In the United Arab Emirates, a quiet revolution in how people pay for things is gathering force — not through credit cards or loans in the traditional sense, but through the promise of deferred payment without penalty. The buy now pay later sector, once a speculative frontier, is maturing rapidly: transaction volumes are set to nearly double by 2029, homegrown champions like Tabby have attracted billions in global capital, and regulators have at last drawn the boundaries within which this new form of commerce must operate. What is unfolding in the Emirates is a microcosm of a broader human neg
UAE Buy Now Pay Later Market Poised to Double by 2029 Amid Global Competition
A market that's doubling in five years, with regulatory clarity emerging at exactly the right moment.
Mark
Why is the UAE market specifically interesting to global fintech firms right now?
Mimi
The numbers tell the story—a market that's doubling in five years, with millions of digitally savvy consumers already comfortable with e-commerce and flexible payment methods. It's not just growth; it's growth in a region with real purchasing power and regulatory clarity emerging at exactly the right moment.
Mark
The central bank's licensing rules—are those a help or a hindrance to the companies already operating?
Mimi
They're a help, paradoxically. Yes, they create compliance costs and bureaucratic overhead. But they also eliminate the uncertainty that comes with operating in a gray zone. Tabby and others have already raised hundreds of millions in capital; they can afford to get licensed. Smaller, undercapitalized competitors can't. The rules actually entrench the winners.
Mark
Tabby's diversification into Tabby Card and Tabby Shop—is that defensive or offensive?
Mimi
Both. Offensive because they're chasing higher transaction volumes and stickier customer relationships. Defensive because global players like Alif are coming in with full financial services suites. If Tabby stays only in BNPL, it becomes a feature, not a platform. By expanding, it becomes harder to displace.
Mark
What happens to the consumer in all this competition?
Mimi
In the short term, more choice and better products. In the long term, it depends on whether the regulatory framework holds. If the central bank enforces the licensing rules and monitors bad debt and consumer protection, competition drives innovation without creating systemic risk. If enforcement is lax, you get a race to the bottom on underwriting standards.
Mark
Is there a ceiling to this market, or does it just keep growing?
Mimi
There's always a ceiling. At some point, market saturation, economic slowdown, or credit stress will slow growth. But we're not there yet. The market is still in the phase where new use cases—automotive, healthcare, travel—are being unlocked. The real question is whether the market grows into a mature, profitable industry or becomes a commodity where margins compress and only the largest players survive.
Le Pouls
- The UAE's BNPL market is accelerating faster than anticipated, with 2024 transaction volumes projected to jump 16.6% to $3.04 billion — a pace that is outrunning the infrastructure built to contain it.
- Tabby, the homegrown frontrunner, has absorbed nearly $1 billion in combined funding and now processes over $6 billion in annualized transactions, signaling that investor confidence in the region's digital consumer appetite is far from cooling.
- Global fintech rivals are arriving in force — Alif's September 2023 UAE launch brought not just BNPL but an entire suite of deferred-payment products, raising the competitive temperature considerably.
- For years the sector operated without formal rules, but the UAE Central Bank's December 2023 licensing framework has changed the terrain overnight, requiring all BNPL providers to either obtain their own restricted license or shelter under a licensed institution.
- Rather than dampening growth, the new regulatory clarity is being read by investors and operators alike as a green light — a signal that the UAE is treating BNPL not as a curiosity but as a permanent fixture of its financial landscape.
In the United Arab Emirates, a quiet revolution in how people pay for things is gathering force — not through credit cards or loans in the traditional sense, but through the promise of deferred payment without penalty. The buy now pay later sector, once a speculative frontier, is maturing rapidly: transaction volumes are set to nearly double by 2029, homegrown champions like Tabby have attracted billions in global capital, and regulators have at last drawn the boundaries within which this new form of commerce must operate. What is unfolding in the Emirates is a microcosm of a broader human negotiation between financial convenience, commercial ambition, and the enduring need for institutional order.
The buy now pay later market in the UAE is on course to nearly double in size within five years, with gross merchandise value expected to rise from $2.60 billion in 2023 to $5.07 billion by 2029 — a compound annual growth rate of 10.8 percent. This year alone, BNPL payments are forecast to reach $3.04 billion, reflecting an acceleration that few anticipated when the sector first emerged in the region.
