UAE leading the shift away from cash [Gulf News (United Arab Emirates)]
(Gulf News (United Arab Emirates) Via Acquire Media NewsEdge) Dubai: Consumer education and government initiatives will further spur the adoption of cashless payment solutions in the Middle East region, industry experts told Gulf News.
The region remains a cash-based society with only about 10 per cent of payments made electronically. This is mainly because many consumers are not aware of the benefits of cashless payments and they don't trust the security of online transactions.
However, Raghu Malhotra, division president for Middle East and North Africa at MasterCard, said the trend is fast changing, especially in the UAE.
"Consumer education holds the key to an increase in the adoption of electronic payment solutions," he told Gulf News.
MasterCard's recent â€˜Cashless Journey' study indicated that in the Middle East, the UAE is moving fastest away from cash. The study, which looked into how 33 countries are close to becoming cashless markets, found that non-cash transactions in the country account for 26 per cent of consumers payments by value, compared to 19 per cent in Saudi Arabia and 7 per cent in Egypt.
Analysts said the introduction of new technologies, especially those backed by the government, is another factor that is spurring the shift from cash to cashless.
The government in the UAE, as well as Saudi Arabia, has taken e-payments initiatives to support the country's social and economic goals.
The UAE Ministry of Labour's Wages Protection System has made it possible for labourers to get their salaries via a prepaid card or a bank account while the UAE Banks Federation recently announced a project called Mobile Wallet as part of the country's Smart Government initiative.
More innovative products are also expected to be rolled out in the UAE over the near term, with a number of them set to be unveiled at the Cards and Payments Middle East summit in Dubai this week.
"Electronic payment adoption in the UAE will rise with large-scale deployment of mobile payment solutions and the deployment of multi-application banking cards. There are undoubtedly a number of initiatives underway that will put real momentum behind the mobile payment revolution," said Christelle Toureille, marketing director for telecom and banking, Middle East and Africa at Gemalto.
"Mobile money and contactless payments are getting great momentum in the region, especially in the UAE. Banks and mobile operators are seriously looking into it, but large nationwide deployment has not occurred as yet," she added.
Toureille predicted that in a few years, when mobile contactless payments will be widely used, people will no longer take out cash to pay for a can of coke from a vending machine. "They will just tap their handset on the vending machine reader for the transaction to be made. For more expensive purchases, they might use their banking cards and, to give money to a relative or pay for their bills, they might use their mobile money transfer solution on their handset."
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