Why the days of ‘cash is king’ are nearly over in the UAE

      Published on Friday, 26 July , 2019      892 Views     
Why the days of ‘cash is king’ are nearly over in the UAE

  • Dubai

Although it has taken longer than other parts of the world, the digital revolution in the UAE may finally be about to supersede the previous mantra that ‘cash is king’.

According to a recent study from the Federal Competitiveness and Statistics Authority, 90 percent of people in the UAE use digital banking, while the number of ATM users reached 100 percent.

The trend is showing no signs of abating, Samer Soliman, managing director, Middle East, Network International, who said digital payments are set to grow from $6.5 trillion in 2017 to $8.9trn in 2022.

“This will be further boosted by the growth of e-commerce, as card payments rise and cash-on-delivery gradually declines,” he said.

Cash-on-delivery represented 21 percent of e-commerce transactions in the UAE in 2017, over twice that of more developed geographies such as Europe, where cash-on-delivery represented only nine percent of e-commerce transactions. It’s a stark change from the year previously, when a Yallcompare survey found that 85 percent of UAE residents still preferred cash on delivery.

Shahebaz Khan, Visa general manager for the UAE, said: “Cash has been in circulation for millennia, so while it may take time to disappear completely, we are optimistic that it will eventually be displaced with consumers, businesses and governments increasingly demanding digital methods to pay and be paid.

“Some consumers may prefer to use cash for small purchases, while others might use cash in situations where they are purchasing something from a cash-only merchant (mostly small merchants who don’t accept card payments or have a POS machine).

“In e-commerce, though some consumers still opt for cash-on-delivery, our ‘Stay Secure’ survey found that 92 percent of them would still choose to pay by card if a mobile POS machine was available upon delivery.”

The millennial generation

The switch from cash to digital is being driven by the millennial generation, which accounts for almost 30 percent of the UAE population. And with smartphone penetration at 79 percent it is no surprise that digital payments are becoming more popular.

According to the aforementioned Stay Secure survey, from Visa, 93 percent of UAE consumers found card payments (both in-store and online) more convenient over cash.

Further, Visa statistics show that the UAE is now the leading country in the Middle East and Africa region when it comes to Visa contactless transactions.

Khan said: “Consumers are tapping their card or phone for a whole range of transactions, both big ticket, one-off purchases as well as low value, everyday purchases. In fact, according to Visa data, the average transaction on contactless is around AED100.”

Emirates NBD’s tablet banking initiative helps customers open an account or sign up for a personal loan, credit card or an investment product in a completely paperless manner.

Suvo Sarker, senior executive vice president, head of retail banking and wealth management, Emirates NBD, said: “Today 85 percent of our personal loans are opened fully digitally. Over two-thirds of all customer service requests are fulfilled digitally and straight-through.”

Category Dubai, Gulf News | 2019/07/26 latest update at 5:21 PM
Source : Arabian Business | Photocredit : Google
Comments Add comment

Gulf Media

Related Articles

The editorial staff of Saudi Arabia Today would like to give all of its readers from Gulf and Saudi Arabia and the whole world the opportunity to participate actively in the development of the website! If you have something interesting, fun, scandalous - just something worth to be seen from more people. Capture it and share it in the Saudi Arabia Today with a short text.

Do you have information you want to reach our readers?

Send article/s

You can subscribe to our Facebook, Twitter and Google pages or use our RSS feed channel to always read the most important news about Saudi Arabia, the Gulf and the world.

Sponsored Publications