Fear of contagion expedites UAE into a cash-less economy

By Rahul Vaimal, Associate Editor
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The rising fear in handling cash in the light of pandemic is expected to shoot up the global contactless transactions to $8.26 trillion within four years from $4.4 trillion in 2020.

As COVID-19 has created a phobia in people to handle cash, businesses are launching different innovative technologies to trigger digital payment numbers.

As per a German statistics portal, Statista, $2.29 trillion transactions will be conducted through digital commerce with transactions worth $1.47 trillion taking place in the mobile point-of-sale (POS) payment method this year.

By 2024, the value of sale via digital commerce will exceed $4.11 trillion and the mobile POS transactions will be at $4.15 trillion.

As per the famous financial service company Visa’s ‘Back to Business’ study, 92 percent of UAE businesses are either shifting to online or increasing their online activities, when considering the global scenario it’s only 74 percent.

The study also reveals that almost 72 percent of the UAE consumers won’t be shopping from those places which only offer a payment method that requires contact with cashiers or machines that are shared and 90 percent of surveyed consumers have made changes in their payment mode due to COVID-19.

Visa’s head of Marketing for MENA, Kalika Tripathi says “more than 90 percent of the UAE consumers say they would switch to a new store that accepts contactless payments, compared to 63 percent globally.”

In the present condition, the consumers are bothered that cash handling can be a source of transmitting and spreading the coronavirus. This fear is even more emphasized when many shops and supermarkets refuse to take cash payments.

Analysts point out that this new change in consumer behavior has brought confidence in them to make digital transactions compared and now it is expected to be the “new normal”.

The Dubai Police, Dubai Economy and Visa have conducted research that shows, 43 percent of UAE consumers plan to continue contactless payments in stores and 48 percent will use online payments with cards or digital wallets.

A recent survey by Mastercard indicates people have avoided handling ‘dirty cash’ and have seen a 60 percent worldwide decline in ATM transactions since lockdown.