Special: UAE makes the switch to digital payments
Technology such as artificial intelligence help with the evolution in the industry, experts said.
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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