UAE Payments Industry Set to Hit $27.3B by 2028

The UAE’s payments industry is set to experience significant growth, with total revenues projected to reach $27.3 billion by 2028, according to the Global Payments Report 2024 from Boston Consulting Group (BCG). Despite global growth rates slowing, the UAE remains a leader in the GCC, driven by rapid digital transformation and strategic financial sector investments. The Global Payments Report 2024, marking BCG’s 22nd annual analysis of the payments industry, highlights the importance of adapting to evolving customer expectations, increased regulatory scrutiny, and technological disruptions. Titled “Fortune Favors the Bold”, the report calls for decisive action from industry players as they navigate these changes. While global growth in the payments sector is slowing, the UAE continues to be a strong performer in the region, maintaining a high-growth trajectory.

Globally, payments revenue growth is expected to slow considerably, with the compound annual growth rate (CAGR) dropping to 5% through 2028, creating a global payments revenue pool of $2.3 trillion. This is a sharp decline from the 9% CAGR observed in the previous five years. North America and Europe are expected to face the largest slowdowns, with projected annual revenue increases of only 3%. In contrast, the Middle East, Latin America, and Asia-Pacific regions are poised for stronger growth, with the Middle East forecasted to grow at a 7% CAGR, driven by the digital payment boom in emerging markets.

The UAE’s payments sector has already shown impressive growth. From 2018 to 2023, payments revenue grew from $9.8 billion to $18.8 billion, a CAGR of 13.8%. By 2028, revenues are expected to increase by 45%, reaching $27.3 billion. Additionally, transaction volumes are predicted to rise dramatically, from 1.7 billion in 2023 to over 3.1 billion by 2028, representing a 78% increase. This growth is largely driven by the ongoing shift from cash-based to digital payments, supported by government initiatives and growing fintech adoption.

Lukasz Rey, Managing Director and Partner at BCG, notes that the UAE’s payments sector is at a pivotal point. He emphasizes that as the market moves beyond easy growth, companies must pivot from pure expansion to sustainable profitability. “Tech modernization is no longer optional,” Rey says. “Payment firms must upgrade their legacy systems to cloud-ready architectures to stay competitive and meet evolving market demands.” Generative AI is already being used by early adopters to enhance customer service, strengthen fraud detection, and improve operational efficiency.

The global payments industry is undergoing a transformation, requiring companies to adopt bolder, more strategic approaches. Digital payments are nearing maturity in markets like the U.S. and U.K., with less than 10% of transactions still in cash. Instant payments are now standard in over 60 countries, and central bank digital currencies (CBDCs) are poised to disrupt the industry. Generative AI is also cutting costs by up to 70% for early adopters, highlighting the need for modernization to stay competitive.

As emerging technologies like generative AI, real-time payments, and digital currencies reshape the global payments landscape, the UAE is positioned for long-term success through continued innovation and modernization. Mohammad Khan, Managing Director and Partner at BCG, says, “With UAE transaction volumes expected to rise by 78% by 2028, the country is witnessing one of the most dynamic markets globally.” The growth of digital payments and the rise of emerging technologies present both challenges and opportunities. Companies that strategically invest in their capabilities today while maintaining operational discipline will be best positioned to capture the significant market opportunity in the UAE’s payments sector in the coming years.

The UAE’s payments industry is on a clear path to continued growth, fueled by innovation, strategic investments, and modernization, making it one of the most exciting markets in the region.