UAE Buy Now Pay Later Business and Investment Opportunities Databook - 75+ KPIs on BNPL Market Size, End-Use Sectors, Market Share, Product Analysis, Business Model, Demographics - Q1 2025 Update

Key Insights

Rapid Growth in BNPL Adoption

• The UAE's BNPL market has grown substantially, driven by rising consumer demand for flexible payment options. Consumers increasingly opt for installment-based transactions as an alternative to credit cards, highlighting the growing preference for short-term, interest-free financing.
• E-commerce expansion has played a crucial role in driving BNPL adoption, with major providers such as Tabby, Spotti, Postpay, and Tamara forming partnerships with retailers across various sectors. Consumers gain greater access to flexible financing solutions as more merchants integrate BNPL options into their payment systems. The trend is further reinforced by the increasing reliance on digital payments in the UAE, making BNPL a seamless fit for online and offline purchases.
• As BNPL expands across retail and service industries, providers will likely introduce new financing models and partnerships to sustain market momentum.

Diversification of BNPL Applications

• BNPL services in the UAE are expanding beyond traditional retail, reaching sectors such as automotive and education. This shift reflects the growing demand for installment-based payments for higher-value transactions. A notable instance is Arabian Automobiles' partnership with Spotii, which introduced the region's first BNPL service for automotive sales, allowing consumers to purchase cars through flexible payment plans.
• Consumers seeking manageable and interest-free payment solutions for significant purchases drive the demand for BNPL in high-ticket transactions. BNPL providers are adapting their services to cater to this evolving demand, offering installment options for industries traditionally relying on loans or upfront payments. As financial accessibility remains a priority, BNPL providers increasingly target non-retail sectors to diversify their revenue streams.
• Over the next 2-4 years, the expansion of BNPL into new sectors is expected to accelerate, broadening adoption across various industries. Installing installment-based payments for high-value goods and services will encourage consumers to make large-scale purchases, driving overall spending. As a result, BNPL providers will likely develop customized financing models tailored to different sectors, further solidifying their role in the UAE’s digital payments ecosystem.

Entry of Traditional Financial Institutions into BNPL

• Traditional financial institutions in the UAE are entering the BNPL market to capitalize on the growing demand for installment-based payments. Abu Dhabi Islamic Bank (ADIB) has partnered with Spotii to launch a virtual BNPL prepaid card, enabling customers to split purchases into flexible installments. This move signals a shift in how banks integrate BNPL offerings to complement their existing credit and financing products.
• The increasing adoption of BNPL among consumers has prompted banks to explore partnerships with established providers rather than developing standalone solutions. By collaborating with fintech companies, traditional banks can leverage existing BNPL infrastructure while expanding their product portfolios. This approach allows financial institutions to remain competitive in the evolving digital payments landscape and cater to consumer preferences for alternative credit options.
• Over the next 2-4 years, banks' involvement in BNPL is expected to enhance trust and regulatory compliance within the sector. Consumers may be more inclined to use BNPL services established banks offer, leading to broader adoption. Additionally, the entry of financial institutions could lead to more structured and regulated BNPL products, ensuring responsible lending while maintaining the flexibility consumers seek.

Competitive Landscape and Regulatory Developments in United Arab Emirates's Buy Now, Pay Later (BNPL) Market

Current State of the BNPL Market

• The BNPL market in the UAE has expanded rapidly, fueled by growing consumer demand for flexible payment solutions and the rise of digital commerce. The increasing preference for BNPL reflects shifting financial habits, particularly among younger consumers and expatriates seeking alternative credit solutions.
• The UAE’s BNPL sector is projected to continue its strong growth trajectory over the next five years. The expansion of e-commerce, partnerships with retailers, and entry of financial institutions are expected to drive wider adoption. As competition intensifies, BNPL providers will likely focus on service diversification and user-friendly payment models to maintain market share.

Key Players and New Entrants

• Tabby - One of the UAE's leading BNPL providers, recently secured US$700 million in debt financing from JPMorgan.
• Tamara - A Saudi-based provider expanding aggressively in the UAE market.
• Spotii - A BNPL provider partnered with Abu Dhabi Islamic Bank (ADIB) to integrate flexible payment options into banking services.
• Postpay and Cashew - Both players partner with retailers and financial institutions to expand their BNPL offerings.
• International entrants such as Klarna and Alif also expanded into the UAE, increasing market competition.

Recent Launches, Mergers, and Acquisitions

• The UAE’s BNPL market has seen significant financial investments and strategic expansions in recent months. In November 2023, Tabby secured an additional US$250 million in Series D funding, reinforcing its position as the country’s leading BNPL provider. This funding enables Tabby to scale its services, expand partnerships, and maintain its competitive edge against emerging players in the market.
• Beyond retail, BNPL services are diversifying into new sectors. In September 2023, Tabby partnered with Arabian Automobiles, extending BNPL to vehicle maintenance and repairs, signaling the expansion of installment-based payments beyond traditional shopping. This move highlights the potential for BNPL to penetrate industries with limited flexible financing options.
• New entrants and collaborations between fintech firms and banks are also reshaping the market. Alif, a global fintech firm, entered the UAE in September 2023, introducing BNPL and remittance services to compete with existing players. Additionally, Abu Dhabi Islamic Bank (ADIB) launched a BNPL virtual prepaid card in partnership with Spotii, integrating BNPL into banking services. These developments indicate increased competition and further integration of BNPL into the UAE’s financial ecosystem.

