Why carry cash at all? More consumers in the UAE and Gulf are thinking along these lines. (Image used for illustrative purposes only.) Image Credit: Gulf News Archive

Dubai: More consumers seem to be having an aversion to cash these days - more so when it comes to using ATMs.

Here's one example of what's happening with consumer preferences post-COVID-19 spread. According to Network International which tracked usage at ATMs, there has been a 50 per cent drop in such transactions compared to January and now. And these were customers who had used their cards "almost exclusively" at ATMs in January.

These days, their transactions are happening online or at a point-of-sale terminal. Cash is down in their list of needs.

if we look at a cohort of consumers who used their cards almost exclusively at ATMs in January 2020, those consumers are now only using their card at the ATM for just over half of their transactions, with the remainder taking place at a POS terminal or online.

A slight increase in regional consumer spending patterns is reflected in Network International’s third quarter numbers, with revenues down 17 per cent compared with a 23 per cent decline in the second.

There have been other gains too for the Dubai-based payments processing company. “We have also seen improvement in new business momentum since the height of lockdowns, including growing our issuing services for bank customers,” said Simon Haslam, CEO. Plus, there was progress in the “pace of online acquiring, where we are particularly pleased with recent merchant wins such as NowNow.

“Whilst trends are improving, we continue to monitor the outlook and ongoing impact from COVID-19. A number of our bank customers are feeling financial pressure, particularly in Africa, which is creating some short-term delay to business activities.”

Cash solid

The company now has a liquidity position of $300 million, made up of $190 million in undrawn lending facilities and a cash balance of $110 million.

Network International was also quick to come up with counter measures to help ease consumer concerns after the COVID-19 strike. It introduced an ‘easy payment plan’ that allows consumers to set up a monthly repayment plan for goods or services acquired through a point-of-sale terminal. (And if permitted to do so by the card issuer.)

“In the UAE, our core market, we continue to see a shift in consumer behaviour, away from cash and towards card and digital payments,” the company added in a statement. “This shift is supported by trends in the card data we host on behalf of bank customers.”