UAE financial transactions drop in electronic domain

Abu Dhabi: The UAE Central Bank said yesterday that statistics for the UAESWITCH for the third quarter have shown a slight decrease in number and value of financial transactions conducted electronically through the UAESWITCH.

The total number of financial transactions fell to Dh18.23 billion in the quarter, compared to Dh19.007 billion in the second quarter, down 4.08 per cent.

Also, the total value of transactions fell to Dh20.427 billion in the third quarter, compared to Dh20.983 billion in the second quarter, down 2.65 per cent.

As for the number and value of transactions across the UAESWITCH and other GCC networks, they increased to 940,000 in the third quarter compared to 818,000 in the second quarter, an increase of 14.91 per cent.

"It seems the people are shying away from using ATMs and credit cards to do their financial transactions.

"They may have taken recourse to using conventional methods such as cash and cheques," said economist Dr. Mohammad Amerah commenting on the Central Bank figures.

Safety fears

"It looks like some people are afraid of using plastic money for the risk of cloning of their cards by unscrupulous elements. They want to avoid risk of being cheated," he added.

Amerah said the Central Bank issued circulars recently to commercial banks in order to protect their customers from forgery.

It looks like some people seem to have taken precautionary measures against such a possibility, he added.

Amerah said if the trend of using less plastic money picks up, it would help consolidate the UAE's financial system.

Another UAE-based economist, who didn't want to be identified, said the Central Bank data "potentially indicates a slowdown in consumer demand".

New norms

In March, the Central Bank put a stop to banks selling loans and other financial products to customers over the telephone, in response to complaints by UAE residents against aggressive marketing by banks and finance companies trying to sell products such as credit cards and personal loans over the telephone.

In February, the apex bank announced the approval of a new set of regulations with regard to bank loans and other services offered by the banks.