The rise of instant payments and digital wallets is reshaping the global financial landscape, signalling a clear shift towards a faster, cashless economy. Worldwide, digital payments continue to surge, with the market projected to exceed $3 trillion by 2028, driven by rising consumer demand for seamless, real-time transactions.
Instant payments, in particular, are gaining ground, expected to account for over 20% of global transactions by 2028, up from around 15% in 2023, as businesses and consumers increasingly prioritise speed and convenience.
At the same time, digital wallets have become a cornerstone of this transformation. In 2025, there are already 4.5 billion digital wallet users globally, with forecasts suggesting adoption could reach 70% of the world’s population by 2030. Digital wallets now account for about 32% of point-of-sale transactions worldwide, making them the most widely used payment method across many markets. This shift is underpinned by the growth of e-commerce, contactless payments, and mobile-first lifestyles, all of which favor fast, frictionless payment experiences.
In the UAE and wider GCC region, the adoption curve is even steeper, fuelled by strong government backing and advanced digital infrastructure, thanks to growing invesment in fintech sector. A recent report by the Emirates NBD and PwC estimates that the UAE fintech market will grow from apprximately $3.16 billion in 2024 to $5.71 billion by 2029.
Similarly, the UAE’s payments ecosystem is rapidly evolving, with the national instant payments platform Aani surpassing 12.5 million users in 2026 and recording sixfold growth in transactions year-on-year. Payments on the platform are completed in just seconds, highlighting the growing demand for real-time financial interactions.
Digital wallets are also seeing significant traction in the UAE, with the market valued at $4.18 billion in 2024 and projected to double to $8.28 billion by 2030. This growth reflects a broader regional push toward cashless economies, supported by national strategies, regulatory innovation, and high smartphone penetration. Across the GCC, real-time payments are expanding at double-digit rates, with the UAE market alone expected to grow at a compound aggregate growth rate of over 14% through 2030.
“Overall, instant payments and digital wallets are no longer niche innovations, they are becoming the backbone of modern financial ecosystems. As global and regional adoption accelerates, they are redefining how consumers and businesses transact, offering speed, convenience, and efficiency that traditional payment methods struggle to match,” according an analyst.
Reducing Cash Dependency
Saad Maniar, CEO of Baker Tilly UAE, said real-time payments, digital wallets, and contactless solutions are structural enablers for conveniences.
“Research consistently shows that economies with digitally enabled payment systems progress faster on financial inclusion by lowering access barriers, transaction costs, and reliance on physical bank infrastructure. Bottom line is digital payments don’t just reduce cash, they reshape who can participate in the economy and bring accountability,” Maniar told BTR.
Atik Munshi, Managing Partner at the consultancy FinExpertiza UAE, said digital payments are not just about convenience they are more about having the right controls and reducing the informal economy. Most governments and regulators around the world are inclined to reduce the cash economy to reduce money laundering.
“Cash is one of the biggest means for money laundering and the digital transaction visibility reduces the issue. With the help of payments routed through digital means, the authorities have the chance to trace the same and the illegitimate use of money is curbed. Lesser developed countries have a large portion of an informal economy where transactions are mostly in cash both for business and personal expenses; this leaves a large portion of the economy unreported. With the help of digital payments, the same task is achieved without much hassle and hence users are inclined to accept the method,” Munshi told BTR.
Cybersecurity, Data Privacy
Munshi said cybersecurity and privacy threats are pervasive in any digital eco system. “Digital service providers whether they are banks, fintechs, payment gateways providers, digital wallet providers or any other service provider in the chain faces the same threat and hence billions of dollars are invested to mitigate the same. More or less, the risks from such threats are real but the impact of them historically is very well within manageable limits as long as the service providers resorts to the right security mechanisms,” he said.
Maniar said the shift to instant payments at anytime compresses reaction time while expanding attack surfaces.
“Real-time payments are particularly vulnerable to fraud because transactions settle before traditional controls intervene. Speed without intelligence magnifies risk. Resilience now depends on intelligent, real-time trust engines, not perimeter security alone,” he said.
Key challenges are Authorized Push Payment (APP) scams, social engineering, and account takeovers. AI-driven fraud, including deepfakes and synthetic identities, he said. “Effective mitigation strategies could be real-time, AI-based fraud monitoring (not post transaction controls). Strong digital identity (biometrics, device binding, behavioural analytics). Tokenisation and encryption rather than storage of raw credentials. More importantly clear liability models and regulatory alignment,” he added.
Maniar is of the view that digital wallets are not substitute to banks, although they have been facilitating the financial customers and people in day-to-day life.
“Evidence strongly suggests extension, not replacement,” he said.
“Digital wallets excel at experience, speed, and accessibility, while banks retain trust anchors such as balance-sheet strength, regulation, and risk management. Wallets replace interfaces, not institutions. Banks that fail to integrate, however, risk becoming invisible utilities. Recall your memory from the recent past about Kodak, Blackberry and Nokia,” Maniar added.
Munshi of FinExpertiza UAE expresses a different point of view and said the future will answer that. “We see the growth of digital platforms which offer functions to the users where there is no physical interaction with the banks. I feel that we should relook to the definition of the word ‘bank’,” he said.
Scaling Digital Payments
About the biggest challenge in scaling digital payments today, Maniar said the single biggest challenge is trust and security consistency. “Scaling payments today is no longer a tech problem, it is a coordination problem, in my opinion.”
Munshi said digital payments are getting more popular hence scaling does not seem to be the problem, it is the division of the pie which is more important. “One aspect on further scaling is the matter of trust. Trust on the corporates who run the system and the trust on the government which regulates it. We have a large population of persons, particularly of 50+ age group who still prefer the traditional methods,” he said.
To a question about the biggest payments security risk right now, he said cyber attacks and phishing in my view are the major threats. “People often fall prey to these and end up loosing millions.”
Maniar said the most significant risk today is socially engineered fraud amplified by AI and real-time settlement.
“Unlike traditional card fraud, modern payments fraud, exploits human trust rather than system vulnerabilities. The weakest point in digital payments is not technology, it is human decision-making under speed and pressure,” Maniar said.
In conclusion, financial analysts said digital payments, driven by real-time systems, digital wallets and contactless solutions, are reshaping economies by improving convenience, lowering transaction costs, and expanding financial inclusion. These systems reduce reliance on cash and physical banking infrastructure, enabling broader participation while enhancing transparency and accountability across financial ecosystems.
At the same time, digital transactions are helping governments curb the informal economy and reduce money laundering by increasing traceability. Greater visibility into financial flows allows regulators to detect illicit activity more effectively, encouraging wider adoption even in traditionally cash-reliant markets. However, trust in both service providers and regulatory systems remains critical to sustaining growth, particularly among older users.
Despite the benefits, experts warn that cybersecurity and fraud risks are intensifying. Real-time payments increase vulnerability to scams, social engineering and AI-driven fraud such as deepfakes and synthetic identities.
Financial experts stress that future resilience will depend on advanced safeguards including AI-driven monitoring, strong digital identity systems, encryption, and clearer regulatory frameworks. While digital wallets are enhancing user experience, they are seen as complementing rather than replacing banks, which continue to provide trust, stability and risk management.
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