Consumers in the UAE are increasingly changing their payment methods to non-cash. People use plastic cards making payments for everything: from daily purchases, eating in a restaurant and bills for utilities to expensive goods.
Euromonitor International informed that in 2017 consumers in the UAE paid 216 billion dirhams for goods and services with the help of credit, debit and prepaid cards. The study showed that 45% of all trade transactions in retail stores were carried out using plastic cards – this is more than using any other payment facility.
By 2020, plastic cards will prevail over cash and they will account for slightly more than 50% of transactions. Over the years, cash has been the prevailing way of paying retail purchases to the UAE. But as recent data show, trends are changing.
During 2017, the number of payment transactions with plastic cards increased by 7%, and the number of transactions with cash decreased by 3%. In the coming years analysts expect a serious decrease in the number of cash transactions: from 32% in 2017, their share will drop to 26% by 2022.
One of the reasons why people increasingly prefer cards is the convenience of using this payment facility. When paying by card or by means of electronic payment services, buyers do not need to carry paper piles of pouches in their wallets. However, experts believe that the convenience of non-cash settlements is not only in this. The study, conducted by Visa, proved that consumers, companies and governments will have long-term advantages if people stop using cash.
One of their advantages is the reduction of time spent on banking procedures, as well as transactions in stores. Also, the probability of crimes related to cash is reduced. The annual direct net benefits of consumers in 100 cities are estimated at 28 billion dollars. Such figures were obtained taking into account the possibility of saving up to 3.2 billion hours for banking operations, retail and transit transactions, as well as reducing the number of crimes related to cash.
According to analysts, the growth of consumer confidence in secure online payment platforms will contribute to the growth of the share of online payments. It is expected that the number of payments using cards will grow.