Cash is still king in the Middle East. If you’re a resident anywhere in the GCC, chances are you dive into your wallet for loose change when buying a snack. You have notes ready when hailing a cab. You even have exact change when shopping for groceries.
But this is changing. Cashless transactions are growing rapidly, despite accounting for only 10% of all transactions in the region presently. Fear not, because they also bring several advantages with them. At Xpress Money, we’re preparing you for a cashless future by investigating the advantages of doing away with notes.
You can shop online:
This is a massive driver of cashless transactions – particularly among younger audiences. Global e-commerce sites have opened an entire world of choice for consumers in the region. The caveat is that you need a debit or credit card to make payment. While local e-commerce providers still offer cash on delivery, you’d ideally want to go cashless to take advantage of the full range of online shopping options available to you. And if you’re living in the UAE, and are one of the 35% of people in the country who shop online between one and five times a week, chances are you’ve already converted to the joys of cashless.
You’ll become part of a smart city movement:
Smart cities need smart ways of payment. There’s no point enabling mobile apps for government services if you want to stand in line with a bunch of notes in your hands.
The UAE government knows that cashless transactions are the foundation of a smart city. If you want to pay your utilities online, request government services through your phone, and settle your phone bills without going to a branch, you’re going to need to turn cashless. In Dubai, the Dubai Plan 2021 calls for smart government services. Nationwide in the UAE, the Vision 2021’s aim of a competitive knowledge economy is driving cashless transactions. The smart city movement has arrived – and it’s time to get on board.
You’re more secure:
Cashless transactions offer several benefits to companies and regulators. For one, they leave a digital trail that is very effective in combating money laundering. Moving away from physical cash reduces counterfeiting risks, and lowers the overheads of replacing damaged currency.
Cashless is safer for people too. You can’t replace a wallet full of cash if you lose it, but you can certainly call your bank to cancel your debit card, or lock your mobile phone remotely so your digital accounts are safe.
Pay from a single device:
Imagine turning your phone into a wallet. Well, Near Field Communication (NFC) technology means you can wave your smartphone at a scanner to pay instantly. In the UAE, brands like Samsung have already enabled NFC its Samsung Pay technology at Points of Sale, with Apple making moves to launch its own Apple Pay service later this year.
Nor are you restricted to your phone to make payments. Cashless technology means your ID card can serve as a payment mechanism. In the US, student registration cards double up as prepaid cards. And in the UAE, Sharjah and Abu Dhabi are both trailing ways to enable payments through the Emirates ID cards that all UAE nationals and expatriates must carry.
So, there you have it. Cashless is coming, and it’s best to get ready. Just follow Sweden’s lead, where cash was only used 2% of the time in 2015, and constitute just 0.5% of the worth of all transactions in the country by 2020.
Written by – Arundhoti Banerjee, Associate Vice President – Strategy & Digital, Xpress Money