Payments industry revenue in the UAE is expected to grow to $18.7 billion by 2031, driven by the young and tech-savvy population in the Arab world’s second-largest economy, according to a new report by the Boston Consulting Group.
Revenues are expected to grow at a compound annual rate of 7.7 per cent between 2021 and 2031, BCG said in its Global Payments 2022: The New Growth Game report on Tuesday.
Revenues from credit cards, debit cards and current accounts, in particular, will drive the industry’s growth over the 10-year period.
“The UAE continues to see robust growth in payments and FinTech activity,” Mohammad Khan, managing director and partner at BCG, said.
“A combination of drivers — such as the country’s young, tech-savvy and fast-growing population, the nation's bid to become a crypto and FinTech hub, and the planned launch of a domestic payments scheme are resulting in greater competition and paving the way for future growth.”
Digitisation of the payments industry and the development of a FinTech ecosystem are among the priorities for the UAE, which is charting the road map for the future economy and the next 50 years of its development.
This year alone, several digital banks, as well as specialised payments players, have launched in the UAE as the government incentivises the development of the payments industry.
The FinTech industry has also received increasing attention from venture capital firms. Funding for start-ups in the Middle East and North Africa rose 20 per cent annually to more than $2.3bn in the first three quarters of 2022, according to a Magnitt study.
A combination of drivers — such as the country’s young, tech-savvy and fast-growing population, the nation's bid to become a crypto and FinTech hub, and the planned launch of a domestic payments scheme are resulting in greater competition and paving the way for future growth
Mohammad Khan,
managing director and partner at BCG
FinTech remained the leading industry during the period, with 94 deals valued at $747m, which is an annual increase of almost three quarters, it added.
Mena FinTech companies that headlined fundraising were the UAE’s Tabby with $150m, Saudi Arabia's Tamara with $100m and Senegal’s Wave Mobile Money with $91.6m.
“Cross-industry participation in digital payments will [also] provide an added impetus to the region's already burgeoning sector,” Mr Khan said.
BCG said four trends are shaping the outlook of the global payments industry and will also drive growth in the UAE over the next five years.
As the era of non-profitable growth comes to an end, payments players will have to demonstrate “solid profitability to attract customers and investors”.
“The sustained cash-to-non-cash conversion, the ongoing growth of e-commerce, and the increasing integration of payments into retail and corporate customer journeys will drive payments revenues globally,” the consultancy said.
Central bank digital currencies will continue to gain momentum as regulators keep on tailoring CBDCs to complement cash with digital central bank money, it said.
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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Marathon results
Men:
1. Titus Ekiru(KEN) 2:06:13
2. Alphonce Simbu(TAN) 2:07:50
3. Reuben Kipyego(KEN) 2:08:25
4. Abel Kirui(KEN) 2:08:46
5. Felix Kemutai(KEN) 2:10:48
Women:
1. Judith Korir(KEN) 2:22:30
2. Eunice Chumba(BHR) 2:26:01
3. Immaculate Chemutai(UGA) 2:28:30
4. Abebech Bekele(ETH) 2:29:43
5. Aleksandra Morozova(RUS) 2:33:01
