As the demand for emerging payments and choice continues, Girish Nanda, Mastercard’s Country Manager for UAE and Pakistan, says a wider range of payment solutions and products is needed to meet the accelerating enthusiasm for the future state of pay.
How different is today’s consumer from the pre-pandemic consumer?
As a payments technology company we know that new payments technologies were always going to grow. The difference is just that instead of gradual adoption, we have witnessed accelerated adoption. Behavioural lifestyle changes made consumers more open to change and they know that new payment options are possible and available.
Consumers today expect convenience, choice and flexibility, and it is up to businesses to respond to this demand. We foresee that speed and security will play an even more important role in delivering these needs and providing a seamless payment experience.
What is the biggest takeaway from Mastercard’s New Payments Index?
It’s interesting to note that new payments are not abstract futuristic concepts, but real payment options that are already here, already in demand, and already being integrated into consumer behaviour.
The research that resulted in the Mastercard New Payments Index shows that 97 per cent of UAE consumers are ready to consider using at least one emerging payment method in the next year. That might be cryptocurrency, biometrics, contactless, or a QR code. So without a doubt, the adoption of new payment technologies is rising, and consumer appetite for new, fast and flexible digital experiences continues to grow.
The research that resulted in the Mastercard New Payments Index shows that 97 per cent of UAE consumers are ready to consider using at least one emerging payment method in the next year. That might be cryptocurrency, biometrics, contactless, or a QR code.
Is it just the trendiness that excites consumers or are there other advantages?
No doubt there is the associated excitement of trying something new, but it’s also very much about choice. The reason emerging payments technologies are trending is because people’s comfort with them and understanding of them are increasing.
Access has also improved. Nine in ten consumers in the region have more ways to pay today compared to this time last year. And consumers see efficiencies – nearly 3 out of 4 (74 per cent) UAE consumers said that digital payment methods help them save money.
People are definitely hearing more about cryptocurrency these days, especially about buying crypto – do they also use it to pay for things?
Right now, consumers can buy, sell and trade cryptocurrency as a commodity or investment. And while the should-I-buy question comes up often, consumers are also increasingly showing interest in being able to spend crypto assets for everyday purchases. As global interest in digital currencies continues to accelerate, 5 in 10 people (50 per cent) in the UAE say they plan to use cryptocurrency in the next year, with more than half (63 per cent) noting they are more open to using it than they were a year ago.
Even with rising interest in cryptocurrency, work is still required to ensure consumer choice, protection, and regulatory compliance. Mastercard announced earlier this year that we will start supporting select cryptocurrencies directly on our network. Why? Because it’s about choice. We want to enable customers, merchants and businesses to move digital value – traditional or crypto – in the ways they want.
What is the perception of biometric payments?
Consumers are viewing biometric payments as more trustworthy. In our research, over half of UAE consumers said they plan to use biometric verification methods like gait or walk assessments and fingerprint authorisation. In terms of safety too, perceptions are positive. Sixty-eight per cent of consumers would feel safer using biometrics to verify a purchase, as opposed to entering a pin.
Which other payment technologies did the research deliver insights on?
The UAE is already a major market in the region for digital wallets, which has also seen a surge in popularity. Sixty-six per cent of UAE consumers said they were likely to use digital wallets next year. QR-based payment options are also viewed as a clean and convenient way to interact with merchants. In the next year, 56 per cent of people in the UAE expect to use more payment technologies like QR codes.
Are there any insights that small businesses can take from this new research?
Absolutely. The research clearly shows that there is significant consumer interest around new payment technologies, and adoption will continue to grow. So, businesses that are serious about longevity should take a moment to consider how they want to adapt and prepare for an omnichannel future.
About eight in ten consumers (78 per cent) are more excited to shop at retailers that can offer the latest payment methods and an equal proportion said they would be more loyal to retailers who offered multiple payment options. On the flipside, 62 per cent of UAE consumers say they would avoid businesses that do not accept electronic payments of any kind.
There is also the hybrid element to consider, which expands on the themes of choice and flexibility. Over three in four UAE consumers (76 per cent) said that they prefer to shop more at small businesses that have both an in-person and online presence. Ultimately, businesses that can provide multiple ways to shop and pay are best positioned to meet consumer expectations.
What is the trajectory for contactless payments as a trend?
Over a year ago, Mastercard’s first contactless consumer survey indicated that new consumer behaviours are accelerating adoption of contactless technology, which was also the digital catalyst to explore new payment options. That still holds, and the reason of course is that the benefits of contactless payments go beyond being touch-free, safe and hygienic. It’s also really fast, very convenient, and extremely secure.
As a result, many merchants have also turned to contactless payments and in the UAE, 88 per cent of in-person transactions are now contactless. Worldwide, Mastercard saw one billion more contactless transactions in the first quarter of 2021 compared to the same period of 2020.