How To Make Payments In The UAE vs Egypt?

Both consumers and organizations need to comprehend the payment trends and preferences in Egypt and the United Arab Emirates. Due to the COVID-19 pandemic, digital reforms, and central bank activities, both countries are experiencing notable shifts in their payment networks.

UAE's Top Payment Methods And Trends

1. Decline in Cash Use: The United Arab Emirates has had remarkable success in promoting a cashless economy. Cash's share of POS transaction value dropped dramatically from 67% in 2019 to just 17% in 2023. Even though cash will still be used in e-commerce—6% of purchases made through cash on delivery in 2023—its significance is declining.

2. Growth of Digital Wallets: In the United Arab Emirates, digital wallet usage is rapidly increasing. Along with global names like Apple Pay, Google Pay, and PayPal, domestic wallets like Careem Pay and e& money are growing in popularity. The anticipated compound annual growth rate (CAGR) for digital wallet transaction value in e-commerce is 23%, while in point of sale (POS) it is 17%. Digital wallets are expected to rapidly increase transaction value by 2027 and overtake cash payments as the most popular online and in-store payment options.

3. Credit Card Domination: With credit cards representing 37% and 38% of transaction value, respectively, credit cards currently rule both e-commerce and point-of-sale transactions in the United Arab Emirates. But as more people choose the ease and security of digital payments, this dominance is anticipated to fade given the quick uptake of digital wallets.

4. Growth of Account-to-Account (A2A) Payments: The United Arab Emirates' efforts to transform payments online are contributing to the expansion of A2A payments. A2A payment growth is expected to reach a 19% compound annual growth rate (CAGR) by 2027, propelled by the growing popularity of open banking and the need for smooth, direct transfers.

Top Payment Methods And Trends in Egypt

1. Predominance of Cash: Unlike the UAE, Egypt continues to be the country where cash is most frequently used for payments. Due to a strong cultural preference and a lack of digital infrastructure, cash payments account for almost 94% of all transactions. Less than one-third of online purchases are paid for with cards; the bulk are paid with cash or other digital payment methods.
2. The Growing Usage of Digital Wallets: Egypt is seeing a rise in the use of digital wallets despite cash's continued dominance. Online payments, utility bill payments, and regular transactions are all commonly made using one of the most well-known digital wallets, Fawry. Being different in the market is a result of its gamification strategy, which pays customers for purchases. More than 40% of mobile devices are being used for online transactions, which is encouraging the development of digital wallets.
3. Limited Card Usage: Less than one-third of all internet purchases made by Egyptians are made with cards. A number of variables, including low banking penetration and concerns about digital payment confidence, contribute to this low card usage. However, card usage is anticipated to rise as digital infrastructure advances and customer trust increases progressively.
   

   CONCLUSION

   In the UAE, cash use is dropping as digital wallets and A2A payments rise, driven by digital transformation. While credit cards are still dominant, the future is leaning towards digital solutions.

   In Egypt, cash remains prevalent due to cultural preferences and limited digital infrastructure. However, digital wallets and mobile payments are gaining traction.

   In conclusion, Egypt is gradually making the transition with rising acceptance of digital wallets despite a strong preference for cash, whereas the UAE is quickly adopting digital payment systems. Businesses hoping to navigate and thrive in these unique markets must comprehend these peculiarities.

   The author of this blog is Abhinav Paliwal, the CEO of PayNet Systems, PayNet is dedicated to helping businesses enhance their payment gateway performance using digital wallets. This solution boosts user retention, increases loyalty, and ensures seamless integration with top-notch security.
   
   To learn more about how PayNet can benefit your business, reach out to me at abhinav@paynet.pro