Over half of UAE population uses digital wallets: survey – News
A new survey by leading Mena payment solutions provider, Checkout.com, reveals that security remains the most important factor for UAE residents when shopping online, with nearly 40% of respondents saying Trust digital wallets as much as banks.
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Do you have a digital wallet? should you have one? contactless payments, online shopping, the rise of e-commerce are some of the factors that have shaped the evolution of the digital wallet which offers multiple options to purchase goods and services facilitating lifestyle and improving consumer experience.
The digital wallet is a financial transaction application that runs on mobile devices. It securely stores your payment information and passwords. These apps let you pay when you shop using your device so you don’t have to carry your cards. According to Investopedia, you enter and store your credit card, debit card, or bank account information and can then use your device to pay for your purchases.
A new survey by leading payment solutions provider Mena, Checkout.com, has revealed that more than half of the population in the UAE are using digital wallets for the first time. The survey reveals that security remains the most important factor for UAE residents when shopping online, with nearly 40% of respondents trusting digital wallets as much as banks. Indeed, the future bodes well for digital wallets, with 48% of respondents believing that digital wallets could lead to a cashless society within a decade.
Mo Ali Yusuf, Regional Director for the MENAP region at Checkout.com, said, “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 is unstoppable. The results reveal an undeniable trend of digital wallets becoming the future of consumer payments. »
Mo Ali Yusuf, regional director for the MENAP region at Checkout.com.
The survey aimed to uncover the growth of digital wallet usage among UAE residents as online payments increase. The Checkout.com MENAP 2021 Payments Report found that around 83% of UAE residents would maintain or even increase their current level of e-commerce spending through 2022.
The survey of over 1,000 consumers in the UAE found that cash usage continues to decline, with only 20% of respondents saying they use COD (cash on delivery) for online purchases. That compares to 40% in 2020, according to Checkout.com’s MENAP 2021 report.
Growth in digital wallet usage among UAE residents was driven by ease of paying bills, with 58% of respondents ranking it as the number one item they use their digital wallet for making payments, followed by closely by groceries (55 percent). The report also reveals that 28% of UAE residents use wallets to send funds to friends and family, showing the popularity of peer-to-peer transactions over traditional bank-to-bank transfers. Digital wallets are also expected to disrupt the multi-billion dollar remittance market in the Gulf, with a third of UAE residents saying they use digital wallets to send funds abroad. The pandemic has put the spotlight on payments and digital payments in particular. Indeed, payments are now widely recognized as a key part of the consumer journey to purchase, and business leaders increasingly understand that payments have a role to play from “pre-purchase to post-purchase” ( especially in e-commerce channels).
“As the pandemic and its aftershocks take effect, cash will continue to be displaced – due to increased levels of e-commerce in certain categories where “cash was king” historically, such as groceries, and greater use of non-cash payment form factors within the brick-and-mortar (in-store) environment This increased use of non-cash in-store payments bodes well for contactless spending, both “Tap n Go” using its cards (credit, debit, etc.) and using mobile wallets Affordability will remain key for consumers, especially with the rising cost of living, which means the need for “credit” and “cash flow management” will remain a priority It is to be anticipated that credit card spending will make a comeback (it has been replaced by peak debit card spending of the pandemic) and that consumer adoption of BNPL will increase – both online and in-store (although I’m concerned that some of the existing subscale players could be squeezed out of the market as funding begins to dry up for businesses that don’t make money and don’t have a clear path to profitability),” said payments industry expert Arjun Singh.
“Contactless will continue to be a mega trend on multiple fronts – first, wallet adoptions will continue to grow, driven both by choice (a number of wallets will be in the mix) and by increased levels of awareness. among consumers (consumer over time become more comfortable with wallets), secondly, as retailers make the shopping experience more experiential, they will include contactless payments as part of the customer journey – to reduce the friction associated with payments and finally, we will see the adoption of biometrics for the time being another “form factor” of payments between consumers.”
Singh added, “From a retailer perspective, unified and experiential commerce will become a reality for the future, which will have exciting implications for their payment strategies. My advice to all retailers, traditional or digital, is to make payments a key part of their customer and go-to-market strategy. A number of platform-based players (retailers, delivery companies, etc.) will integrate financial services as part of their offering – launching their own wallets and potentially even launching BNPL in the near term. white label/co-branded will be two areas where we will see increased activity. Finally, we will see some exciting disruption and innovation in the B2B payments segment – the next wave of innovation in the region – it is badly needed and the disruption has already begun. Wallets will also play a role in this space.
The Checkout.com report found little difference in online shopping habits between men and women, demonstrating that digitization is appealing to all genders. However, there is a broader appeal for digital wallets among younger buyers. The results highlight that 16% of 18-24 year olds prefer digital wallets, compared to 9% among 25-34 year olds.
Dubai-based Richa Patil, Founder and Managing Director of MetaDecrypt -Blockchain Tech and Consulting, which is dedicated to the development, adoption and amplification of digital wallets, said: “The UAE will see huge demand for the development of digital wallets as cryptocurrency becomes accepted as a primary payment option. Digital assets will open up greater demand from the retail sector as consumers shop with varied payment options and as a result, this will see more innovative payment solutions.