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.
UAE
Buy Now Pay Later Business Model:
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.
Competitive
Landscape in UAE Buy Now Pay Later Market
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)
Future
Outlook of UAE Buy Now Pay Later Market:
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
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