Dubai: Despite the available infrastructure and the high-profile launch of Apple Pay, a new mobile payments system by tech giant Apple, contactless payments in the UAE has yet to take off.
Contactless payment solutions use a technology called near-field communication (NFC), which is built upon radio-frequency identification (RFID), using radio waves to send data to a device. Similar to Bluetooth, NFC allows a smartphone and a reader to interact with each other. However, unlike Bluetooth, no pairing is needed with NFC.
In order to start making contactless payments, a user needs to have a bank account and credit card. Card details should be entered onto a chip known as secure element. The information will not be tampered with and can only be rewritten by a third party processor. Once the credit card details are in, a user downloads an app and then taps the smartphone on the NFC-enabled reader to complete the transaction.
While contactless payments solutions have been around for more than two years in the UAE, they are not popular yet.
An employee at Costa Coffee at Mall of the Emirates (near Ski Dubai) said that the store’s terminal for Visa’s contactless payments system known as PayWave is not popular with customers.
“Not many people know about it,” the employee said.
Metro stations
In the country, there are currently 16,000 NFC-enabled card payment terminals by payment solutions provider Network International, according to an emailed statement by the company.
The terminals are present in Costa Coffee, Burger King, VOX Cinemas, Reel Cinema, Lulu Hypermarket, Carrefour, Atlantis The Palm, Wafi Hospitality, Abu Dhabi Tourism Authority, Ahmad Seddiqi and Sons, Damas Jewellery, Juma Al Majid Group, Jumeirah Beach Hotel and JW Marriott Dubai, according to the statement.
At present, consumers in the UAE can make NFC-based payments with their RFID-embedded debit and credit cards, but not with their smartphones. Bhairav Trivedi, Network International’s chief executive, expects the technology to be available on smartphones “by mid to late next year”.
He said that most of the contactless payments in Dubai are done at metro stations.
“NFC will dominate in high throughput and low-value transactions,” he said.
Some UAE banks have launched NFC-based card payment solutions. Last April, Mashreq bank launched the NFC-powered sticker solution Tap n Go, which allows users in the UAE to make purchases with their smartphones. They just need to place the sticker on their phone.
Tap n Go is accepted at over 4,000 merchants in the country.
