UAE payments industry set to hit $27.3bn by 2028: report

The UAE’s payments market has experienced a remarkable 13.8 per cent CAGR from 2018 to 2023, growing from $9.8bn to $18.8bn in just five years.

By 2028, the sector is poised for a further 45 per cent revenue increase. Transaction volumes are expected to rise by a striking 78 per cent, reaching over 3.1 billion transactions by 2028, up from 1.7 billion in 2023.

This expansion is largely driven by the country’s adoption of digital payment methods, supported by the government’s push towards cashless transactions and the rising influence of fintech startups.

Lukasz Rey, MD and partner at BCG and head of the Middle East Financial Institutions Practice, highlighted the critical inflection point the UAE’s payments industry has reached. “As we move beyond the era of easy growth, the sector must pivot from pure expansion to sustainable profitability,” he explained.

Rey emphasised the need for payment firms to modernise their technology stacks, noting that early adopters of generative AI have already enhanced customer service, improved fraud detection, and driven operational efficiency.

Payments landscape: UAE shines among peers in the region

Despite the global slowdown in payments revenue growth, with global revenues forecast to grow at a 5 per cent CAGR, the UAE is a standout performer in the Middle East.

The region is projected to grow at a 7 per cent CAGR, fuelled by the rapid digitalisation of payment methods and increasing adoption of emerging technologies such as real-time payments and central bank digital currencies (CBDCs).

Mohammad Khan, MD and partner at BCG, acknowledged the challenges and opportunities arising from this growth. “With transaction volumes in the UAE expected to rise by 78 per cent, reaching 3.1 billion by 2028, the country is witnessing one of the most dynamic payments markets globally. Success will depend on how well companies combine innovation with strong execution,” he stated.

Companies that strategically invest in their capabilities today will be well-positioned to capture the significant market opportunities presented by the ongoing digital transformation.

As the global payments industry faces new pressures, including regulatory scrutiny and the rapid evolution of technologies like generative AI and CBDCs, the UAE is set to continue leading the charge in the Middle East.

To remain competitive, payment firms in the country will need to embrace bold, forward-thinking strategies that focus on tech modernisation, risk management, and customer experience.

The UAE’s payments market is not only growing but also evolving at a pace that positions it for sustained success, driven by innovation, modernisation, and a clear focus on the digital future.