KHALEEJ TIMES, Saturday, Sep 12, 2020 | Muharram 24, 1442
UAE makes the switch to digital payments
Emirates:
Cash is set to take a tumble from its long-held position as the most
preferred mode of payment in the UAE, with digital payments witnessing a
steady surge in popularity amongst shoppers, industry leaders said at the
DigiPay 2020: The Future of Digital Payments Summit.
Presented by Khaleej Times, the event brought together experts from various
fields to highlight the changing nature of consumer preferences and their
payments options.
Ali Allawala, head of Retail Islamic Banking (Saadiq) at Standard Chartered
Bank, noted that the need for consumers to carry physical cash has been steadily
declining over the past few years.
"The need to carry cash is going down, because a lot of transactions in certain
sectors don't require physical cash anymore," he said. "For example, if you book
a stay at a hotel, or buy an airline ticket, then chances are that you are
paying online with your debit or credit card. To meet the need for these types
of payments and transactions, many banks are issuing multi-currency cards. You
go out to vacation in Singapore and you pay with your card and it deducts the
amount in the local currency."
Similarly, Dr. Tamer Eltoni, chief commercial officer of Digital Finance
Services at Etisalat, said that "the world is changing, and customer behavior is
changing."
People, he said, prefer to use digital wallets over physical cash. "Customers
want flexibility on different forms of digital payments. The UAE is blessed with
amazing infrastructure, and there is still lots of opportunity for digital
payments."
Sanjay Malhotra, chief digital officer at Dubai Islamic Bank, noted that the
Covid-19 pandemic has accelerated the adoption of digital payments.
"Covid-19 has forced certain trends," he said. "Our research has shown that 58
per cent of consumers said that they would prefer digital payments. Tech like AI
will come along and help with the evolution in the industry. Becoming more
efficient with payments serves everyone, both the banks and the consumers. If
you look at remittances, right now, roughly, 10 per cent of the remittances is
the cost of the transfer. And this is extremely high, you need to become more
efficient so that you can bring down the cost."
Banking, he said, should be as simple as using Facebook or a Google search.
"Simplify the front end and make using digital services easy. We might say that
customers are not used to technology or they are not educated in it which is why
they are at the bank branches, but that is simply not true. Everybody uses
technology and the reason they are there is because they haven't been able to
use the tech to solve their problem."
Mosam Gadia, senior vice president - Payments, at noon.com, noted that the use
of cash globally is going to see a decline especially in the B2C sector. "It
won't be completely eliminated, but it will see a massively decline. Handling
cash transactions are more expensive versus digital transactions. The benefits
have to be passed on to the consumer. Build trust and ensure that the consumers
have a choice in how they can pay. More work has to be done in customer
awareness and education to ensure that they are aware about what is available to
them."
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