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UAE payments revenue to reach $19.8 billion by 2027: Boston Consulting Group

The UAE payments industry has demonstrated resilience amid the current global challenges and is expected to see strong growth, with total revenue expected to rise 55 percent to a record $19.8 billion in the coming years. five years, according to a global consulting firm. Boston Consulting Group (BCG).

BCG said growth in the country’s payments space is being driven by a rise in digital transactions and technological advancements driven by the emergence of generative AI (GenAI).

The consultant stated in his Global Payments Report 2023 report that the total revenue of the UAE payments industry grew at a compound annual growth rate (CAGR) of 9.7 percent between 2018 and 2022 to $12.8 billion.

The report highlights the Emirates’ distinctive position as a global innovation hub, where payment providers are set to “redefine their functions and services” amid the dynamic evolution of the global payments ecosystem.

BCG projected that overall revenue growth in the UAE payments sector will increase over the next five years at a CAGR of 3.6 per cent, bringing total revenue to $19.8 billion.

The growth forecasts exceed the global payments industry’s projected CAGR of 6.2 per cent, highlighting the UAE’s position in this rapidly evolving landscape.

“While our research shows slower growth globally, the UAE’s payments revenue pool is expected to grow in the coming years. “The UAE is experiencing a watershed moment for those working in merchant services, issuers, transaction banks and payments infrastructure.”

saying Mohammad Khan, CEO and Partner of BCG.

Khan attributed the growth of the country’s payments industry to the adoption of innovative technologies that are being used across organizational processes.

“This evolution will improve customer pathways and offer specialized solutions, resulting in higher service quality and profit growth.”

he said.

The UAE’s Evolving Payments Space

The significant transformation in the UAE payments industry can be attributed to operational resilience, GenAI, risk management and compliance, and mergers and acquisitions.

Changing customer behaviors and reinvented customer experiences, marked by a growing desire for frictionless, more seamless and intuitive value-added banking experiences, are driving incumbents to develop open and collaborative financial ecosystems.

BCG said the growth of the UAE payments industry can be attributed to a combination of factors, including the transition from cash to cashless transactions.

In early June, Brookfield Asset Management agreed to acquire Dubai-based Network International Holdings in a deal valued at around $2.8 billion, as part of the Canadian investment firm’s broader strategy to bolster its presence in the growing payments sector. from the country.

The deal follows Brookfield’s acquisition of a 60 per cent stake in Magnati, the payments business of First Abu Dhabi Bank, in February 2022 in a deal valued at $1.15 billion. Brookfield said he sees strategic and industrial logic in pursuing a potential merger of Network and Magnati.

News source: Gulf Business

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