5 dominating payment trends in the UAE in 2025

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, changing how businesses and customers interact. For example, AI helps businesses identify returning customers across multiple channels and enables personalized experiences, while blockchain simplifies the creation of secure and efficient loyalty programs.

2. Progressive regulatory frameworks: The Central Bank of the UAE (CBUAE) is leading the charge with initiatives like the Open Finance framework, encouraging the development of personalized and efficient financial products. Add to that the country’s first sandbox environment, which fosters safe fintech experimentation and simplified licensing that paves 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 not only accessible but also secure and progressive.

“There are certain elements that create fertile ground for emerging innovations in any market. Without these key drivers, the fintech sector risks stagnation and missed opportunities.”

Daumantas Grigaravicius

Head of Middle East

Looking at other markets, we can see how these drivers have sparked impactful adoption of payment innovations:

• China: Regulatory policies supporting Alipay’s integration of AI and blockchain helped establish a cashless society, fundamentally transforming how people interact with money.

• India: The adoption of advanced technologies like real-time payments through UPI has revolutionized its economy, promoting financial inclusion and enabling seamless digital transactions.

Digital wallets continue to emerge as a vital component of payments in the UAE. It's been forecasted that the mobile wallet market size will reach around $7.18 billion by 2028. Around 46% of UAE population are currently relying on e-wallets, with a great range of options to choose from. 

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, the adoption of 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.

AI is becoming a game-changer in the UAE’s payments sector, aligning with the country’s 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.

AI 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.

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.

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 strong, with 78% of UAE residents regularly using contactless payments. The UAE's payment 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.

Real-time payments are transforming the UAE's financial landscape by enabling instantaneous fund transfers, eliminating traditional transaction delays. The Instant Payment Instruction (IPI) system has been crucial in this shift, with transaction volumes surging from AED 2.4 million in 2019 to AED 64.1 million in 2023—a 27-fold increase. Similarly, transaction values increased from AED 6 billion to AED 164.7 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, 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 that are reshaping how businesses and consumers interact with money.