In 2023, electronic transactions comprised over 37 per cent of all transactions in the UAE. Image Credit: Supplied

Dubai: UAE experienced 53 per cent year-on-year growth in real-time payment transactions in 2023, reaching a total of 58 million, according to a new report from US-based ACI Worldwide, a payment systems company focused on facilitating real-time economic payments. This figure is projected to soar to 162 million by 2028. The value of transactions facilitated by real-time payments is also expected to rise dramatically, from $43 billion in 2023 to $132 billion by 2028.

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According to ACI Worldwide’s 2024 Prime Time for Real-Time report, published in collaboration with Global Data, real-time payments are fast becoming the foundation of the UAE's economy.

The report underscores the nation's progress towards a cashless economy, driven by the surge in electronic transactions. “Real-time payments eliminate payment friction, inject greater liquidity into the financial system, and promote economic growth and financial inclusion,” the report said.

Commenting on how banks in the country capitalise on the real-time payment rails, Santhosh Rao, Senior Vice President of sales at ACI Worldwide MEASA, said, “Local banks are at a pivotal juncture where they must harness technological evolution as the catalyst for innovation. The path to innovation lies in modernising and future-proofing their infrastructure, enabling them to leverage the potential of real-time payments fully.”

He said the real-time and electronic payments surge highlights the UAE's strong commitment to transitioning to a cashless economy.

In 2023, electronic transactions comprised over 37 per cent of all transactions in the country and accounted for 78 per cent of the transaction value. “Real-time payments alone comprised 4 per cent of electronic transactions last year, with expectations to grow to 7 per cent by 2028. The ACI report projects that cash-based transactions will decline to just 20 per cent of the total transaction value in the UAE by 2028,” the report explained.

Rao explained the importance of collaboration in achieving a successful real-time payment ecosystem. “Active collaboration is the cornerstone of a thriving real-time payment ecosystem, fostering an environment where banks must navigate a delicate balance of competition and cooperation with emerging market players. The world's most successful real-time payment schemes, exemplified by India's achievements, showcase a myriad of real-time payment methods via QR codes, mobile apps, or online accounts, pushing the boundaries of innovative use cases,” he explained.

With the Middle East leading the world in real-time payments growth, Rao recommended that financial institutions seize the opportunity to study these successes and extract valuable insights to inspire the launch of their pioneering real-time payment solutions.