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United Arab Emirates Country Report

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  • Published Date: September 2021

A comprehensive overview of the cards, payments and consumer banking market in the UAE, with clearsighted commentary backed by relevant data. 

The current surge in government-sponsored digitalisation points towards a huge opportunity of growth in electronic payments. E-commerce platforms have soared over the past two years, driving growth in digital payments and the use of credit and debit cards.

As throughout the Middle East region, the payments landscape here is rapidly evolving, with payment service providers populating and evolving the space through M&A centred around payments processing and acquiring.

Credit card issuers have traditionally focused on the premium segment, leaving a vast cohort in the low-to-mid income bracket, especially foreign workers, uncatered for. As e-commerce growth continues, the opportunity will only grow bigger for innovative cards programmes that utilise the ubiquitous smartphone and virtual card solutions for neglected segments.

What you can learn from this UAE payments report:

  •   How cards' growing popularity is reshaping market.
  •   The impact of the state's cashless agenda.
  •   What e-commerce's leap means for payments.
  •   Why prepaid cards have risen sharply.

UAE CARDS AND PAYMENTS REPORT | KEY FACTS

  • The position of cash as the most popular payment option is slowly being eroded by government strategies, rapid growth in e-commerce platforms and the wider expansion of electronic payment systems.
  • Total payment card purchase volume reached $53bn in 2020, an increase of five percent compared to the year before.
  • This is one of the most profitable credit cards markets in the world on a per-card basis: the average pre-tax profit per credit card amounted to $125 in 2020. The preponderance of Premium credit cards, relatively high MSCs and high volumes of cross-border usage all contribute.
  • Despite this, industry-wide pre-tax profitability witnessed a substantial decline during 2020. Pandemic-related restrictions meant purchase volume flatlined, while credit card outstandings decreased.
  • Banks are stepping up digital transformation efforts, with staff headcounts being sharply cut. At the point of sale, the number of terminals increased by over half during the five years to 2020.
  • The UAE's acquiring market is concentrated, with almost three-quarters of total acquired billed volume in the hands of two players: Network international and First Abu Dhabi Bank
  • Islamic banking is growing: 60 percent of residents here used at least one such product in 2020, up from 47 percent five years earlier. Ten Islamic banks in the Emirates had a combined asset size valued at approximately $163 billion at the end of 2020, which represented about a fifth of overall banking assets.

UAE Payments Research | Report Contents

TABLE OF CONTENTS
Demographics and the economy
Payments environment
Cards market
Mobile payments
Profit pool
The networks
Key retail banks and issuers
Acquiring and processing
Online acquiring
Regulatory and other cards market information

Appendices: UAE Payments Data Tables

Appendix I: Demographic and economic indicators

Data table 1: Demographic and economic indicators: 2015-2020. Estimates and forecasts to 2024.
Data table 2: Ownership of key consumer devices: 2015-2020. Estimates and forecasts to 2024.
Data table 3: Internet usage by population: 2015-2020. Estimates and forecasts to 2024.

Appendix II: Payments environment

Data table 4: Access points: 2015-2020. Estimates to 2022.
Data table 5: Account penetration: 2015-2020. Estimates and forecasts to 2024.
Data table 6: Consumer payment: trends 2015-2020. Estimates and forecasts to 2022.
Data table 7: B2C e-commerce payment methods: 2015-2020. Estimates and forecasts to 2022.

Appendix III: Cards market

Data table 8: Total cards payment metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 9: Contactless cards metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 10: Credit card numbers: 2015-2020. Estimates and forecasts to 2024.
Data table 11: Total credit cards metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 12: Credit cards profitability indicators: 2015-2020. Estimates and forecasts to 2024.
Data table 13: Debit cards numbers: 2015-2020. Estimates and forecasts to 2024.
Data table 14: Debit cards metrics: 2015-2020. Estimates and forecasts to 2024.
Data table 15: Prepaid/e-money cards metrics: 2015-2020. Estimates and forecasts to 2024.

Appendix IV: Mobile payments

Data table 16: Mobile proximity payment metrics: 2015-20. Estimates and forecasts to 2024.

Appendix V: Profit pool

Data table 17: UAE market profit pool: 2015-20. Estimates and forecasts to 2024 including credit card numbers, billed volumes, outstandings, interest incomes, net interest revenues, merchant revenues, card fee revenues, other non-interest incomes, total revenues, net credit losses, operating expenses, total expenses, pre-tax profits, merchant service charges, rollover rates, APR, net credit losses to outstandings, operating costs to revenues, ROA (pre-tax profits to outstandings).

Appendix VI: Card networks

Data table 18: Networks' credit card market shares: 2015-20. Estimates and forecasts to 2022.
Data table 19: Networks' credit card data numbers: 2015-20. Estimates and forecasts to 2022.
Data table 20: Networks' credit card billed volume: 2015-20. Estimates and forecasts to 2022.
Data table 21: Networks' number of credit card transactions: 2015-20. Estimates and forecasts to 2022.
Data table 22: Networks' average credit card transaction value: 2015-20. Estimates and forecasts to 2022.
Data table 23: Credit card interchange fees by network: 2015-20. Estimates and forecasts to 2022.
Data table 24: Networks' debit card market shares: 2015-2020. Estimates and forecasts to 2022.
Data table 25: Networks' debit card data numbers: 2015-2020. Estimates and forecasts to 2022.
Data table 26: Networks' debit card billed volume: 2015-2020. Estimates and forecasts to 2022.
Data table 27: Networks' number of debit card transactions: 2015-2020. Estimates and forecasts to 2022.
Data table 28: Networks' average debit card transaction value: 2015-2020. Estimates and forecasts to 2022.
Data table 29: Debit card interchange fees by network: 2015-2020. Estimates and forecasts to 2022.

