Driving the Digital Economy: How the UAE is Revolutionizing Payments and Tourism

By Salima Gutieva, Vice President & UAE Country Manager, Visa

Digitizing commerce is high on the agendas of many countries across the globe. In the UAE, the government, recognizing the benefits of digital payments for consumers, businesses, and the national economy, is driving forward its digital economy agenda through strategic collaboration with local and global financial institutions, fintechs, the business community, and payment technology players. 

The UAE government has also introduced important initiatives such as the Digital Economy Strategy to double the digital economy’s contribution to the country’s Gross Domestic Product from 9.7% to 19.4% within 10 years. For the UAE’s SME sector and entrepreneurs – a key engine of growth contributing as much as 63.5% to the country’s non-oil GDP – the government formed a National Entrepreneurship Agenda among other initiatives, to promote innovation and digital transformation within the sector. 

Empowering SMEs and Entrepreneurs

According to Visa’s recent Value of Acceptance study, around 70% of retailers in the UAE said digital payments is essential to business growth. To empower SMEs, cost-effective acceptance solutions are instrumental in facilitating their growth and success. Initiatives like the She’s Next Grant Program provide valuable support to women entrepreneurs, contributing to a more inclusive business environment.

Furthermore, innovative payment solutions have been growing in popularity in the UAE, which enables retailers to offer their customers a seamless, secure, flexible credit option by way of installments. In fact, the UAE is the first market worldwide where Visa Instalment Solutions (VIS) was launched with a set of unique, industry-wide features.

Role of Fintechs in Boosting Digital Payments

Besides small businesses, the financial sector is also a key driver of the economy. The growth of this sector is fueled by fintech innovations, which have attracted large-scale foreign investments while supporting the growth of SMEs, promoting entrepreneurship, and providing employment. Various programs including the Visa Everywhere Initiative have been implemented to support fintechs and entrepreneurs and scale up their solutions to solve today’s – and tomorrow’s – challenges in digital payments and commerce.

Digital Payment Transformation for UAE Tourism

As the UAE continues to solidify its position as a global business hub, tourism emerges as another key driver of growth, contributing 11.7% to the economy and AED220 billion in 2023, according to the World Travel & Tourism Council’s (WTTC) 2024 Economic Impact Research.

This robust performance is further underscored by travel analysis company ForwardKeys, ranking the UAE among the top 10 tourism destinations worldwide experiencing the strongest growth in international visitors in 2023 compared to 2019. In fact, overall spending by international tourists in 2022 was close to AED117.6 billion in UAE, and in 2023 alone, international visitors surged by nearly 40%, with DXB airport emerging as the world’s busiest international airport, surpassing pre-pandemic passenger levels by a significant margin .

The UAE government recently announced an AED37 billion investment to support its 2030 tourism strategy to increase the sector’s GDP contribution.  Digital payments also has an important role in the country’s tourism growth story.  Despite the remarkable growth we’ve seen, the prevalence of cash transactions in crosshaverder spending and travel highlights a substantial opportunity for the tourism sector. Leveraging their inherent advantages such as ubiquity, convenience, security, reliability, and accessibility, digital payments are poised to reshape the tourism landscape in the UAE.

With security and convenience being paramount concerns post-pandemic, further modernizing digital payment infrastructure becomes imperative to meet the expectations of travelers and enhance their overall visitor experience in the UAE. By offering seamless and secure digital payment options, the UAE can position itself as an even more technologically advanced and visitor-friendly destination, further amplifying its appeal to global travelers.

That’s why companies within the industry must continue to leverage technology, brand, and global networks of cardholders, as well as their bank and merchant partners to support the UAE government’s efforts to promote tourism.  Fostering public-private partnerships will further accelerate the adoption of digital payment solutions tailored to the unique requirements of the UAE’s tourism sector. This collaborative approach ensures that tourists have access to a diverse array of digital payment options, ranging from contactless payments to mobile wallets, facilitating frictionless transactions throughout their journey.

Innovation and Cybersecurity

Trust is the foundation of digital commerce. As consumers increasingly prioritize security and protect their personal information and funds, working to foster confidence in digital payments and commerce will be critical. As a company, we have invested more than $10 billion over the past five years to ensure secure transactions and build trust. In this regard, tokenization has revolutionized security for cardholders. This technology replaces sensitive card data with tokens, enhancing security, boosting sales conversions, and slashing fraud rates. It has boosted sales conversion by more than 5% and reduced fraudulent transactions by 30-50%. 

Presently, issuers and merchants alike are turning to data and insights from Artificial Intelligence (AI) and Machine Learning data models. Then incorporated into the buyer journey, this data-led approach lowers checkout friction, enhances real-time decision-making, and lends a better customer experience.

To support this experience, Visa’s AI-driven security protocols help build a resilient, world-class digital payment infrastructure. The company is currently developing AI value-added services, such as Real-Time Payments (RTP) prevention for fraud prevention on account-to-account transactions, and smarter solutions for stand-in processing and settlement forecasting. This has included $500 million on AI and data infrastructure, enabling us to power 100 different capabilities that use AI to protect clients and customers. In fact, in 2022 alone, we proactively prevented $27.1 billion in potential fraud.

Technologies like Visa Advanced Authorization (VAA) and Visa Consumer Authentication Service deliver the intelligence to reduce fraud and false declines while limiting friction for a better cardholder experience. This year, we expanded our global Value-Added Services business with three new AI-powered risk and fraud prevention solutions.

Ensuring a secure and seamless digital payment experience is essential for building trust and confidence among consumers and businesses. There are many strategies in place, such as the National Cyber Security Strategy and the Dubai Cyber Security Strategy, which position the UAE as a leader in innovation, security, and safety.

The establishment of the UAE Cybersecurity Council in 2020 reflects the government’s commitment to enhancing cybersecurity measures. In addition to government efforts, private companies like Visa have invested in campaigns like Stay Secure with Dubai Police to educate people, businesses, and local communities on how to protect themselves from evolving cyber threats and fraud.

Future Forward: Transitioning to a Digital Economy

Various stakeholders, including international companies, local banks, businesses, and government entities, are committed to shaping the digital payments landscape in the UAE.  Through continued collaboration, we can accelerate the transition from cash to a digital economy. This transition not only increases convenience and security for retailers and consumers alike, but also helps create an even more prosperous and inclusive future for everyone, everywhere in the country.