The UAE is racing to the future of payments fueled by technological advancements, evolving consumer behaviors and expectations, and the government’s vision for a cashless, digitally connected economy. For merchants, understanding, adopting and adapting to key payment trends is critical to thriving in this dynamic environment. Here are four trends to watch in 2025.
- Remit Now, Pay Later (RNPL): Financial Fluidity in a Remittance Economy
Home to over 8 million expatriates, the UAE is one of the largest remittance markets in the world, with over AED 171 billion ($46.5 billion) sent abroad in 2022, according to the Central Bank of the UAE. Remittances from the UAE to India alone totaled $22.5 billion in 2023 and were projected to increase by up to15% in 2024. Workers often prioritize supporting families overseas at the cost of their own finances. RNPL allows users to remit funds instantly and pay back in installments, emerging as an innovative solution to this challenge.
What’s driving the trend? The success of Buy Now, Pay Later (BNPL) has paved the way for similar installment-based services tailored to cross-border remittances. For consumers, RNPL offers a way to manage liquidity without financial lifelines to loved ones at home, while unlocking a previously underserved market segment for businesses.
- Same-Day Settlement (T+0): A Financial Lifeline for SMEs
SMEs are the backbone of emerging economies. In the UAE they contribute over 53% to GDP. Yet small business owners often struggle with cash flow due to delayed settlement cycles, typically T+1 or T+2. Same-day settlement (T+0) offers them a lifeline, allowing merchants to access their revenue within hours of a transaction.
This trend is driven by technological advancements and the need for faster liquidity. For SMEs, immediate access to funds reduces reliance on costly external financing and enhances operational agility. According to Paymob’s data T+0 settlement enables SMEs to improve their cash flow management by 22%, giving them more agility to reinvest in growing their business.
On a macro level, this innovation aligns with the UAE’s prioritization of creating a business-friendly ecosystem for SMEs, empowering them to contribute to the country’s economic diversification and national development goals.
- Short-Term Microlending: Bridging the Credit Gap
With a $2.6 billion SME credit gap identified by the International Finance Corporation (IFC), traditional banks often fall short in meeting the needs of small businesses seeking quick, short-term financing.
Fintech platforms are stepping in with microlending solutions that offer fast approvals and flexible repayment terms giving SMEs immediate access to funds for inventory, marketing, or expansion. For consumers, microlending provides an alternative to high-interest loans, helping them manage short-term financial pressures.
This trend underscores a broader democratization of credit, empowering SMEs and consumers alike to take control of their financial futures. By addressing these gaps, businesses offering microlending solutions are emerging as innovative economic drivers.
- Peer-to-Peer (P2P) Payments on the Ris:e Redefining Financial Transactions
P2P payments have grown from niche offerings to an essential part of the UAE’s payment ecosystem. With mobile wallet penetration in the UAE projected to grow at a CAGR of 23.2% by 2028 (Statista), P2P payments are gaining popularity for their convenience, speed, and cost-effectiveness.
The trend is driven by the UAE’s digitally savvy population and the government’s initiatives to reduce reliance on cash. Consumers use P2P for everything from splitting bills to settling small transactions, while businesses use P2P for employee reimbursements, vendor payments in informal markets, and loyalty program payouts. Merchants also integrate P2P solutions to create frictionless checkout experiences. Paymob’s research shows that businesses offering P2P options have seen a 17% increase in conversion rates, as customers increasingly value seamless and real-time payment experiences.
Driving the Future of Payments in the UAE
These trends are redefining how businesses operate and transact with customers. Same-day settlement, P2P payments, RNPL, and microlending are all addressing real-world problems, offering liquidity, inclusivity, and operational efficiency. By addressing challenges and creating opportunities, these innovative financial services solutions are shaping a payments ecosystem that is future-ready. In the UAE, where ambition meets innovation, the evolution of payments is only just beginning.
