Increased usage of digital payments, such as cards and mobile payments, could yield a net benefit of up to $2.2 billion annually to consumers, businesses, and government in Dubai, UAE according to Visa, the world leader in digital payments.
The study titled “Cashless Cities: Realizing the Benefits of Digital Payments” conducted by Roubini ThoughtLab and commissioned by Visa, also indicates that by 2032, cashless payments could increase Dubai’s employment by 1.1 per cent and generate over $27 billion in additional economic activity for the Emirate.
The Dubai findings of the global study were revealed in support of UAE Innovation Month, which was launched by Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to promote innovation through a series of initiatives by government and private sector organizations showcasing the most important innovative developments that contribute to the promotion of welfare among all members of society.
The study examines the economic impact of the use of digital payments in several global cities including Dubai. By reducing reliance on cash, the study estimates the immediate and long-term benefits for three main groups in Dubai:
• Consumers, who could save nearly $200 million, from both time savings while conducting banking, retail and transit transactions, as well as a reduction in cash-related fraud;
• Businesses, which could achieve up to $1.5 billion from time savings while processing incoming and outgoing payments, and increased sales revenues stemming from extended online and in-store customer bases; and
• Governments, which could save nearly $500 million from factors including increased economic growth, and cost savings from administrative efficiencies.
The study quantifies the potential net benefits experienced by 100 cities across the globe, as they seek to significantly increase the use of digital payments over physical money. The study does not look at eliminating cash; rather, it examines the benefits experienced when a city moves to an “achievable level of cashlessness” - defined as the entire population of a city moving to digital payment usage equivalent to the top 10 per cent of its users today.
Shahebaz Khan, Visa’s country manager, UAE, said: “Dubai currently stands at the threshold of becoming a digitally advanced city, and with the government driving the Smart City agenda in both the public and private spheres, we can expect the transition to happen sooner rather than later.
“The benefits that a cashless society would bring to its economy are significant and, as a global leader in smart payments, Visa stands well positioned to enable the circulation and adoption of smart money, innovating with the government, banks, merchants and consumers alike, to achieve that transformation.”
The study offers over 60 recommendations for all ecosystem participants, including policymakers, to help their cities become more efficient through greater adoption of digital payments. These include undertaking financial literacy programs to help move the unbanked into the banking system, implementing incentives to stimulate innovation focused on scaling new payment technologies, and introducing secure open-loop payment systems across all transportation networks.
“The Dubai government, under the leadership of Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has always been forward-looking and embraces the benefits of digital payments as it continues to push for a cashless reality,” said Majeed Hujair, senior director, School of Public Policy for Central and Eastern Europe, Middle East and Africa (CEMEA), Visa.
“Our study quantifies the potential that cashless payments bring to Dubai, and we continue to innovate and work as a strategic partner of the government to help realize its smart city ambitions.”
The results were revealed on the seventh day of UAE Innovation Month at the Visa Innovation Center in Dubai, one of the world’s five state-of-the-art Visa Innovation Centers. The 4,000-sq-ft facility serves as an innovation hub for the CEMEA region, where Visa collaborates with public and private entities to design, build and implement the latest innovations in payments technologies.