Two forces are driving this expansion. Consumers across the Emirates have embraced the appeal of splitting purchases into installments — no interest, no collateral, no upfront deposit. Meanwhile, investors have responded with conviction: Tabby, the market's homegrown leader, secured $700 million in debt financing from JPMorgan and closed a $250 million Series D extension in late 2023. The company now serves more than 10 million users, partners with over 30,000 brands, and processes more than $6 billion in annualized transaction volume. It has also broadened its offering beyond core BNPL, launching Tabby Shop, a branded payment card that accounts for over 20 percent of its total volumes, and a partnership with Arabian Automobiles for vehicle maintenance payments.
Global competitors are taking notice. Alif, an international fintech firm, entered the UAE market in September 2023 with a full suite of deferred-payment products — including send now pay later and fly now pay later — alongside global remittance services. As more international players arrive, the competitive pressure on existing firms to innovate and expand is expected to intensify sharply.
Underpinning all of this is a regulatory shift that arrived in December 2023, when the UAE Central Bank issued comprehensive licensing requirements for BNPL providers. Firms must now either obtain a restricted finance company license or operate as agents of licensed banks. The rules define short-term credit clearly and require unlicensed operators to come into compliance. Far from being seen as a constraint, industry observers regard the framework as a stabilizing force — one that lends credibility to the sector, protects consumers, and gives investors the long-term confidence they need. The UAE's BNPL market, once a speculative experiment, is beginning to look like a permanent feature of the region's financial architecture.
The buy now pay later market in the United Arab Emirates is on track to nearly double in size over the next five years, driven by a combination of rising consumer appetite for flexible payment options and an influx of both homegrown and international fintech firms competing for market share. The sector's gross merchandise value—the total value of transactions flowing through these platforms—is expected to climb from $2.60 billion in 2023 to $5.07 billion by 2029, representing a compound annual growth rate of 10.8 percent. This year alone, BNPL payments are projected to reach $3.04 billion, a jump of 16.6 percent from the previous year, signaling accelerating momentum in a market that has only recently begun to mature.
The growth is being fueled by two distinct forces. On the consumer side, shoppers in the Emirates are increasingly drawn to the convenience of splitting purchases into installments without interest, collateral, or upfront deposits. On the business side, venture capital and private equity investors are pouring capital into the space, betting that the region's young, digitally native population and high e-commerce adoption will sustain expansion for years to come. Tabby, the homegrown BNPL leader, exemplifies this momentum. In November 2023, the company announced it had secured $700 million in debt financing from JPMorgan while simultaneously closing an extended Series D funding round worth $250 million. The company now manages more than $6 billion in annualized transaction volume, serves over 10 million users, and has partnerships with more than 30,000 brands across the region. Beyond its core BNPL offering, Tabby has been diversifying its product suite—launching Tabby Shop, which provides access to more than 500,000 products from thousands of brands, and Tabby Card, a branded payment card that now accounts for more than 20 percent of the company's total transaction volumes. In September 2023, Tabby also forged a partnership with Arabian Automobiles to offer flexible payment options for vehicle maintenance and repairs, extending its reach into new categories.
Global fintech firms are now racing to establish footholds in the market. Alif, a leading international fintech company, launched its full suite of financial services in the Emirates in September 2023, including not only buy now pay later but also send now pay later and fly now pay later products, along with global remittance services for residents. As more international players introduce competing offerings, the competitive landscape is expected to intensify significantly over the next three to four years, potentially accelerating innovation and forcing existing players to expand their capabilities and geographic reach.
Underlying this growth is a regulatory framework that was largely absent until recently. In December 2023, the UAE Central Bank issued comprehensive new guidelines designed to bring order to what had been an unregulated sector. Under the new rules, any business offering BNPL services must either operate as an agent of a licensed bank or financial institution, or obtain its own restricted license as a finance company. The central bank defined short-term credit—the core of BNPL—as credit extended for up to 12 months for purchasing goods or services without interest, collateral, or security deposits. Unlicensed entities currently providing such services must either apply for a license or partner with licensed institutions to continue operating. These guidelines represent a significant shift toward formalization and consumer protection, establishing clear boundaries for what had been a largely unregulated space.
Industry observers view the regulatory framework as a stabilizing force that will support sustainable growth rather than constrain it. The licensing requirements create barriers to entry that protect established players while also signaling to consumers and merchants that the sector is being taken seriously by authorities. For investors and companies already in the market, the clarity provides confidence that their business models are viable for the long term. As the market continues to expand and more global competitors enter the fray, the combination of rising consumer demand, abundant capital, and now formal regulatory oversight suggests the UAE's BNPL sector is transitioning from a speculative frontier into a mature financial services category.
Citations marquantes
Businesses providing BNPL services must operate as agents of licensed banks or financial institutions, with approval from the central bank, or obtain a restricted license as finance companies.— UAE Central Bank regulations (December 2023)
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Economy & Finance