Dubai: For many people in the UAE, cash is dying. According to the latest data supplied by a market research firm, UAE consumers are increasingly living in a cashless world and abandoning their beloved paper bills and coins in favour of plastic money.
From paying for everyday things, restaurant meals and utility bills and footing the cost of high-value purchases, residents are just content with swiping away their cards.
The latest data from Euromonitor International showed that UAE consumers splashed out a whopping $59 billion (Dh216 billion) on goods and services using only their credit, debit and prepaid cards in 2017.
The figure accounts for 45 per cent of all sales transactions at retail shops and other business outlets around the country – more than all the other payment types combined in the UAE. By 2020, plastic money will clearly overtake cash as a preferred mode of payment, representing a little over 50 per cent of all transactions.
Cash payments, on the other hand, were worth a total of $40 billion last year, accounting for just a third of all the transactions. And by 2020, paper money will represent only 27.8 per cent of all purchases, down from 31.7 per cent in 2017.
For years, cash transactions accounted for a huge chunk of retail spending in the UAE, but the latest figures show that the trend is changing.
According to Euromonitor analyst Rabia Yasmeen, cash transactions are already on a decline, while card payments are moving upwards.
“Consumer card payments grew by 7 per cent during 2017, while cash payments declined by 3 per cent. Over the forecast period, we expect the share of cash to decline from 32 per cent in 2017 to 26 per cent in 2022,” Yasmeen told Gulf News.
One of the many reasons cards have won over consumers is convenience – card or digital payments eliminate the need for shoppers to stuff their wallets with thick wads of cash.
But payment experts say there’s more to convenience that comes with cashless spending. In a study commissioned by Visa, consumers, businesses and governments could enjoy long-term benefits if people stop using cash.
For one, there will be less time spent on banking, as well as on transactions at the shops. And what’s more, there will be less incidence of cash-related crime.
“Consumers across 100 cities could achieve nearly $28 billion per year in estimated direct net benefits. This impact would be derived from factors including up to 3.2 billion hours in time savings conducting banking, retail and transit transactions, in addition to a reduction in cash-related crime,” said Visa.
Yasmeen said that increasing consumer trust on secure online payment platforms will drive the growth in card payments online.
“Card payments are also expected to grow as digital wallets and mobile wallets ease payment for consumers. Card operators such as Visa and MasterCard are constantly innovating the payment ecosystem which will strengthen performance of cards in the future.”