The Covid-19 pandemic has accelerated the UAE’s transition to a cashless society by increasing people’s trust in digital transactions and online banking, but still 63 per cent of the people in the country remain either unbanked or under-banked, a senior Dubai Economy official said on Tuesday.
Mohammed Shael Al Saadi, CEO of the Corporate Strategic Affairs sector in Dubai Economy, said that the recently launched Unified Payments Network (UPN) seeks to offer an inclusive platform that will bring together all payment service providers, and unbanked as well as under-banked merchants, to facilitate cashless transactions. “A cashless ecosystem will be a key driver of UAE’s growth.”
Speaking at the ninth Dubai Economy Market Dialogue session, Al Saadi said that the UAE, which is currently ranked 20th in the world in digital payments, needs to be proactive as many economies are in the race now. “Unless we act now, the UAE will slip by two three ranks in the digital transition race.”
Since over 99 per cent of businesses in the UAE are micro SMEs, the affordable and seamless platform offered by UPN will seek to accelerate financial inclusion rate in the country, Al Saadi.
He said that a key positive aspect of the pandemic is that it has accelerated the nation’s digital transformation. “People’s trust in digital transactions and online has significantly increased during the period.”
All the digital and cashless initiatives underway are aimed at enhancing the competitiveness of Dubai and UAE in the digital transformation race globally. “The UPN platform will help achieve the secure and seamless transition of Dubai towards a cashless society in line with the vision of the government and the strategic plans of the Cashless Dubai Working Group constituted recently,” he said.
Al Saadi also said that the digital infrastructure in the UAE is world-class, enabling a faster transition to a full cashless ecosystem. “In the UAE, 83 per cent people currently have mobile access while our Internet connectivity rate is 99.3 per cent,” Al Saadi pointed out.
He said that the Dubai Economy would seek to accelerate financial inclusion rate in the UAE by empowering local wallets to onboard and encouraging every payment service provider to be part of the network, contributing towards the goal of the UAE to be among the top 10 cashless economies in the world.
As per a recent Visa-DED security survey that examined consumer perception of digital payments and online shopping, 66 per cent of respondents said they trust online shopping and 70 per cent trust online payments.
Al Saadi said that in a cashless ecosystem, the possibilities for merchants, financial institutions and consumers are enormous. “It is vital, therefore, to build consumers’ trust and improve the infrastructure of online payments so that consumers can benefit from more seamless, rewarding and secure shopping experiences.”
A recent poll by Standard Chartered found that 73 per cent of the UAE’s respondents believe Covid-19 has made them more positive about online shopping. However, prior to the pandemic, 72 per cent of consumers preferred to shop in-person versus less than a third online.
Almost half (47 per cent) of UAE respondents said they also prefer making online payments now rather than using in-person cards or cash payments, according to the survey.
According to analysts, proactive government policies have been crucial in building a digital culture in the UAE and eliminating many of the barriers to becoming a cashless society. Digital commerce and cashless payments were identified as top government priorities in UAE Vision 2021. The government has implemented a number of initiatives to support it, such as the wage protection system.
Recently, the Dubai Government launched the Dubai Cashless Framework Report, developed by Smart Dubai and the Dubai Department of Finance, to enable all transactions in the emirates to be made through easy-to-use, cashless platforms across sectors.
According to a research by Visa, UAE residents also are among the top 10 globally when it comes to spending time on the internet and social media, averaging seven hours and 54 minutes daily. “With the world becoming more connected and consumers’ trust on online shopping evolving, we believe that consumer spend via online retail platforms will see significant growth in the coming years.”
A deep penetration of smartphones is the baseline for mobile wallet adoption, and this has been a reality for years in UAE, said the Visa report.
Source: https://www.khaleejtimes.com/business/local/pandemic-speeds-up-uaes-transition-to-cashless-ecosystem