UAE BNPL market expanded with substantial growth in between 2017 and 2022 with massive expansion in the adoption of BNPL as the mode of payment due to rising industry valuation, trend of contactless payments and the emergence of BNPL lending startups going beyond the typical BNPL card issuance model. The primary factors driving the market growth is the emergence of instant payment anytime and anywhere, rising internet penetration in the country, growing awareness among the users, controlled, secured and efficient transactions with convenience of use and a highly rewarding experience provided by the market players to their users. Several startups and global BNPL players are offering their innovative products and deferred payment services for consumers in the UAE. Moreover, the adoption from merchants is also on the rise as more and more consumers are demanding the BNPL payment method for both in-store as well as online purchases.
These payments are assisted by advanced technology and are, therefore, quick, simple and convenient. On the other hand, consumers too are increasingly being drawn to digital payments due surging adoption of contactless payments post COVID-19 which is also contributing in the growth of BNPL market by increasing their userbase. In the UAE, the global pandemic has resulted in a shift in consumer spending habits and accelerated adoption of online shopping platforms. This shift in the overall consumer behavior, along with the rise of digital payment solutions, is resulting in buy now, pay later (BNPL) becoming one of the fastest-growing payments methods in the country.As more and more people across India, including people in rural areas, use smartphones, they get increasingly exposed to digital payment modes. Gen-Zs and millennials are already comfortable with using them as they grew up with technology.
Merchants are linking themselves to new-age online payment gateways to allow more and more consumers to access and shop for their products easily. Thus, as digital payment modes are forming the bridge between multiple consumers and merchants, they’re undergoing exponential growth. As the digital payments landscape continues to evolve in the UAE, BNPL firms along with global payment giants are launching innovative, first-of-its-kind shop anywhere BNPL schemes.In November 2021, Postpay, a BNPL platforms in UAE, entered into a strategic collaboration with the Commercial Bank of Dubai and Mastercard. The firm has partnered strategically to launch the region’s first-of-its-kind shop anywhere BNPL scheme, with the aim to drive digital payments growth in the UAE. The shop anywhere BNPL scheme allows consumers to purchase online or in-store at thousands of physical stores, such as Decathlon, GAP, Level Shoes, Ace, Apple, Azadea, H&M, Home Center, Mumzworld, Sephora, Sharaf DG, Shein, and Zara.
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UAE Buy Now Pay Later Market Segmentation
By Mode of Payments (Online and Offline): BNPL market in UAE can be segmented on the basis of mode of payment: Online and Offline where number of BNPL transactions done online accounted for the highest market share as compared to the offline ( instore payments) on the basis of revenue generated in the year 2022.
By Type of End User (Ecommerce Retail, Consumer Electronics, Food Aggregators and Travel Aggregators): Buy Now Pay Later market can be segmented on the basis of type of end user: Ecommerce Retail, Consumer Electronics, Food Aggregators and Travel Aggregators. A major chunk of the revenue share is captured alone by Ecommerce Retail in UAE in 2022 due to incorporation of e-commerce in major segment of daily life activities during the phase of Covid-19.
By Geography (Dubai, Sharjah and Abu Dhabi): Buy Now Pay Later market can be segmented on the basis of geography which generated maximum revenue by BNPL transactions: Dubai, Sharjah and Abu Dhabi. A major chunk of the revenue share is captured alone by Dubai in UAE in 2022 due to presence of most of the BNPL players in this region with their registered office present in Dubai.
By Age Group of Consumers, (15-30 years, 30-40 years, 40-50 years, above 50 years): Buy Now Pay Later market can be segmented on the basis of age group: 15-30 years, 30-40 years, 40-50 years and Above 50 years. 30-40 years of age group accounts for highest market share for using BNPL services in the country in 2022. This is attributed to the increasing working age population which is gradually shifting from credit cards to BNPL as mode of payments.
Traditionally, UAE BNPL Industry is dominated by few major players in the country such as Tabby, Tamara, Spotii, Cashew, Postpay among others. As the competition continues to intensify in the UAE BNPL market, firms are developing new products and features such as virtual prepaid cards. In September 2021, UAE-based Spotti, which was acquired by global BNPL platform Zip in May 2021, announced that the firm had entered into a strategic alliance with the Abu Dhabi Islamic Bank. Under the collaboration with the Abu Dhabi Islamic Bank, Spotti launched the first virtual BNPL prepaid card in the UAE. The card will allow consumers to make both online as well as in-store purchases with merchants in the country. Spotti users can use their mobile app to load money on their virtual BNPL prepaid card to fund cost-free installment payments.
