Dubai: Paying with a mobile phone and contactless cards will be increasingly popular in the Middle East in the next few years, with the move to transform Dubai into a “smart city” and the run up to the World Expo, a top executive said.
Contactless payment, a generic term that refers to any transaction where a consumer simply taps a mobile device or any credit, debit or prepaid card on a terminal when paying for just about anything, has yet to reach mass market adoption in the region.
“For the time being, only a small portion of the GCC [Gulf Cooperation Council] population is using [the payment] solution but more deployments are on their way and figures are picking up,” said Francois Chaffard, payment solutions and services director for Middle East and Africa at Gemalto.
Chaffard said there is already a “clear enthusiasm” among local residents to pay with more ease, and the stakeholders including banks, mobile network operators, retailers and public bodies are looking to provide innovative solutions.
In the UAE, contactless payment solutions are already available. MasterCard has about 700,000 cards and 3,000 terminals that are near field communication (NFC)-enabled. The company’s digital wallet, called “MasterPass,” will be rolled out in the country this year.
Emirates NBD has recently launched a Go4it card, an all-in one banking card that allows the user to make fare payments on the Road and Transport Authority (RTA) network and parking meters, make purchases and withdraw cash. “This type of project is very much the shape of things to come and we will see more projects of this type in the region,” said Chaffard.
In a street survey conducted by Gemalto last year in Dubai, 85 per cent of respondents said they are strongly in favour of using the “tap and go” or (NFC) technology on mobile phones.
However, the uptake and availability of advanced payment solutions in the Middle East is not yet on par with those in other markets. Western Europe and North America still lead the pack in terms of the total number of payment cards in circulation and volume of card-based transactions. Countries such as the US, UK, France and Germany rank very highly in online transactions.
In the area of contactless payments, Australia seems to stand out, with 150,000 contactless payment terminals, 20 million contactless cards in circulation and 50 million contactless transactions monthly. “But there is plenty of evidence of dynamism, innovation and deployment of advanced solutions in the Middle East, too,” said Chaffard.
Chaffard said projects such as the World Expo in Dubai, as well as the 2022 FIFA World Cup in Qatar will act as a catalyst, but the key to making contactless payment really the norm is the introduction of contactless-enabled terminals throughout the region.
“We can say that in the coming years, and in the GCC countries where the infrastructure is in place, anyone could potentially use contactless payment in their daily life, especially to pay for low-value items,” Chaffard told Gulf News.