UAE consumers go cashless as trust in digital payments surges

Dubai - 71% consumers reported increased use of digital payments when shopping in-store, one in two consumers shop more online.

Some game-changing shifts on payment behaviour in the UAE since the Covid-19 outbreak are expected to be the "new normal" as more consumers gain confidence in digital payments, according to the findings of a survey.

The survey released by Dubai Police, Dubai Economy, and digital payments platform Visa said while 71 per cent of consumers reported increased use of digital payments when shopping in-store, one in two consumers (49 per cent) shop more online with 61 per cent of them using cards and digital wallets to pay instead of 'cash on delivery' (COD) in the wake of the pandemic.

The survey, which also looks at consumers' general views, preferences and concerns related to digital payments, found that 68 per cent of respondents have reduced shopping in-store since the outbreak of the pandemic. "When they do shop at stores, 71 per cent are using digital payments over cash with the majority using contactless cards (54 per cent) and mobile wallets (46 per cent) more."

Forty-three per cent of consumers surveyed believe they will continue to use contactless payments in-store post the pandemic and 48 per cent said they will continue to opt more for paying online with card or digital wallet over COD.

A similar study by Mastercard in April showed that UAE consumers are increasingly looking for ways to avoid coming in contact with cash for fear of contracting coronavirus. As per the study, the number of contactless transactions in the UAE, as a proportion of all face-to-face card payments, was over 100 per cent higher in March 2020 than in the same 2019 month. Contactless transactions also went up four times as fast as non-contactless transactions in the grocery and pharmacy categories.

Brigadier Jamal Salem Al Jalaf, director of Criminal Investigation Department in Dubai Police, said combatting cybercrime by raising awareness and vigilance among UAE residents is a unified goal across all our government entities. Fraudsters are seeking to take advantage of people spending more time online, preying on their fears and anxieties, and exploiting new systems of remote working. Government authorities, private sector, and the local community all have an important part to play to ensure we are all protected."

Mohammed Ali Rashed Lootah, CEO of Commercial Compliance & Consumer Protection (CCCP) sector, Dubai Economy, said 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.

Neil Fernandes, Visa's head of Risk for Middle East and North Africa, said the pandemic has changed how consumers shop and pay with increased reliance on and preference for digital commerce. "With increased usage both among experienced and first-time users, cybercriminals too are keen to capitalize on the increased activity and vulnerability, especially of first-time online shoppers."

The Visa survey has found that more than half (58 per cent) of consumers have abandoned their online shopping cart because of authentication delays or failure. Of those who abandoned their carts, 62 per cent try again after some time, 35 per cent purchased from other sites, 34 per cent purchased from a nearby store, and 32 per cent dropped the idea of purchasing the product altogether. For 66 per cent of respondents, an authentication process that doesn't require them to enter one-time-passcode (OTP) for standard and recurrent transactions would be more convenient; 65 per cent would trust.

issacjohn@khaleejtimes.com