KHALEEJ TIMES, Monday, Sep 14, 2020 | Muharram 26, 1442
UAE economic recovery linked to growth in digital payments
Emirates:
The Covid-19 pandemic has resulted in a unique ecosystem where the growth
in digital payments and financial services will be a key contributor to the
UAE's economic recovery, experts said at the DigiPay 2020: The Future of
Digital Payments Summit.
Presented by Khaleej Times, the webinar brought together several experts and
industry leaders to highlight the current challenges and opportunities in the
digital payments sector. The virtual platform is also designed to help
organisations looking at building or upgrading their payment infrastructure to
better serve the needs of today's consumers.
In his opening address, Shahebaz Khan, general manager - UAE, Visa, described
the Covid-19 pandemic as "unprecedented", but noted that digitization and the
economic recovery of the UAE go "hand in hand."
"Small and medium businesses have been some of the worst hit during this
pandemic," he said. "Even businesses that had an active disaster prevention
protocol and strategy could not cope completely with the challenges that this
pandemic created. We saw that 80 per cent of SMEs in the UAE have had their
revenues negatively impacted. Our Visa Impact Tracker also showed that most
consumers have reduced their spending, and this has led to an 86 per cent fall
in consumer shopping frequency."
Khan also spoke about how consumer behavior has changed with shopped taking to
online sites that promise contactless payments and deliveries.
"Buying online has significantly increased, as have contactless payments," he
said. "We expect this to continue and define the new reality. Right now, the
focus is on how to help small businesses get online quickly."
He explained that 92 per cent of merchants in the UAE still have concerns about
shifting their businesses online, compared to over 40 per cent worldwide. As a
result of the pandemic, 50 per cent of cash only merchants have been impacted.
"We see a unique opportunity to propel digital payments in the region," Khan
said. "However, there are challenges. We have to make e-commerce transactions
more secure and frictionless. Research shows that 58 per cent of shoppers have
abandoned their carts due to a delay in payments or due to a bad online
experience. This is something that we can't afford as online grocery orders have
been booming.
Similarly, Ambareen Musa, CEO of Souqalmal.com, noted that the trends have
completely changed when it comes to digital payments.
"Trust is a big element," she stressed. "Building trust in the finance sector is
going to be key. Amazon and noon have done amazing in building trust and
encouraging online payments. But, there is still a large population that pays
cash on delivery. We have seen that when people are forced to do something
because there is no other option open to them, then they will do it eventually."
This, she said, has been true not only for online payments, but also for people
buying insurance online. "Our research showed that 65 per cent of consumers
looked into getting insurance for the first time online during the pandemic, and
they said that they intend to continue getting it online in the future."
Frederic de Melker, managing director of Personal Banking at RAKBANK, also
highlighted the latest in fintech that is providing consumers with better
experiences.
"Fintech in the region currently is struggling with reach, while banks struggle
with relevance," he stated. "If you are capable of merging both, then you hit the road for the future. Many times, you have to convince businesses that
digital payments is the way forward. Look at the problems that you are dealing
with, figure out relevance, and build your reach. Everybody with reach has a
part to play in this new ecosystem. However, human interface is also important,
because it is frustrating not being able to communicate if you run into a
problem."
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