The United Arab Emirates (UAE) aims to transition into a nearly cashless economy; however, the reliance on traditional rent payment methods is hindering this effort. Rent, which is one of the largest personal expenses in the country, remains predominantly tied to paper transactions and cheques.

Recent research from Visa indicates that the percentage of rent transactions conducted in cash or via cheque has decreased from 23 percent last year to approximately 16 percent currently. Despite this decline, in Dubai’s AED90 billion ($25 billion) rental market, this still translates to over AED14 billion being processed outside the digital ecosystem.

Dr. Saeeda Jaffar, Visa’s senior vice president and group country manager for the GCC, noted that a significant volume of cheques and cash continues to be utilized for rent payments. In the first four months of 2024 alone, the UAE Central Bank processed more than seven million cheques, amounting to AED422 billion, which is nearly four times the total value processed through the country’s digital direct debit system last year, which stood at about AED107 billion for utilities, loans, insurance, and rent.

Real estate agents suggest that the actual use of cheques for rent payments might be even higher than Visa’s estimates, particularly in the residential market where digital adoption has lagged. Sidharth Kumar, sales manager at Forest Hills Real Estate, mentioned that while some younger landlords accept bank transfers, most still prefer the security of post-dated cheques. This preference stems from the potential risks associated with bounced cheques, which can lead to complications for tenants with their banks.

Godfrey Sullivan, Visa’s acting head of products for Central and Eastern Europe, Middle East, and Africa, explained that landlords favor cheques due to the perceived certainty of payment. He stated that they prefer having something tangible rather than relying on the hope of receiving payment at the month’s end.

The shift towards fewer cheques is evident, as a 2025 report by real estate agency Betterhomes highlighted an increase in one- and two-cheque contracts, driven by landlords demanding upfront payments and tenants competing for limited inventory. In fact, one-cheque agreements accounted for 33 percent of new tenancies in Dubai last year.

Although digital payment options exist, such as the UAE’s direct debit system allowing automatic rent payments, their adoption remains limited. The Dubai Cashless Strategy, initiated in October, aspires to digitize 90 percent of transactions in the city by 2026, aiming to enhance economic growth by more than AED 8 billion.

On a broader scale, the UAE Digital Economy Strategy seeks to double the digital economy’s contribution to GDP from around 10 percent to 20 percent within this decade. While global financial technology companies have made strides in addressing these issues, local players are beginning to emerge to fill the gap. Visa’s Jaffar acknowledged that while progress is being made, it has not yet become widespread in the market.

Among these local initiatives is Keyper, a proptech startup based in the UAE that has raised over $40 million to introduce a “Rent Now, Pay Later” product. This service allows tenants to pay rent in monthly installments while ensuring landlords receive the full annual amount upfront. Jaffar concluded by emphasizing that the market’s friction points would stimulate innovation and drive movement towards a more cashless system in the UAE.