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Visa Highlights Programmes Supporting UAE Startups as Region Blossoms Amid Tough Economic Situations

“The UAE has witnessed a surge in investments in this [fintech] sector, despite the global investment decline in financial technology”, said Hasan Kazmi, head of digital partnerships for Visa, as the payments giant affirms the UAE’s position in the fintech world.

Kazmi highlighted the Visa three-year partnership with the Dubai FinTech Summit as a way the company is supporting and advancing fintech in the region. He also noted the UAE’s keenness to empower the next generation of digital companies and entrepreneurs to achieve growth and prosperity.

A report by Innovate Finance indicated that global investments in fintech decreased by 42 per cent. Meanwhile the UAE stood out as a leading hub for financial technology in 2023, as it witnessed a significant increase of 92 per cent in total investment in this sector reaching $1.3billion through 54 deals. This was supported by business-friendly financial technology regulations and the widespread adoption of digital banking services.

Kazmi also spoke about several initiatives and programmes led by Visa to support fintech start-ups, including the Visa Everywhere initiative. It serves as a global platform for start-ups to showcase their innovations and secure potential funding.

Another example is the Fintech Fast Track programme aimed at accelerating the onboarding process and providing necessary resources for rapid growth and market entry.

The “Visa Ready to Launch – VRTL” programme is also another example of Visa supporting fintechs. It aims to simplify the process of issuing payment products.

Collaboration is the key to success

Visa has also demonstrated its keenness on the ecosystem through various collaborations with fintech companies. These include AlaanPay, which provides a comprehensive platform for expense management supported by artificial intelligence (AI) for small and medium-sized enterprises, and Tarabut Gateway, a regional open banking platform aimed at enhancing customers’ experiences, simplifying cross-border transactions and encouraging financial innovation through leveraging open banking.

This represents Visa’s first project in the local open banking sector.

Growth of digital payments

Regarding the growth of digital payments using cards in the Emirati market, Kazmi explained that card payments were the most common online payment method in the UAE last year. They accounted for nearly half of all transactions at 48 per cent, while digital wallets came in second. They represented slightly less than a quarter of transactions at 23 per cent of the total.

Mobile payments are also increasingly becoming the preferred option for in-store payments. Especially with the use of mobile payment services at point-of-sale terminals in the UAE witnessing a significant increase.

The mobile phone usage rate for payment transactions at point-of-sale increased from 28 per cent in 2020 to 41 per cent in 2023. This indicates a growing trend towards mobile payment solutions among Emirati consumers. Additionally, it reflects a shift towards more convenient and secure payment methods.

Looking to the future

Regarding the volume of digital payments using cards compared to cash payments, Kazmi said: “Digital payments occupy a leading position in the UAE, with cards accounting for most payment wallets. However, nearly 20 per cent of transactions still occur in cash.”

He confirmed the presence of a robust financial system in the UAE that is more than capable of handling local and international payments.

He noted Visa’s role in facilitating regional, international, and cross-border transactions seamlessly and processing up to 76,000 transactions per second globally and within moments. Visa can process payment data, route them between parties, and allow transactions with risk management across 200 countries and regions, he added.

Regarding the outlook for the electronic payments market in the Middle East and the UAE, Kazmi stated: “The electronic payments market in the region, including in the UAE, is witnessing growth across various sectors, such as card-based payments, e-commerce, and mobile payments, and digital wallets are a crucial element in this growth journey, emerging as the fastest-growing online payment method in the Middle East and Africa region, as well as globally.”

“Digital wallets accounted for 23 per cent of e-commerce spending in 2023 in the Middle East and Africa region, with a 35 per cent year-on-year increase in transaction value. Looking ahead, further growth in the electronic payments market is expected, driven by various factors such as technological innovation, e-commerce growth, and shifting consumer preferences towards non-cash transactions,” he added.

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