The Cards and Payments Industry in the UAE: Emerging trends and opportunities to 2020
Cash remained the predominant payment instrument during the review-period (2012-16e), accounting for 87.3% of the country’s payment transaction volume in 2016. This was primarily because consumers in the UAE see cash as a quicker and safer payment option, over which they have more control. However, card payments are gradually increasing, supported by government financial inclusion programs, promotional campaigns by financial institutions, and the adoption of EMV and contactless technology.
Improving financial inclusion has driven the adoption of debit cards in the UAE. The government introduced the Wage Protection System (WPS) in January 2009, requiring all wage payments to be made through a bank, bureau de change, or other authorized financial institution. All institutions registered with the Ministry of Labor come under the purview of the WPS. As of October 2015 there were 4.6 million foreign workers registered with the Ministry of Labor, of which 3.5 million were enrolled in the WPS. In a similar initiative, the Emirates Identity Authority collaborated with Al Hilal Bank in September 2014 to allow Emirati residents to use national ID cards to withdraw cash from ATMs.
UAE’s immigrant population accounted for 88.4% of the resident population in 2015 according to the International Organization for Migration (IOM). Many expatriate workers use prepaid cards to remit funds to their home countries. The government’s WPS has resulted in a number of companies in the UAE using prepaid cards for payroll purposes. In May 2013, Emirates NBD subsidiary Network International launched prepaid cards to enable companies to pay wages to blue-collar workers. Similarly, in February 2016 UnionPay International collaborated with banks in the UAE to issue a prepaid salary card. These cards are compliant with the WPS, and enable banks in the UAE to offer wage payments to workers.
E-commerce registered significant growth, rising from US$2.6bn (AED9.7bn) in 2012 to US$6.3bn (AED23.1bn) in 2016, at a review-period compound annual growth rate (CAGR) of 24.2%. This growth was mainly supported by the use of smartphones and tablets, improving internet connectivity, and government initiatives aimed at encouraging a digital lifestyle in the UAE. The variety of products and services and the convenience of online shopping have driven Emirati consumers to adopt e-commerce, while the development of technology has enabled merchants to sell products online.
The report "The Cards and Payments Industry in the UAE: Emerging trends and opportunities to 2020" provides top-level market analysis, information and insights into the UAE cards and payments industry, including:
- Current and forecast values for each market in the UAE cards and payments industry, including debit, credit, and charge cards.
- Detailed insights into payment instruments including cheques, cash, and payment cards. It also, includes an overview of the country's key alternative payment instruments.
- E-commerce market analysis and payment methods.
- Analysis of various market drivers and regulations governing the UAE cards and payments industry.
- Detailed analysis of strategies adopted by banks and other institutions to market debit, credit, and charge cards.
Companies mentioned in this report: Emirates NBD, Dubai Islamic Bank, Abu Dhabi Islamic Bank, Emirates Islamic Bank, National Bank of Abu Dhabi, Commercial Bank of Dubai, National Bank of Fujairah, National Bank of Umm Al Quwain, Sharjah Islamic Bank, United Arab Bank, United National Bank, Abu Dhabi Commercial Bank, Mashreq Bank, RAKBANK, Visa, Mastercard, American Express, and Diners Club.
- To capitalize on the rising adoption of alternative payment solutions among UAE residents, Samsung collaborated with a number of banks and payment networks to launch its Samsung Pay m-payment service in April 2017. It allows users to conduct payments across all form of terminals, including magnetic stripe, EMV, and NFC. In January 2017, UnionPay collaborated with Mashreq Bank to introduce its host card emulation- and tokenization-based m-payment service QuickPass. Users can pay using their UnionPay QuickPass chip card or mobile QuickPass-enabled smartphones and wearable devices at contactless POS terminals. In August 2016, telecommunications company Etisalat launched Etisalat Wallet, a mobile wallet that allows consumers to pay for utility bills, parking tickets, and the purchase of goods and services from participating domestic and international retailers, as well as topping up Etisalat mobile phone credit.
- To promote card-based payments in the UAE, Mashreq Bank and security solutions provider Oberthur Technologies (OT) introduced an instant card issuance service in April 2017. Using OT’s solution, Mashreq Bank can promptly issue personalized payment cards to its consumers at the time of opening an account. The service is currently installed at 35 Mashreq Bank branches in both the UAE and Qatar, helping drive the issuance of more than 40 debit and credit card products. Reducing the amount of time it takes to issue payment cards has resulted in increased cards in circulation in the country.
- To transform the UAE into a digitized society, 16 equity partner banks - National Bank of Abu Dhabi (NBAD), Abu Dhabi Commercial Bank (ADCB), Abu Dhabi Islamic Bank (ADIB), Mashreq Bank, Dubai Islamic Bank (DIB), Commercial Bank of Dubai (CBD), RAKBANK, United National Bank (UNB), Al Hilal Bank, Sharjah Islamic Bank (SIB), Al Masraf, Bank of Sharjah, Invest Bank, United Arab Bank (UAB), National Bank of Fujairah (NBF), and National Bank of Umm Al Quwain (NBQ) - officially launched the Emirates Digital Wallet platform in May 2017. The app is designed to provide a convenient and efficient payment system to UAE residents. It is regulated by the central bank and developed under the supervision of the UAE Banks Federation - a body that aims to promote and improve the UAE’s banking sector. The move is anticipated to reduce dependency on cash and provide the population with access to financial services including payments and fund transfers using mobile phones.
Reasons to buy
- Make strategic business decisions, using top-level historic and forecast market data, related to the UAE cards and payments industry and each market within it.
- Understand the key market trends and growth opportunities in the UAE cards and payments industry.
- Assess the competitive dynamics in the UAE cards and payments industry.
- Gain insights into marketing strategies used for various card types in the UAE.
- Gain insights into key regulations governing the UAE cards and payments industry.
1.1. Market overview
1.2. Key facts
1.3. Top five industry events
2.1. Current payment environment
3.E-COMMERCE AND ALTERNATIVE PAYMENTS
3.1. E-commerce market analysis
3.2. Alternative payment solutions
3.2.3. Samsung Pay
3.2.4. Visa Checkout
3.2.6. Emirates NBD Pay
3.2.9. Etisalat Wallet
4.REGULATIONS IN THE CARDS AND PAYMENTS INDUSTRY
4.1. Regulatory framework
4.1.1. The UAE mandates migration to EMV
4.2. Anti-money laundering
4.3. Foreign direct investment regulations
5.ANALYSIS OF CARDS AND PAYMENTS INDUSTRY DRIVERS
7.1. Debit card market analysis
7.2. Competition in the debit card market
7.3. Debit card comparison
8.1. Pay-later card market analysis
8.2. Competition in the pay-later card market
8.3. Pay-later card comparison
10.1. Abbreviations and acronyms
10.2. Supplementary data
10.6. Further reading