Apart from covering comparison cross Comparison of BNPL players on major decision making parameters for brand preference of analysis between major models operating in UAE, the report also provides comprehensive insights on the company profiles of leading players of Buy Now Pay Later in the ecosystem. The profiles of these players cover various parameters such as (Operational and Financial Parameters, Company Overview, Business Strategy, Recent Developments, Key Partnerships, Key Collaboration, Product Portfolio, and Challenges)
UAE BNPL market is expected to expand with a single digit CAGR in between 2022 and 2027 on the basis of revenue generated. It is anticipated that BNPL industry will grow at a substantial rate owing to factors such as due to wider acceptability at shops and better product offerings in a competitive landscape in the coming years. UAE has been culturally conservative towards BNPL and it is always seen as a debt trap instrument. But new-age start-ups are very focused on changing this mentality by creating awareness about how BNPL can be used for daily expenditure. Many new FinTechs will be entering the UAE BNPL space by offering BNPL cards to individuals and corporates. All the BNPL Players in this space are trying to attract customers through their digital offerings and will witness significant growth in new BNPL customers in the coming years. BNPL Players are also focusing on bringing out co-branded cards with features and rewards dedicated to a segment. Some global players are providing best-in-class BNPL solutions with the latest mobile application features such as digital onboarding, enhanced UX/UI, single click payment, QR, token-based payments, dispute resolution, in-app support and spend analysis. Traditional players need to take a cue from these players to enhance their offerings in the coming future. Players in this sector need to focus more on building the omnichannel ecosystem to cater to both the offline and online market.
Key Topics Covered in the Report
- Overview of Global BNPL Industry
- Installment Payment Service by BNPL Credit Card
- Presence of BNPL Players Across Globally
- Disruptors of Credit card Globally
- Key Features and Development in UAE Buy Now Pay Later Market
- How a Buy Now Pay Later Transaction Happens
- Key Trends of UAE Buy Now Pay Later Industry
- Ecosystem of Major Entities in Buy Now Pay Later Industry in UAE
- Growth Drivers of UAE Buy Now Pay Later Market
- Porter’s Five Force Analysis of the UAE Buy Now Pay Later Market
- Trends and Developments in UAE Buy Now Pay Later Market
- Issues and Challenges in the UAE Buy Now Pay Later Market
- SWOT Analysis of UAE Buy Now Pay Later Market
- Role of Government and Regulations in the UAE Buy Now Pay Later Industry
- Impact of COVID-19
- Adoption Rationale of Consumers towards Buy Now Pay Later Services
- Cross Comparison of BNPL players on major decision making parameters for brand preference
- Consumer Persona Analysis
- Investment Analysis of Major Players in the BNPL Space from 2016 to 2021
- UAE BNPL Market Sizing on the basis of number of Number of transaction, revenue and average order value.
- UAE BNPL Market Segmentation (By Mode of Payment, By Type of End User, By geography and by age group).
- Company profile of major BNPL players operating in the ecosystem (Operational and Financial Parameters, Company Overview, Business Strategy, Marketing Strategy, Recent Developments, Key Partnerships, Key Fitness Partners, Product Portfolio, Key collaboration, Cost Structure and Challenges).
- Analyst Recommendations
- Industry Speaks
India Buy Now Pay Later Market Outlook to 2026: Cascading Growth driven by one-click payment ease, unmatched expediency among lending solutions and free of cost deferment of payments, coupled with rising adoption by Merchant Payments due to increase in Customer Conversion and Sales Value
Asia BNPL Cards Market Outlook to 2025 – By Commercial and Personal BNPL Cards; By Transactions at ATM and POS Terminals; by Total Cards in Circulation; Transaction Value and Volume through Issuers and Operators; and by Countries (Japan, South Korea, India, China, Indonesia, Philippines, Singapore and Others
Ankur Gupta, Head Marketing & Communications