The UAE's Buy Now Pay Later (BNPL) sector is anticipated to expand at a consistent rate in the medium term, with payments expected to rise by 18.5 percent annually to hit $2.45 billion by 2024. The BNPL industry's growth trajectory in the country is robust, with payment adoption set to increase steadily, achieving a Compound Annual Growth Rate (CAGR) of 12.4 percent from 2024 to 2029. The BNPL gross merchandise value is forecast to surge from $2.07 billion in 2023 to $4.41 billion by 2029, according to a recent report on the BNPL Market.
This report offers an in-depth, data-driven analysis of the BNPL industry, examining market opportunities and risks across various retail sectors. It provides a comprehensive overview of BNPL market dynamics, size, and forecasts, along with market share statistics, using over 75 key performance indicators (KPIs) at the country level. The BNPL model gained significant traction as the Covid-19 pandemic accelerated online shopping, and its popularity has persisted among consumers. Global BNPL loans facilitated $75 billion in online transactions in 2023, a 14.3 percent increase from 2022, as per Adobe Analytics.
In the UAE, the BNPL market has flourished in recent years, driven by heightened e-commerce activity. The Central Bank of the UAE introduced new regulatory measures in December 2023 to supervise BNPL services, stipulating that providers must operate as agents of licensed banks or financial institutions, subject to central bank approval. Notably, Dubai-based Astra Tech's subsidiary, Quantix Technology Projects, received a license from the Central Bank of the UAE to offer microfinancing, including various BNPL options to residents.
Alif, a prominent global fintech company, launched its suite of financial services in the UAE market in September 2023, featuring products such as 'send now pay later' and 'buy now pay later'. The report highlights that the increasing adoption of BNPL among consumers, along with new market entrants, will bolster the market's growth in 2024. Existing BNPL providers are also attracting investments from venture capital and private equity firms.
The market's growth outlook over the next three to four years has prompted regulatory scrutiny, with the central bank in the Emirates issuing new guidelines for BNPL firms, mandating licensing to operate. These guidelines, coupled with growing adoption, are expected to foster sustainable industry growth. Firms are securing debt and equity financing to expand their offerings in the region, driven by the rising demand for BNPL solutions. Tabby, a leading UAE-based BNPL firm, secured $700 million in debt financing from JPMorgan and extended its Series D round to $250 million in November 2023, reinforcing its position in the domestic and regional markets with an annualized transaction volume exceeding $6 billion.
