According to PayNXT360’s Q2 2021 Global Prepaid Card Survey, prepaid card market in the United Arab Emirates is expected to grow by 15.8% on annual basis to reach US$ 6,088.4 million in 2021.The prepaid card market expected to grow over the forecast period, recording a CAGR of 14.4% during 2021-2025. The prepaid card market in the United Arab Emirates will increase from US$ 5,256.9 million in 2020 to reach US$ 8,993.3 million by 2025.

In the UAE, the domination of prepaid cards increased significantly in 2020. Cash remained the most preferred payment instrument in recent years. However, cash transactions are losing their momentum, primarily due to technological infrastructure development and security enhancement on the online transactions that allow consumers to make hassle-free transactions.

Moreover, the government’s push towards online transactions, rising popularity of gift card exchange in festivals, and payroll cards supported the prepaid card market to register strong growth. According to PayNXT360, despite near-term socio-economic challenges, the prepaid cards market growth is expected to remain strong from a medium to long-term perspective.

Prepaid card providers are bringing innovation to increase market share:

The prepaid card market in UAE is quite saturated. The government’s effort to make the cashless economy encouraged financial companies to explore every possible area. Moreover, the government initiated WPS program attracted fintech companies and traditional banks to launch their prepaid cards in the country. Consequently, fintech startups are finding new ways to enter the prepaid card market. For instance,

  • In October 2020, Savii, a UAE-based neobank announced that it would launch a prepaid debit card and mobile app for youths aged between 11 and 18 years. The company is yet to launch its service in the UAE and Bahrain. According to the company, the new prepaid card will not only allow youths to spend money, but they can create a ’savings pot’ to save their money.

    Government initiatives are expanding the payroll cards market:

    The UAE government has taken several steps to support a large number of migrant workers. In 2009, the UAE Labor Ministry and Central Bank of the UAE introduced the Wage Protection System (WPS). The initiative encouraged financial institutes to launch their prepaid cards in this segment. For instance,
  • In March 2021, Al Fardan Exchange launched its new payroll card in collaboration with Mercury. The new payroll card is designed for the WPS cardholders, enabling them to use this card in any point-of-sale terminals and ATMs.