The UAE is no exception to this trend, with credit cards the most popular way to pay for e-commerce transactions last year, according to the FIS Global Payments Report 2023.
Wallets were the UAE's second-leading payment method online, accounting for 24 per cent of transaction values, up from 23 per cent in 2021, the report revealed. Cash on delivery accounted for only 7 per cent of e-commerce transactions last year.
“A similar picture emerges at point of sale [POS], where credit cards were responsible for 40 per cent of transaction value, with debit cards earning 17 per cent share,” the report said.
“Cash accounted for 18 per cent share at POS. Wallets are growing even faster at POS, growing from 13 per cent share in 2021 to 16 per cent share in 2022.
“Consumers in the UAE can choose from among the world’s biggest wallet brands, such as Alipay, Apple Pay, Google Wallet, Samsung Wallet and WeChat Pay, as well as domestic wallets like Careem Pay, e& money [Etisalat Wallet] and Payit.”
Globally, the Covid-19 pandemic spurred the faster adoption of digital payments, particularly contactless payments, due to heightened awareness about the spread of the virus through banknotes and coins.
Although still in its early stages, the buy now, pay later model is growing fast in the UAE, the GPS 2023 report found.
In the UAE, BNPL doubled its share of transaction values to 2 per cent last year from 2021.
“The UAE is a centre of BNPL development, with domestic BNPL providers such as Cashew, PostPay, Spotii and Tabby competing with regional providers like Saudi Arabia’s Tamara,” according to the research.
The report projected that BNPL would continue to grow in the UAE's e-commerce sector at a compound annual rate of 37 per cent through to 2026.
BNPL is also the Middle East and Africa’s fastest-growing e-commerce payment method. It is estimated to grow at a compound annual rate of 43 per cent in MEA through 2026, the report said.
Meanwhile, the MEA also recorded a dramatic decline in the use of cash at POS transactions, falling to 43 per cent last year from 73 per cent in 2018, the report found. It projected that the share of cash transactions would fall to just 29 per cent by 2026.
“The shift from cash is mirrored by the rise of digital and mobile payments, which is driven by governments, banks and FinTechs,” the report said.
“Mobile money transaction values in 2021 grew fastest in the Middle East and North Africa [49 per cent], followed by Sub-Saharan Africa at 40 per cent, according to GSMA.”
Consumers across the MEA also prefer to use digital wallets to make payments.
Already the second-leading online payment method in MEA with a 20 per cent share of transactions, digital wallets are set to grow at a 25 per cent compound annual rate through to 2026, when they are expected to attain a 27 per cent share of e-commerce transaction values, according to the report.
A similar story is unfolding at POS transactions, with wallets projected to nearly double their share to 24 per cent by 2026, from 13 per cent last year.
Despite a lower penetration in MEA due to religious reasons, credit cards still command the highest share of regional e-commerce transaction values at 31 per cent and are projected to maintain this share through to 2026.
Account-to-account transfers are the third leading e-commerce payment method after credit cards and digital wallets, making up 18 per cent of regional e-commerce transaction values in 2022, the report said.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Goalkeepers Simon (Athletic Bilbao), De Gea (Manchester United), Sanchez (Brighton)
Defenders Gaya (Valencia), Alba (Barcelona), P Torres (Villarreal), Laporte (Manchester City), Garcia (Manchester City), D Llorente (Leeds), Azpilicueta (Chelsea)
Option 1: 70% in year 1, 50% in year 2, 30% in year 3
Option 2: 50% across three years
Option 3: 30% across five years
Silent Hill f
Publisher: Konami
Platforms: PlayStation 5, Xbox Series X/S, PC
Rating: 4.5/5
How does ToTok work?
The calling app is available to download on Google Play and Apple App Store
To successfully install ToTok, users are asked to enter their phone number and then create a nickname.
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Name: Brendalle Belaza
From: Crossing Rubber, Philippines
Arrived in the UAE: 2007
Favourite place in Abu Dhabi: NYUAD campus
Favourite photography style: Street photography
Favourite book: Harry Potter
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
George Sainsbury of the supermarket dynasty, sugar magnate William Park Lyle and actress Dame Gracie Fields were residents in the 1930s when the street was only known as ‘Millionaires’ Row’.
Then came the international super rich, including the last king of Greece, Constantine II, the Sultan of Brunei and Indian steel magnate Lakshmi Mittal who was at one point ranked the third richest person in the world.
Turkish tycoon Halis Torprak sold his mansion for £50m in 2008 after spending just two days there. The House of Saud sold 10 properties on the road in 2013 for almost £80m.
Other residents have included Iraqi businessman Nemir Kirdar, singer Ariana Grande, holiday camp impresario Sir Billy Butlin, businessman Asil Nadir, Paul McCartney’s former wife Heather Mills.
Hunting park to luxury living
Land was originally the Bishop of London's hunting park, hence the name
The road was laid out in the mid 19th Century, meandering through woodland and farmland
Its earliest houses at the turn of the 20th Century were substantial detached properties with extensive grounds