Appendix VII: Key retail banks and issuers

Data table 30: Key credit card issuers market shares by credit card numbers: 2017-2020. Estimates and forecasts to 2022.
Data table 31: Key issuers market shares in credit card outstandings: 2017-2020. Estimates and forecasts to 2022.
Data table 32: Key debit card issuers market shares by debit card numbers: 2017-2020. Estimates and forecasts to 2022.

Appendix VIII: Acquirers and processing

Data table 33: Merchant acquirer credit card market share: Estimates for 2021.
Data table 34: Credit card merchant service charges: 2015-2020. Estimates and forecasts to 2024.
Data table 35: Merchant acquirer debit card market share: Estimates for 2021.
Data table 36: Debit card merchant service charges: 2015-2020. Estimates and forecasts to 2024.
Data table 37: Credit card issuer/issuing processor relationships
Data table 38: Credit card acquirer/acquiring processor relationships
Data table 39: Credit card issuing processor market shares by card numbers: Estimates for 2021.
Data table 40: Credit card acquiring processor market shares by the number of POS transactions: Estimates for 2021.

Appendix IX: Online acquiring

Data table 41: Online merchant acquirer market share. Estimates for 2021.

UAE Country Report | Selected Extracts

Demographics and Economy:
The United Arab Emirates (UAE) is an Arabian Gulf country made up of seven individual territories (emirates), with Dubai and Abu Dhabi the richest and most populous. The population
increased from 10.7 million in 2019 to 11.1 million at the end of 2020.

Payments Environment:
Cash remains among the most popular payment options in the Emirates; however, its dominant position is slowly being eroded by electronic forms of payment.

Cards market:
Total payment card (credit, debit and prepaid) billed volume (purchase volume and cash withdrawals) reached $154 billion in 2020, a 4.1% yearon-year decrease. Total payment card
transactions came to 744 million, up by 0.8%.

Mobile Payments:
While mobile payments are available in the United Arab Emirates, billed volume as a proportion of total electronic payments is negligible. However, stakeholders in the payments space have been working to bring mobile payment solutions to the market.

Profit Pool:
Boosted by an increase in card numbers and billed volumes, total revenue grew by a quarter between 2015 and 2020 to reach $2.4 billion.

Card Networks:
Although there are four card networks operating in the country, the market is dominated by Visa and Mastercard, which together represent 99% market share both in terms of the number of credit cards in issue and billed volume as of 2020.

Key Retail Banks and Issuers:
There are 21 UAE banks active here, as well as 37 licensed branches of foreign banks (covering both conventional and Islamic banking). Total assets of the Emirati banking system came to approximately $704 billion at the end of 2020.

Acquiring and Processing:
Network International (NI), First Abu Dhabi Bank (FAB) and Mashreq Bank dominate the UAE acquiring market, with a combined market share of 92%. Most of the issuers in the Emirates carry out card processing in-house, while international banks undertake theirs through their regional processing centres.

Online Acquiring:
Lockdown measures in the early half of 2020 accelerated a surge in e-commerce sales volume, with a reported 49% of consumers shopping online more and the majority using cards or digital wallets.

Regulatory and Markets Information:
Consumers in the United Arab Emirates are increasingly opting for digital payments in a trend now accelerated by the pandemic. Accordingly, in 2020, the central bank created a comprehensive
regulatory policy framework to support the development of digital payment services.

UAE Payments Report | Entities Referenced

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Abu Dhabi Commercial Bank
Abu Dhabi Investment Council
Abu Dhabi Securities Exchange
Actis
ADCB
ADIB
Adyen
Air Arabia
Al Hilal Bank
Al Rajhi Bank
Alipay
Amazon
Amazon Payments Services
American Express
Apple Pay
Bank Audi
Cashew Payments
CASHU
Central Bank of UAE
Checkout.com
Citi
DIB
Diners Club
Dubai Islamic Bank
Dubai Police
eDirham
eDirham G3
Emerging Market Payments
Emirates Islamic Bank
Emirates NBD
Emirates Payment Services
EMP
Etisalat
FAB
Fabergé
FC Barcelona
First Abu Dhabi Bank
First Gulf Bank
Fitbit Pay
Foodics
Garmin Pay
GCCNET
Google Pay
Gulf Cooperation Council
HMSHost
HSBC
Infibeam Avenues
JCB
Kuwait Finance House
Liv.
London Stock Exchange
Magnati
Majid Al Futtaim Finance LLC
Manchester City
Manchester United
Mashreq
Mashreq Neo
Mashreq
Mastercard
Mir
MUFG Bank
National Bank of Abu Dhabi
National Bank of Ras Al Khaimah
Network International
Noon
Noor Bank
Payfort
PayTabs
Rakbank
Rakislamic
Ras-Al-Khaimah
RuPay
Samsung Pay
Sharjah Islamic Bank
Smart UAE
Souq
Standard Chartered
Stripe
Targeted Economic Support Scheme
Telr
Tencent
TESS
TouchPoints
UAE Ministry of Finance
UAE Switch
UNB
Union National Bank
UnionPay
Visa
Wage Protection System
WeChat Pay
WPS

MORE MIDDLE EAST PAYMENTS REPORTS

Verisk reports deliver invaluable market and competitor intelligence on payments cards, e-money, acquiring/processing, retail banking, and consumer credit. Analysts and researchers use both primary and secondary source data and conduct in-depth interviews with senior industry executives and local experts.

See more Middle East Country Reports or explore the full range of worldwide cards & payments reports available for 72 markets world-wide.