter of technological advancements powered by GenAI, which is expected to drive growth and improve customer pathways.
In comparison to the global payment industry, the UAE’s revenue pool is expected to grow at a slower pace, but with steady growth anticipated in the coming years. The report also notes that the UAE’s payments market is dominated by cash transactions, accounting for over 64 per cent of overall payment volume in 2022.
Managing Director and Partner at BCG, Mohammad Khan, emphasized the UAE’s resilience in the face of global challenges, attributing the industry’s growth to the transition from cash to non-cash transactions. This growth is further supported by technological advancements, government initiatives, and changing consumer preferences towards digital payments.
The report also highlights the disruptions and challenges facing the UAE payments industry, such as the rapid growth of real-time payments, new market entrants, and the commoditization of basic payment processing. Key areas shaping the industry’s strategic direction include operational resilience, Generative AI, risk management and compliance, and mergers and acquisitions.
Overall, the report emphasizes the evolving landscape of the UAE payments industry and the importance of strategic planning, partnerships, and technological integration to maintain a competitive edge. In conclusion, the report underscores the significance of GenAI in the payments sector and its potential to enhance compliance measures as it becomes more integrated into core organizational processes.
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