The United Arab Emirates’ (UAE) card payments market is set to grow by 9.4% in 2022. Although the COVID-19 pandemic impacted consumer spending in general, it has propelled the shift in consumer preference towards cashless payment methods, observes GlobalData, a leading data and analytics company.

Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “The shift towards card payments can be attributed to efforts undertaken by the government and financial institutions, which have promoted electronic payments through various financial inclusion initiatives, as well as developing and expanding the payment acceptance infrastructure in the country. As a result, the card payments market in the UAE has registered robust growth in the past few years, despite being a cash-dominated country.”

According to GlobalData’s Payment Cards Analytics, the UAE’s total card payments value is forecast to register a compound annual growth rate (CAGR) of 7.3% between 2021 and 2025 reaching AED345.2 billion (US$94.0 billion) in 2025.

Sharma adds: “In February 2022, Visa partnered with the Transport Authority and the Government of Ajman to introduce contactless technology on the city of Ajman’s buses for ‘touch-free’ payments for bus fares using contactless Visa cards and mobile wallets. Earlier, in April 2020, the Central Bank of the UAE raised the contactless payment limit from AED300 (US$81.69) to AED500 (US$136.15) in a bid to encourage consumers to use contactless payments amid the pandemic.”

In November 2020, the Government of Dubai developed the Dubai Cashless Framework, with an objective to shift all payment transactions in Dubai to cashless options. As part of this initiative, the Cashless Dubai Working Group was set up to launch initiatives that help reduce the use of cash.

Despite having a much lower card penetration than debit cards, credit and charge cards are the most preferred card type for payments and are driving the market growth, accounting for 87.2% of the overall card payment value in 2022. This can be attributed to value added benefits such as reward points, discounts, and cashbacks. GlobalData’s Payment Cards Analytics reveals that credit and charge card payments are set to grow by 9.6% in 2022, while debit card payments will grow by 8.5% during the same period.