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United Arab Emirates

Mobile Commerce Clusters

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Mobile Commerce Clusters
Measures partnerships among banks, mobile networks, and governments.
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Environment

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Environment
Measures economic, technological, and demographic factors within a market.
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Infrastructure

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Infrastructure
Measures the sophistication and penetration of the mobile phone industry and NFC terminalization.
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37.9

Consumer Readiness

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Consumer Readiness
Measures how familiar with, how willing to use, and how frequently consumers are currently using all three types of mobile payments.
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Financial Services

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Financial Services
Measures the effectiveness and penetration of consumer financial products.
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Regulation

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Regulation
Measures legal and regulatory structures and how they affect businesses.
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Summary

An advanced regulatory structure and a fertile environment lie behind the UAE's score of 37.9 on the MasterCard Mobile Payments Readiness Index, but unlike other advanced economies in the Middle East, the UAE lags in consumer readiness. These two very brightly defined factors together indicate a clear direction for marketing mobile payments of all types to consumers in the UAE.

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What you need to know:

The infrastructure in the UAE is ready for mobile payments, though consumers are holding back
Etisalat, the Emirates' leading telco, has partnerships with MasterCard and RIM for mobile payments
Consumer scores for each payment type were below the Index average — except P2P usage with 11% compared to the average of 8%

Country Overview

Market Forces

While consumers are unaware or holding back, the infrastructure is ready for development, with the Mobile Commerce Clusters especially strong. Etisalat's agreements with Dubai for mobile government payments, as well as the telecom's partnerships with, for example, MasterCard and Research in Motion (RIM), complement Abu Dhabi Commercial Bank's P2P venture with Mobibucks, a US company. The last-named partnership is especially significant, as payment card penetration in the UAE is lower than the Index average, just as it is

elsewhere in the Middle East. The Mobibucks pilot would dispense completely with 16–digit card numbers for authorization and use phone numbers instead. Whether or not this particular venture is successful, it shows a willingness to go outside the traditional technology grid to create new methods of payment. Handled correctly, such ventures could result in telcos extending the penetration of banks, at least as far as payment media are concerned.

UAE companies are thinking outside the box to create new payment methods.

Consumer Sentiment

In the UAE, all consumer scores for each payment type—POS, m-commerce, and P2P—were below the Index average—with the very important exception of P2P usage. It's no paradox that P2P usage should be higher than willingness or familiarity overall, as the Middle East is one of the world centers of money transfer

and remittance. Even more important, in all payment types, the responses skewed toward high income and with the exception of m-commerce (which was distributed), skewed male as well. There is a skew to older consumers (50 to 64) in POS usage, where the UAE is below the Index average, and to the youth (18 to 24) in m-commerce familiarity.

© MasterCard

GLOBAL PERSPECTIVE ON CONSUMER SENTIMENT IN THE UNITED ARAB EMIRATES

Relative to the Index average and leading countries, how do consumers feel about mobile payments?

54% - France
Country Score Index Average Leading Country

MasterCard Conclusion

As an established hub of money transfer, with favorable regulations and explicit government acknowledgement of the importance of mobile payments, the infrastructure and environment in the UAE present a favorable picture. Especially interesting are the consumer skews, with high-income youth very familiar with m-commerce, and toward older consumers in POS usage. This immediately suggests, if only in a rudimentary way, a segmentation scheme as the best way to leverage all the ingredients that are in place in the UAE.

37.9
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