A new survey by leading Mena payments solutions provider, Checkout.com, reveals that security remains the most important factor for UAE residents when shopping online — with nearly 40 per cent of respondents trusting digital wallets as much as banks.
Do you have a digital wallet? should you have one? contactless payments, online shopping, surge in ecommerce are some of the factors that have shaped evolving of digitial wallet which gives multiple options to buy goods and services easing life-style and enhancing consumer experience.
Digital wallet is a financial transaction application that runs on mobile devices. It securely stores your payment information and passwords. These applications allow you to pay when you’re shopping using your device so that you don’t need to carry your cards around. You enter and store your credit card, debit card, or bank account information and can then use your device to pay for purchases, according to Investopedia.
A new survey by leading Mena payments solutions provider, Checkout.com, has found over half of the UAE population 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 per cent of respondents trusting digital wallets as much as banks. Indeed, the future bodes well for digital wallets, with 48 per cent of respondents believing that digital wallets could lead to a cashless society in a decade.
Mo Ali Yusuf, Regional Manager for MENAP at Checkout.com, said,
“With more and more people embracing the convenience of digital wallets coupled with the reassurance of their transactions being safe and secure, digitisation of the payment system is unstoppable. The findings reveal an undeniable trend towards digital wallets becoming the future of consumer payments.”
The survey sought to discover the growth in digital wallet usage among UAE residents as online payments surge. The Checkout.com MENAP Payments Report of 2021 revealed that approximately 83 per cent of UAE residents would maintain or even increase their current level of eCommerce spending into 2022.
The pulse survey of over 1,000 UAE consumers found cash usage continues to decline, with only 20 per cent of respondents saying they use COD (cash-on-delivery) for online purchases. This compares to 40 per cent in 2020, according to Checkout.com’s 2021 MENAP report.
The growth of digital wallet usage by UAE residents has been spurred by the ease of paying bills, with 58 per cent of respondents ranking this as the number one item they use their digital wallet for to make payments, with groceries a close second (55 per cent). The report also reveals that 28 per cent 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 also stand to shake up the multibillion-dollar remittance market in the Gulf, with a third of UAE residents stating they are using digital wallets to send funds overseas. The pandemic has put a spotlight on payments and on digital payments in particular. Indeed, payments are now widely recognised as a key part of the consumer shopping journey and increasingly business leadership understands that payments have a role to play from ‘Pre Purchase to post-purchase’ (especially in the ecommerce channels).
“With the pandemic and its aftershocks taking effect cash will continue to be displaced. I believe that affordability will continue to remain key, especially with rising cost of living, meaning that the need for credit and managing cash flow will remain top of mind. I anticipate credit card spends to make a comeback (they were displaced by debit spends during the height of the pandemic) and BNPL will grow their share of spends (although some of the players might be squeezed out of the market as VC funding starts to dry up for business who are not making money and don’t have a clear path to profitability. Contactless will continue as a mega trend as wallet adoptions grows and biometrics increasingly become a form factor among consumers,”
said Arjun Singh, payments industry expert.
“From a retailers perspective, unified commerce will start to become a reality which will have some interesting implications for payments. A number of platforms based players will launch their own wallets and potentially even consider white labeling BNPL. Finally, the B2B payments is were the next wave of innovation will happen. It’s much needed and has started.”
The Checkout.com report revealed little difference in online shopping habits between men and women, demonstrating digitisation has appeal across genders. However, there is a broader appeal for digital wallets amongst younger shoppers.
The findings highlight that 16 per cent of 18-24 year-olds prefer digital wallets compared to 9 per cent amongst the 25-34 age group.
Dubai-based Richa Patil, Founder and CEO of MetaDecrypt -Blockchain Tech and Consulting firm, which is into developing, adoption and amplification of digital wallets, said:
“The UAE will see huge demand for development of digital wallets as the cryptocurrency gets accepted as main stream payment option. The digital assets will pave more demand from retail sector as consumers buy with varied payment options and hence this will see more innovative payments solutions.”
News Source: Khaleej Times
