Globally, the usage of physical money is decreasing at a rapid rate, with other payment methods such as digital wallets and buy now pay later schemes gaining increasing traction among consumers. The trend is no different in the United Arab Emirates, where digital wallets have grown into significant prominence over the last few years. The global pandemic has accelerated the trend, and now a significant proportion of consumers are using the payment solution to complete their purchases online.
The growing shift towards digital wallets is expected to further continue over the next five years in the Emirati nation. As a result, more and more businesses across industry verticals are seeking to provide digital wallet payment solutions to their consumers. To provide businesses with the capability to offer their consumers a digital wallet, financial services providers are forging strategic alliances.
Following the launch of the digital wallet service, Emarat announced that the firm collaborated with Mbank to launch the solution across 120 fuel retail locations in the Emirates. Soon, customers will be able to use the Mbank wallet to make seamless and contactless payment transactions at Emarat fuel stations. Furthermore, customers will also be able to earn MPoints, which can be later used for redeeming rewards. Going forward, PayNXT360 expects more such retailers to partner with Mbank to launch the mobile wallet service, as the demand for digital wallets continues to grow in the UAE.
Other firms are also entering into strategic partnerships to serve the growing demand for digital payments. This includes the alliance between Mashreq and i2c in March 2023. As part of the collaboration, the two firms will offer digital payment solutions in the Emirati market. Mashreq is expected to leverage i2c's software-as-a-service payment and banking solution to launch new digital payment solutions catering to the needs of customers, merchants, and fintech firms.
With more and more firms launching digital wallet solutions in the United Arab Emirates, the competitive landscape is poised to grow at an accelerated pace. As a result, existing digital wallet providers are also seeking to expand their portfolio of digital payment solutions in the Emirates.
The launch of all these solutions indicates that the demand for digital wallets and prepaid cards remains robust among consumers in the region. Going forward, PayNXT360 expects more such strategic collaborations in the Emirati nation, as players seek to diversify their product offerings and boost customer stickability. The launch of all these products, including digital wallets and prepaid cards, will keep aiding the growth of the prepaid card market in the United Arab Emirates over the next three to four years.
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