Covid 19: Cash is dirty’, more people prefer digital payments
Over 90% of UAE consumers say they would switch to new store that accepts contactless payments, compared to 63% globally
Mounting phobia in handling "dirty cash" will be spurring global contactless transactions to a dizzying $8.26 trillion in four years from $4.4 trillion in 2020 as more businesses deploy innovative technologies to encourage digital payments.
According to research by Statista, of this $2.92 trillion are in digital commerce and $1.47 trillion worth of transactions will take place in the mobile point-of-sale (POS) payment channels this year.
In 2024, the value of digital commerce sales will exceed $4.11 trillion while mobile POS payment will jump to $4.15 trillion, said Statista.
According to Visa's Back to Business study, 92 per cent of the businesses surveyed in the UAE are shifting their business online or increasing its online presence, compared to 74 per cent globally.
"More than 90 per cent of the UAE consumers say they would switch to a new store that accepted contactless payments, compared to 63 per cent globally," Kalika Tripathi, Visa's head of marketing for the Mena, said at a webinar.
In fact, almost three in four or 72 per cent of UAE consumers surveyed wouldn't shop at a store that only offers payment methods that require contact with a cashier or other shared device, compared to 48 per cent globally. More than 90 per cent of UAE consumers surveyed have made changes to the way they pay for items due to Covid-19, primarily shopping only online when possible (59 per cent), using contactless payment (52 per cent) and not using cash as much (40 per cent), compared to 78 per cent globally.
A recent Mastercard survey on the implications of the coronavirus pandemic, shows that 82 per cent of respondents worldwide now view contactless as the cleaner way to pay, and 74 per cent state they will continue to use contactless payment post-pandemic. Some even avoided withdrawing or handling potentially "dirty" cash altogether, with ATM transactions down by over 60 per cent since lockdown began.
Today, consumers are fearful due to concerns that cash handling is dirty and maybe another way the coronavirus can be transmitted and spread. The retail industry has accentuated this hysteria with many shops and supermarkets refusing to accept cash payments, offering card transactions only, according to analysts.
They suggest that shifts in consumer behaviour caused by the pandemic are expected to be the "new normal" as "more consumers gain confidence in digital payments".
According to a study by Dubai Police, Dubai Economy and Visa, some 43 per cent of consumers in the UAE will continue using contactless payments more in stores and 48 per cent will increase their use of online payments with cards or digital wallets for future e-commerce purchases,
"The study shows that consumer behaviour changes due to the pandemic - such as shifting online and increasing use of digital payments, are likely to continue even after the pandemic - an important take-away for businesses developing strategies for the post-Covid-19 consumer and market overall," Mohammed Ali Rashed Lootah, chief executive of the Commercial Compliance and Consumer Protection sector at Dubai Economy, said.
Across the world, Covid-19 is spurring faster adoption of digital payments and this structural shift will accelerate when the economy begins to recover, according to consultancy Bain & Company. By 2025, it estimates that the adoption of digital payments could accelerate by five to 10 percentage points.
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