The UAE’s transition to a digital-first payments economy is gathering pace, with mobile and card-based transactions now firmly dominating everyday spending, while cash continues to retreat into a shrinking set of niche uses, according to new research by Visa.
Visa’s third Where Cash Hides report shows that 68 per cent of consumers in the UAE are now largely non-cash users, making most of their payments through cards or mobile devices. That marks a seven-percentage-point increase from last year and underscores the speed at which digital payment habits are becoming embedded across the country.
Overall, eight in ten payments, or 80 per cent, are now made digitally, reflecting one of the highest adoption rates globally. Mobile payments now account for 21 per cent of all transactions, driven by widespread smartphone penetration, strong merchant acceptance and growing consumer confidence in contactless and app-based payments.
Debit cards and mobile wallets dominate routine spending such as groceries, dining and transport, while credit cards are more commonly used for planned or higher-value purchases, reflecting the appeal of rewards, instalment plans and travel benefits.
Cash use, by contrast, continues to fall sharply in day-to-day categories. Only 16 per cent of UAE consumers surveyed still use cash for everyday purchases, down from 25 per cent last year. The decline is visible across traditionally cash-heavy segments, including local markets, taxi journeys and bill payments, where usage has dropped by double-digit percentages year on year. The trend points to a structural rather than cyclical shift, as digital options become faster, more reliable and easier to use.
Despite this broad-based move away from cash, the report highlights that cash has not disappeared entirely. Tips remain the single largest use of physical money, with 58 per cent of consumers still paying tips in cash, reflecting social norms and situational convenience. Cash is also used for international money transfers through exchange houses by about a quarter of consumers, and for property rent payments by 15 per cent. Even here, however, digital alternatives are gaining ground. Peer-to-peer digital payments rose by five percentage points over the past year to reach 35 per cent, signalling steady erosion of cash’s remaining strongholds.
“This year’s findings highlight a clear shift in consumer spending habits, with digital payments continuing to gain ground across everyday transactions,” said Salima Gutieva, vice-president and country manager for Visa in the UAE. “While cash remains present in certain categories, these areas represent meaningful opportunities to help consumers transition toward digital options that offer greater security, convenience and ease of management.
When payment experiences meet these expectations, adoption follows naturally.”
The findings align with broader industry and regulatory trends in the UAE. Data from the Central Bank of the UAE shows sustained growth in electronic payments volumes, supported by the expansion of instant payment platforms, contactless infrastructure and digital wallets. The UAE’s push towards a cash-lite economy is also reinforced by government digitalisation initiatives, smart city programmes and the rapid growth of e-commerce, which continues to expand at double-digit rates annually.
Security and transparency are key drivers behind the shift. Compared with cash, digital payments reduce the risks associated with loss or theft, provide instant transaction records and support better budgeting and expense tracking. Mobile payments add another layer of protection through tokenisation, which replaces sensitive card details with unique digital identifiers, ensuring that actual card numbers are never shared during transactions.
Rewards and value-added services are also reshaping consumer behaviour. Credit cards in particular offer cashback, loyalty points and travel or lifestyle benefits that have become an expected part of the spending experience, especially among younger and higher-income consumers.
Industry analysts say the UAE’s payments landscape is now entering a more mature phase, where the focus is shifting from adoption to optimisation. Merchants are investing in faster checkout experiences, data-driven loyalty programmes and seamless online-to-offline payment journeys, while consumers increasingly expect frictionless, secure and interoperable payment options wherever they shop or travel.
“The direction of travel is clear,” Gutieva said. “Digital payments are no longer an alternative – they are the default. The next phase is about ensuring that digital solutions are inclusive, trusted and accessible across every use case where cash still lingers.”
