Payment cards lead e-commerce payments in UAE

Alternative payments are the second most preferred payment method.

Around 40.8% of online purchases in the United Arab Emirates were transacted through payment cards, remaining the most preferred payment method for e-commerce purchases in the country.

In a report, GlobalData said payment cards are followed by alternative payment which accounts for a 27.7% share of the e-commerce transaction value in 2023, a 24.4% increase in 2022.

Some of the leading alternative payment brands in the country are Apple Pay, PayPal, and Google Pay.

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Amongst the traditional payment methods, bank transfers comprise 19.2% of the e-commerce transactions whilst 12.4% are purchased through cash.

“The UAE will continue to witness strong growth in e-commerce sales, registering a compound annual growth rate (CAGR) of 12.0% between 2023 and 2027 to reach AED169.5 billion ($46.2 billion) in 2027,” Ravi Sharma, Lead Banking and Payments Analyst at GlobalData. 

“Amongst payment tools, while alternative payments are gradually displacing traditional modes of payments, there is still a long way to go before they can disrupt the dominance of payment cards,” Sharma added.

UAE’s e-commerce markets posted an 18.5% growth in 2022 to reach $25.2b as consumers’ preference for online purchases grew. The e-commerce market is expected to increase by 16.4% to reach $29.3b in 2023.