Outlook

• This sustained growth will be driven by increasing consumer demand for flexible financing options and expanding BNPL offerings into new sectors. As more consumers shift away from traditional credit models, BNPL is expected to solidify its role as a preferred payment method.
• Beyond retail, BNPL is expanding into healthcare, education, automotive, and travel, broadening its adoption across a wider demographic. Introducing installment-based payments in these industries will enable consumers to finance essential services, further embedding BNPL into the UAE's financial ecosystem. As a result, BNPL providers will continue innovating their offerings to cater to industry-specific needs and customer preferences.
• The competitive landscape will evolve as traditional banks enter the BNPL space by launching their services or partnering with fintech firms. This shift will drive increased regulation and oversight, ensuring BNPL providers maintain financial transparency and responsible lending practices. As the UAE Central Bank strengthens its regulatory framework, BNPL companies must adapt to compliance requirements while expanding their market reach.

Regulatory Changes

• To enhance consumer protection, the CBUAE has mandated that BNPL providers disclose all fees and repayment terms transparently. Additionally, total fees, including late payment charges, cannot exceed 30% of the loan amount, preventing excessive consumer debt burdens. These measures ensure that consumers are fully aware of the costs associated with BNPL transactions and protect them from predatory lending practices.
• As BNPL adoption grows, the CBUAE is enforcing responsible lending practices to mitigate risks associated with over-indebtedness. The new framework encourages financial sustainability, requiring providers to assess borrowers' repayment capacity before extending BNPL services. These regulatory changes will shape the future of BNPL in the UAE, balancing market expansion with financial security and ensuring that BNPL remains a viable and regulated payment option.

Scope

UAE BNPL Market Size and Spending Pattern

• Gross Merchandise Value Trend Analysis
• Average Value Per Transaction Trend Analysis
• Transaction Volume Trend Analysis

UAE Buy Now Pay Later Revenue Analysis

• Buy Now Pay Later Revenues
• Buy Now Pay Later Share by Revenue Segments
• Buy Now Pay Later Revenue by Merchant Commission
• Buy Now Pay Later Revenue by Missed Payment Fee Revenue
• Buy Now Pay Later Revenue by Pay Now & Other Income

UAE Buy Now Pay Later Operational KPIs & Statistics

• Buy Now Pay Later Active Consumer Base
• Buy Now Pay Later Bad Debt

UAE BNPL by Purpose

• Convenience - Short Term Loans
• Credit - Long Term Loans

UAE BNPL by Business Model

• Two-Party (BNPL offered by retailers)
• Three-Party BNPL Offering

UAE BNPL by Merchant Ecosystem

• Open Loop System
• Closed Loop System

UAE BNPL by Distribution Model Analysis

• Standalone
• Banks & Payment Service Providers
• Marketplaces

UAE Buy Now Pay Later Market Share Analysis by Key Players

UAE BNPL Analysis by Channel

• Online Channel
• POS Channel

UAE Buy Now Pay Later in Retail Shopping: Market Size and Forecast

• Gross Merchandise Value Trend Analysis
• Average Value Per Transaction Trend Analysis
• Transaction Volume Trend Analysis

UAE Buy Now Pay Later in Home Improvement: Market Size and Forecast

• Gross Merchandise Value Trend Analysis
• Average Value Per Transaction Trend Analysis
• Transaction Volume Trend Analysis

UAE Buy Now Pay Later in Travel: Market Size and Forecast

• Gross Merchandise Value Trend Analysis
• Average Value per Transaction Trend Analysis
• Transaction Volume Trend Analysis

UAE Buy Now Pay Later in Media and Entertainment: Market Size and Forecast

• Gross Merchandise Value Trend Analysis
• Average Value per Transaction Trend Analysis
• Transaction Volume Trend Analysis

UAE Buy Now Pay Later in Services: Market Size and Forecast

• Gross Merchandise Value Trend Analysis
• Average Value Per Transaction Trend Analysis
• Transaction Volume Trend Analysis

UAE Buy Now Pay Later in Automotive: Market Size and Forecast

• Gross Merchandise Value Trend Analysis
• Average Value Per Transaction Trend Analysis
• Transaction Volume Trend Analysis

UAE Buy Now Pay Later in Healthcare and Wellness: Market Size and Forecast

• Gross Merchandise Value Trend Analysis
• Average Value Per Transaction Trend Analysis
• Transaction Volume Trend Analysis

UAE Buy Now Pay Later in Others: Market Size and Forecast

• Gross Merchandise Value Trend Analysis
• Average Value Per Transaction Trend Analysis
• Transaction Volume Trend Analysis

UAE Buy Now Pay Later Analysis by Consumer Attitude and Behaviour

• Sales Uplift by Product Category
• Share by Age Group
• Share by Income
• Share by Gender
• Adoption Rationale
• Monthly Expense Segments

Reasons to buy

• Insights on Strategy & Innovation: Navigate through future direction of the Buy Now Pay Later industry market by understanding strategic initiatives taken by key players to gain market share and innovation.
• In-depth Understanding of BNPL Market Dynamics in United Arab Emirates: Understand emerging opportunities and future direction of the BNPL market, key drivers, and trends. Benefit from a detailed market segmentation with 75+ KPIs.
• Value and Volume KPIs for Accurate Understanding: Value and volume key performance indicators (KPIs) help in developing an accurate understanding of market dynamics.
• Competitive Landscape: Get a snapshot of competitive landscape in BNPL sector with key players and market share in United Arab Emirates. Formulate your strategy by gaining insights into the current structure of the market.
• Develop Strategies to Gain Market Share: Create and fine tune your targeting strategy in the BNPL sector, identify growth categories and target specific segments across the value chain; evaluate important trends and risks unique to your market.
• Deeper Understanding of Consumer Behaviour: Increase ROI by understanding how consumer attitudes and behaviours are evolving. Get a detailed view on retail spending dynamics across consumer segments.