UAE Shoppers Shift to Digital Payments, With Crypto and Stablecoins Emerging

The payment landscape for shoppers in the UAE and the wider Gulf region is undergoing a significant transformation, with a notable shift away from conventional card payments towards a diverse array of digital alternatives. Industry leaders indicate that while cards remain dominant, new options like buy now, pay later (BNPL), local debit cards, telco wallets, and direct bank-to-bank payments are rapidly expanding in usage.

Paul Carey, Executive Vice-President for Cards, Payments and Fintech at Al-Futtaim, highlighted that payment methods have "shifted massively" in the last five years. He noted that between 30% and 50% of Al-Futtaim’s business spending is now conducted online, varying by brand. This evolution is partly driven by central bank initiatives, such as the UAE's introduction of Jaywan, its local debit card, and the emergence of instant payment systems.

Growth of Digital Currencies in Cross-Border Payments

Beyond traditional digital methods, cryptocurrencies and stablecoins are beginning to feature in payment discussions. New research from Nium and Celent, based on a survey of 40 banks and 40 businesses across the UAE, Saudi Arabia, Kuwait, and Qatar, projects a substantial increase in the adoption of these digital assets for cross-border business payments.

Key projections from the Nium and Celent study by 2035 include:

• Stablecoins are expected to account for an average of 10.4% of outgoing cross-border business payment volumes, a significant rise from 1.6% in 2025.
• Tokenised deposits are projected to increase from 1.2% to 6.2%.
• Central bank digital currencies (CBDCs) are forecast to grow from 0.6% to 4.1%.

Collectively, these new forms of money could represent 20.7% of payment volumes by 2035, a substantial leap from just 3.4% in 2025. This growth is anticipated to impact traditional payment systems, with Swift’s share expected to decline from 77.2% to 55% during the same period. Despite the projected growth, adoption faces challenges, with 53% of banks struggling to build a business case and half believing the technology is not yet mature enough.