The UAE has been solidifying its position as a global leader in the fintech sector over the last few years. Through innovation, progressive legislation and close collaboration among banks, regulators, and fintech businesses, it has created a payments ecosystem that is secure, adaptable, and consumer-focused. But, before diving into the payment trends shaping 2025, it’s worth exploring the key forces behind this supportive fintech landscape that allowed these trends to grow.
Key drivers of UAE’s fintech growth
1. Advanced technologies: The UAE is actively embracing fintech trends, leveraging technologies like artificial intelligence (AI), blockchain and real-time payment systems to enhance its financial landscape. These advancements are streamlining operations and changing how businesses and customers interact. For example, AI helps businesses identify returning customers across multiple channels and enables personalised experiences, while blockchain simplifies the creation of secure and efficient loyalty programs.
2. Progressive regulatory frameworks: The Central Bank of the UAE is leading the charge with initiatives like the Open Finance framework, encouraging the development of personalised and efficient financial products. Add to that the country’s first sandbox environment, which fosters safe fintech experimentation and simplified licensing, paving the way for startups and established players to thrive.
3. Collaboration across sectors: Fintech companies, banks and regulators are working hand-in-hand to fast-track the deployment of groundbreaking payment technologies. This synergy ensures financial services are accessible but also secure and progressive.
With these key drivers in mind, let’s take a closer look at the trends shaping the future of payments in the UAE.
Payment trends to watch in 2025
1. Digital wallets take centre stage: Digital wallets continue to emerge as a vital component of payments in the UAE. It’s forecasted that the mobile wallet market will reach around $7.18 billion by 2028. Around 46% of the UAE population currently relies on e-wallets, with a wide range of options.
With the country’s ambition to go fully cashless by 2030, wallets like Careem Pay, which make bill payments and money transfers easier, along with other global options like Google Pay and Samsung Pay, are prompting more citizens to adopt digital wallets and its advanced features.
This shift isn’t just about convenience; it’s a cultural pivot. As one of the world’s top remittance-sending nations, with over $43 billion in annual outflows, adopting advanced digital wallets has become indispensable for expats supporting families abroad. These tools cut transfer costs, provide real-time exchange rates and enable automated transfers.
2. AI-powered payment security: AI is becoming a game-changer in the UAE’s payments sector, aligning with the National Strategy for Artificial Intelligence 2031. It’s not just innovation for innovation’s sake – AI is actively fighting financial crimes, safeguarding digital platforms and making payments smarter and more secure. With real-time threat detection and automated actions, AI systems adapt quickly to emerging threats, ensuring constant vigilance.
The technology is gradually casting aside traditional payment security methods that rely on fixed rules as it learns and evolves, using predictive analytics to anticipate risks before they become issues.
3. Biometric authentication for seamless access: While OTPs (one-time passwords) are unlikely to disappear by 2025, passkeys are quickly gaining traction as a preferred alternative in the UAE. These secure methods, which use fingerprint scans, face recognition, or screen locks, are becoming more popular for their ease of use and ability to simplify authentication while boosting security. According to a Mastercard survey, 90% of global users believe biometrics are more secure and convenient than traditional passwords.
4. Contactless payments leading the way: Contactless payments have seen remarkable growth in the UAE. In a recent study, it was revealed that 49% of UAE SMEs have adopted contactless payment methods to meet customer expectations, reflecting a broader shift toward digital transactions. Consumer engagement is also strong, with 78% of UAE residents regularly using contactless payments.
The UAE’s payments industry – projected to reach $27.3 billion by 2028 – is being propelled by this rapid adoption of contactless solutions, including mobile wallet integrations. In 2024, the rollout of Tap to Pay on iPhone in the UAE marked another milestone, enabling businesses to accept contactless payments directly through their devices, further streamlining the payment experience for consumers and merchants alike.
5. The rise of real-time payments: Real-time payments are transforming the UAE’s financial landscape by enabling instantaneous fund transfers, and eliminating traditional transaction delays. The Instant Payment Instruction (IPI) system has been crucial in this shift, with transaction volumes surging from Dh2.4 million in 2019 to Dh64.1 million in 2023 – a 27-fold increase. Similarly, transaction values increased from Dh6 billion to Dh164.7 billion during the same period. Despite this significant growth, real-time payments currently represent only 1.5% of the total payment transaction volume in the UAE. However, this share is projected to more than double, reaching 3.6% by 2028.
The UAE’s payments ecosystem is evolving and driven by groundbreaking technologies, progressive regulations, and a shared vision for a cashless future. From the rise of digital wallets to AI-powered payment security, biometric authentication, and real-time payments, the country is embracing trends reshaping how businesses and consumers interact with money.
