Payment practices report

June 2020

Survey results for United Arab Emirates

The Payment Practices Barometer is a survey of business-to-business payments behaviour. The UAE survey was completed by businesses during March 2020.

After reporting its first cases of coronavirus in late January, the UAE saw an escalation of the contagion and the application of containment measures aimed at limiting the spread of the virus.

Schuyler D’Souza,

Managing Director Middle East commented on the report

It is still very premature to predict the impact of the coronavirus pandemic on the economy of the United Arab Emirates. This is because the full extent of the impact is still to unfold. However, like all economies around the world, the UAE is dealing with an unprecedented disruption of business activity and tourism.

This is especially true of the trade exchanges in which the UAE plays a central role at a global level. Moreover, the pandemic has come at a time of weak economic growth following the collapse in oil prices. All this has contributed to cloud the economic outlook for the UAE, placing a heavy strain on the domestic business environment.


Like all economies around the world, the UAE faces the disruptive impact that the pandemic has had on trade, tourism and business activity in the country, compounding years of weak growth following the collapse in oil prices

Despite the current measures planned to prop up the economy during the coronavirus pandemic, businesses interviewed for this survey felt pessimistic about their future and about the trends in their B2B customers’ payment practices over the coming months.

Key takeaways from the report

More credit-based B2B transactions were recorded in the UAE than anywhere else in Asia, according to the results of our survey, with a majority associated with domestic as opposed to international B2B trade. For many of the businesses surveyed, this pointed to an example of short-term financing sought by their customers to support their own cash flow.

Regardless of the reasons for the widespread use of B2B credit, it is important to note that a significant amount of business capital is tied up in account receivables. Whilst it is a way to establish and strengthen B2B relationships, companies are also exposed to the risk of payment delays or non-payment.

Bank guarantees and letters of credit are frequently used by businesses in the United Arab Emirates to mitigate the risk of non-payment. However, with an anticipation of worsening payment practices including an increased risk of payment default, businesses in the UAE might benefit from further enhancing their credit management processes. This could include a regular and structured approach to pre-credit checks, regular monitoring of buyer’s risks and outsourcing invoice collection to a professional agency.

Download the report

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