The UAE’s acquiring payment market has witnessed significant growth, driven by rapid digital transformation, increasing e-commerce penetration, government initiatives supporting a cashless economy and rising demand for diversified digital payment options.
A recent analysis by Bain & Company revealed that in 2024, the UAE merchant acquiring market reached a total payment volume of approximately $150 billion, representing a compound annual growth rate of 13-14 percent since 2020.
The market’s revenues totalled $470 million, reflecting a slightly higher growth rate of 15 percent, primarily due to increased SME and VAS penetration, while still facing price pressures within a highly competitive environment.
“The UAE payment ecosystem is rapidly transitioning toward digital solutions, driven by supportive government initiatives, increasing e-commerce activity, and evolving consumer behaviors. For acquiring businesses to sustain and enhance growth, it will be crucial to invest strategically in innovation and develop value-added services that differentiate them in this dynamic marketplace,” stated Dimitri de Kéchilava, associate partner at Bain & Company Middle East.
Key trends driving the UAE’s payment growth
Several factors have contributed to the growth of the UAE’s acquiring payment market, including the shift toward cashless transactions. The growing adoption of credit cards, digital wallets and Buy Now, Pay Later (BNPL) solutions has facilitated the shift toward a cashless economy.
The UAE has also adopted government initiatives and regulatory frameworks to promote reduced reliance on cash transactions.
Other factors contributing to the growth of the UAE’s acquiring payment market include its booming e-commerce sector, with online transactions projected to grow around 15 percent annually through 2028, and increased SME penetration. Payment revenue growth from small and medium enterprises is expected at approximately 16 percent annually compared to around 10 percent for the enterprise segment.
Finally, the increasing demand for value-added services (VAS), like data analytics, dashboards and dynamic currency conversion, is creating additional revenue streams for payment acquirers.
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Digital transformation to continue supporting growth
The UAE’s payment landscape remains dynamic and competitive, with existing payment providers expanding their capabilities and new market entrants continuously emerging. Both established players and newcomers are actively pursuing licensing and strategic partnerships to increase their presence.
However, several challenges persist, including price pressures reducing revenue margins, slower-than-expected SME adoption, and low penetration rates of integrated software vendors (ISVs) currently standing at around 2 percent.
“SME, VAS and ISV adoption rates present opportunities for future growth. Recent developments and strategic partnerships within the payment sector indicate substantial potential. Market players that proactively integrate innovative solutions and technologies will be best positioned for future success,” added de Kéchilava.
Bain & Company expects the UAE’s acquiring payment market to maintain its upward trajectory over the next five years, driven by digital transformation, ongoing government support and rising consumer preference for digital payments. Providers will increasingly focus on innovation, value-added services and customer-centric solutions to succeed in this evolving competitive environment.
