Remember the days of paying for airline tickets and hotels in cash? Or searching for an ATM or currency exchange with the best rates as you continued your holiday spending. Not that long ago traveling still entailed carrying wads of cash in our pockets.
And while our societies are not completely cashless yet, it is possible to travel much of the world without any physical money. Now, merchants and economies that enable ease of payment for travellers will thrive.
In the UAE, and Dubai in particular, where 57 million travellers are forecast to come through the airport this year, merchants who broaden acceptance of payment methods hold significant opportunities for increased revenue and loyalty – a move that will further boost the nation’s tourism leadership.
Simply put, cashless travel is the future of our tourism economy.
The tourism sector has already been rapidly bouncing back with Dubai International Airport retaining its top place as the world’s busiest for international travel in 2021. As the largest acquirer in the market with a huge repository of transaction and non-transaction data, Network International noted that hotels, airlines and restaurants were among the Top 5 sectors with the highest volume of digital transactions last year.
Retail including jewellery and clothing, as well as duty free, also ranked in the Top 10 sectors with the largest volume of digital payments. Merchants in these sectors in particular cannot afford to look away and must prepare for new payment behaviours if they want to capitalize on the reviving tourist flows.
Experience is everything
With Dubai Airport forecasting a full recovery to pre-pandemic figures by 2024, and as contactless payments become more and more popular across global cities, merchants must take serious stock of whether their payment experiences are tourism-friendly.
This includes offering Alternative Payment Methods (APMs) such as domestic cards, digital and mobile wallets, and ‘Buy Now Pay Later’ financing, as well as integrating multiple mobile payment options that are part of the post-pandemic way of life.
As a partner to major global alternate payment providers with visibility across the ecosystem, our data indicates that shoppers visiting the UAE prefer to pay via APMs from their domestic markets where available, and are also likely to spend more at these locations.
What merchants should pay attention to, is just how impactful offering these options can be. A shopper is likely to walk next door to a competitor because they offer their preferred payment method.
Based on our analytics, we are also able to note which nationalities are spending more across our network to structure our strategy and help our merchant customers do the same in accordance to the changing dynamics of tourist spending in the UAE. Such analytics are especially insightful in a market like ours that serves as the critical link between East and West, where we may think we are aware of visitor traffic trends but real time patterns differ.
Digital payments data helps businesses understand so much more about customers and their spending habits, which can be used to provide personalized incentives to boost loyalty and drive revenue.
Meanwhile, as Gen Y (millennials) get older and gain more earning power, and Gen Z begins to join in the workforce, brands need to urgently understand the expectations of these digital-first buyers.
Millennials are now the largest adult cohort worldwide – and Gen Z, which is soon set to become the largest, already makes up over 20% of the world’s population.
As we continue to digitize every facet of our everyday lives, the way we pay makes no exception. According to research from global market intelligence provider Statista, the value of contactless transactions is set to nearly double from $4.4 trillion in 2020 to $8.26 trillion in 2024.
With the total contribution of the travel and tourism sector to the UAE’s GDP is forecast to reach Dh264.5 billion ($72 billion) in 2027, cash-free journeys are closer than we think.
And searching for a place to swap your currency may soon become a thing of the past.