More than half of all UAE residents now use digital wallets as online payments surge after the Covid-19 pandemic, according to a new survey.

There is broader appeal for digital wallets among younger shoppers. About 16% of 18-24 year olds prefer digital wallets, compared to 9% in the 25-34 age group, according to the survey by payment solutions provider Checkout.com, which polled 1,008 consumers in the UAE between May 19 and 24.

“With more and more people embracing the convenience of digital wallets, coupled with the assurance that their transactions are safe and secure, digitization of the payment system is unstoppable,” said Mo Yusuf, Regional Director for the Mena region and Pakistan at Checkout.com. .

The increased use of contactless mobile payments, driven by hygiene concerns around the use of cash during the pandemic, has led to increased use of digital wallets.

Consumer spending via digital wallets is expected to exceed $10 trillion in 2025, up from $5.5 billion in 2020, according to a 2021 report from UK-based Juniper Research.

A digital wallet stores users’ credit and/or debit card information and links it to a payment gateway to enable purchases at a point of sale.

Similar to credit cards, digital wallets only work with merchants who accept them as a form of payment.

About 48% of Checkout.com survey respondents said digital wallets could lead to a cashless society within a decade.

Cash usage continues to decline in the UAE, with only 20% of respondents saying they use the cash on delivery option for online purchases, according to the study.

Fifty-eight percent of UAE residents cited paying bills as the main reason for using digital wallets, followed by 55 percent who use them to pay for groceries and 28 percent who rely on them to send funds to friends and family, research showed.

Around 40% of respondents also said they trust digital wallets as much as banks, the survey found.

Updated: June 03, 2022, 03:30