Mobile wallet: Be cashless, embrace convenience

The UAE is rapidly moving towards transforming the country into a cashless society by promoting digitalisation of payment systems. The government's thrust to develop smart knowledge economy under the UAE Vision 2021 is not only creating demand for digital payment services, but also driving innovation in the digital payment ecosystem.

Another factor that is of great significance for the growth of cashless transactions in the country is the fact that UAE is amongst the countries with the highest mobile and internet penetration. With 74 per cent of the total mobile subscribers being smartphone users, the channel platform for digital payments is massive in the country, catalysing the growth of the cashless payments. Moreover, smartphone brands like Samsung and Apple are also driving cashless near field communication (NFC) technologies by enabling Samsung Pay and Apple Pay.

In March 2020, many countries in the Middle East imposed necessary restrictions on social distancing, a significant majority of consumers turned to contactless payments for necessary purchases. Seventy per cent of respondents in the Middle East say that they are now using contactless payments, citing safety and hygiene as key drivers.
Running to the store for groceries, medicine and other necessities has changed dramatically. Shoppers around the world have had to adjust to social distancing measures and other new challenges when buying everyday supplies for their families and loved ones. This shift in consumer behaviour is particularly clear at checkout, as people express a desire for contactless and voice concerns over cleanliness and safety at the point of sale, according to a new Mastercard study.
Cashless post-Covid?

It's not clear if Covid-19 could latch onto currency the same way it is able to survive on other surfaces, such as doorknobs and handrails, but many aren't taking chances. Cash is notorious for harbouring pathogens such as E. coli, so the fears are not completely unsubstantiated. And contactless and digital payment methods certainly require less physical interaction and are more secure.

The banking sector of the UAE has extended its support towards cashless spending through its app, Emirates Digital Wallet, enabling even the unbanked population to store, spend and transfer money digitally. Moreover, a new structure related to digital payments has also been introduced by the UAE Central Bank that clearly defines the roles of various parties involved in the digital payment ecosystem and their licensing regimes. The UAE demography with a majority of young tech-savvy population and the country, being the home to eight million migrant workers mostly involved in blue-collar jobs, also increases the demand for digital payment platforms.

This is the reason why PayBy, an innovative fintech company, officially launched its fast and secure mobile payment services in the UAE recently. With PayBy, consumers can use their smartphones to make contactless and cashless payments in stores and online. The payment solution also allows users to pay for deliveries on arrival, order goods and services online, transfer and receive money instantly, and even share cash gifts with family and friends - all in just a few clicks.

According to PayBy, "While the UAE is making brisk strides towards a cashless society, the social distancing economy has catalysed the growth of contactless payment solutions. PayBy, a UAE fintech company, promises a highly efficient and secure payment solution to support UAE retail businesses and has bigger ambitions. Moving away from cash-based transactions offers greater safety, convenience and efficiency for consumers and businesses, and supports the UAE government's efforts towards increased financial transparency and inclusion in the economy."
Smart payment is a smart choice

The future of money is in your mobile and not your pockets. Smart payments are easy, convenient and quick. Gone are the days where you have to wait in line for the cashier to transfer or exchange money. The UAE consumers are increasingly looking for ways to avoid coming in contact with cash or even the store clerk at the checkout counter for fear of contracting coronavirus, the Mastercard research showed.

A 2019 Visa study showed that after activation, contactless payments in the UAE increased transactions by 56 per cent and mobile wallets (e.g. Apple Pay/Google Pay/Samsung Pay) increased transactions by 150 per cent. In the UAE, "smartphone penetration levels and consumer openness to change are fueling the demand for a better alternative to cash," as stated in the report.

Mobile payment services in the UAE have recorded strong growth in recent years, supported by policy reforms and innovation from key players and contactless payments have posted strong growth in UAE, accounting for about 10-13 per cent of total payments of key players.

Mobile proximity payment has posted strong growth, a trend expected to continue over medium term. This is driven by cash discounts, increased penetration of smartphones, and increased rate of innovation. The development of the ecosystem for facilitating digital payments will open up the way for the growth of various contactless payment services.

Mobile wallets allow the user to send, receive, and store money all in one place: their smartphone. A user can connect their bank account to the wallet to add and store money. The user can also send money to any individual by entering certain information. QR codes are also used in the process of cashless payments; users are required to scan the QR code of the retailer to complete the transaction.

As people start to embrace these hygienic practices, contactless payments, as a preferred mode of payment, will see an upward trend in the years to come.