How Digital Payments Are Driving eCommerce Growth in the UAE

A few decades ago, digital transformation started a new movement worldwide, giving rise to modern payment methods. Since the increased use of mobile phones, The Middle East’s financial sector has transformed, and online platforms and mobile wallets has become one of the leading payment methods in Dubai.

With online payments, businesses can achieve financial stability and consumer happiness, while regular people can easily make any payment in no time. Real-time payments currently account for about 1.5% of all transactions in the UAE, and are expected to rise to around 3.6% by 2028.

Learn more about the fastest-growing real-time payment platforms, their importance, and how to choose the right one to go fully cashless without any regrets in this guide.

Overview of the UAE’s Digital Payments

What do payment apps in the UAE look like right now? Here is an overview of the current state of digital payment systems in the country.

• Government-led initiatives. In the past few years, the government has supported many digital-first projects, providing incentives for citizens and business owners to create and use mobile payment systems.
  
• Mobile penetration. The widespread use of smartphones has sparked the creation of numerous platforms for faster, safer payments that only require good internet and a mobile phone. It’s not even necessary to have a bank account anymore, as some licensed apps allow users to send and receive money directly within the app, even without linking a traditional bank account.
• Fintech innovation. With the rapid development of new apps and the continuous support from people, many companies are motivated to create a seamless, user-friendly payment experience through QR code payments, digital wallets, and other means.
  
• Safety. During the COVID-19 pandemic, society has realized how important it is to have a digital infrastructure. Since then, more and more businesses have moved to online payments, and regular citizens have stopped using cash, not just because it’s not very convenient, but also because it’s less efficient and unsafe. Cash is not just more likely to get stolen, but it can also carry germs.

For most people, making a payment now takes only a few seconds. People are more considerate of how they pay and what guarantees the platform offers to ensure not just quick but also safe transactions. Moreover, users are also trying to understand how to choose the best online payment gateway in the UAE — one that ensures faster, easier, and safer transactions.

Leading Providers and Technologies

The UAE is becoming one of the leading tech countries. As money moves across the country, businesses work to create convenient and secure payment methods, and the government launches awareness campaigns to motivate people to go digital. The tech-savvy population increasingly complements traditional banking with digital payment providers. Let’s take a look at some of the most popular platforms in the United Arab Emirates.

PayBy

This app allows you to make continuous instant payments right from your phone. PayBy is a UAE-based fintech licensed by the Central Bank of the UAE. It offers mobile wallet services, QR code payments, and supports biometric authentication (where available). It offers all the usual features, like online banking, and also some extras, like special coupons and discounts you can use if you have the app downloaded.

Mashreq Pay

This app allows you to make easy and cashless payments in the country. It serves as a digital wallet, and you can easily make contactless payments with it through NFC-based terminals. Moreover, it also offers protection through tokenization. Mashreq Pay serves as a digital wallet offering NFC-based contactless payments, tokenization for security, and loyalty features such as cashback and rewards.

Payit

Payit, a digital wallet by First Abu Dhabi Bank (FAB), enables payments for bills, peer-to-peer transfers, and business transactions. Payit also supports instant peer-to-peer transfers, split bills, card top-ups, cash-outs, and other services. A unique perk of using this service is that this platform can give you special deals like discounts on popular stores and services, often in the range of 5-10%.

Apple Pay

This is a digital and contactless payment service that lets you make payments with an Apple device, such as a smartphone or smartwatch. It’s one of the most widely used digital platforms globally, but one downside is that you must have a card from a bank before using it.

Google Pay

This is another instant payment platform for users with phones running the Android system. Its features are almost identical to Apple Pay’s, with the only major difference being that it runs within the Android ecosystem.

Choosing the Right Digital Payment Solution

When choosing a solution for payment service providers in the UAE, it’s essential to consider different criteria for selecting the right platform. Here is what you need to keep in mind:

• Security and compliance. Your safety should be your primary concern when picking the right solution. Consider the following factors: whether the chosen system has digital infrastructure built to protect your data, whether it complies with the Payment Card Industry Data Security Standard, and whether it meets all requirements from the Central Bank of the UAE.
  
• Integration with digital commerce and banking systems. Is the chosen payment solution integrated with other apps and systems? Can you add your already existing cards to it? Is there a real-time payments market, and can you use this method to make a mobile payment or purchase anything online? Think about how convenient it will be for you to interact with e-commerce platforms and different apps.
  
• User experience and mobile compatibility. With the rise of electronic payments across the UAE, it’s crucial to select a solution that runs smoothly and is easy to navigate. Mobile banking services offer all kinds of functionalities, but there is no point in them if their app lags and is hard to use.
  
• Costs and scalability. Are there any hidden costs or transaction fees? Can the platform handle the increased variety well? Even the most modern hub for instant payments can fail its users if it has too many fees or can’t work properly when there are more users active on the platform.

The UAE’s rise of secure payment options has led to citizens choosing all kinds of platforms for enabling real-time transactions. However, many apps are still not as good as advertised, which is why it’s important to decide carefully.

Future Trends in the UAE 

How will payments in the Middle East change in the future? Let’s discuss the payments revolution ahead of us and what trends there will be in the future.

• Fintech growth and innovation. In the Gulf Cooperation Council, or GCC, fintechs continue to innovate and introduce new solutions, including apps like Apple Pay, Samsung Pay, Aani (or Al Etihad Payments), QR code payments, embedded finance, and many others. Many of these creations are becoming a global sensation, with people around the world using these startups and projects to make mobile payments and organize their finances.
  
• AI-driven fraud detection tools are expected to make identifying and preventing fraud more efficient, as machine-learning algorithms continuously evolve to detect new threats. Artificial intelligence can automatically identify any activities that could lead to fraud and stop them immediately. And with AI’s ability to adapt and learn fast, even new methods of stealing data will be detected by AI.
  
• Government support for digital inclusion. The country’s government is committed to creating financial inclusion for every citizen and making the population connected, which can be reflected in the UAE 2031 vision and other initiatives. A cashless economy is the goal for the UAE, which is why right now is the best time to create solutions for payments to mobile, instant transfers, and other platforms that make it easier to receive and transfer money.

Many see digital transformation as a key to addressing the problems of low security and slow working time in the global financial system. In the next few years, paying and receiving payments will become even easier and safer.

Conclusion

It’s no secret that the United Arab Emirates has one of the most advanced technologies right now. And it’s not just about investments; many people agree on one thing: the importance of secure, flexible, and innovative payment solutions. The economy is the backbone of any government, and once all processes within the country are settled and organized properly, its citizens can enjoy much safer and faster government services.

Both businesses and consumers can stay ahead by actively supporting initiatives that contribute to the creation of safer payment systems. It’s important not just to passively download an app and continue with our lives, but also to ensure that it offers all the necessary features for a smooth experience. Ultimately, choosing the right payment gateway is the foundation of a seamless and secure digital payment experience in the UAE.