Dubai: A new study, commissioned by Visa, has found that moving away from cash could yield up to $2.2 billion (Dh8.08 billion) annually to consumers, businesses, and the government in Dubai.
Dubai missed out on the highest classification, digital leader, which signifies a city with a high usage of digital payments, which includes cards and mobile payments, a high level of readiness for new technology, and a developed banking and digital payment system. It also indicates a population nearly fully banked.
Instead, Dubai was given the third highest distinction of digitally maturing, which implies a city with a cultural inclination towards cash, high levels of the population living without a bank account, and low usage of digital payments.
Cities such as Tokyo and Sao Paulo fall in to this category, while Stockholm and Chicago are given as cities where the entire population is banked, and the city has high levels of usage of digital payments.
The lowest classification is cash centric. The study uses Lagos, Nigeria, as an example of this.
Globally, Visa estimates that the total net benefit associated with cities’ increased usage of digital payments was $470 billion, the majority of which would trickle down to businesses.
This would translate, the study suggests, into $12 trillion of additional economic activity, and in turn increase gross domestic product (GDP) by 19 average annual basis points, improving employment by five million jobs, supported over 15 years.
Visa says that more digital payments would also increase global productivity, and wages.
Shahebaz Khan, Visa’s Country Manager, UAE, said in a statement: “Dubai currently stands at the threshold of becoming a digitally advanced city, and with the government driving the Smart City agenda in both the public and private spheres, we can expect the transition to happen sooner rather than later.”
He added: “The benefits that a cashless society would bring to its economy are significant and, as a global leader in smart payments, Visa stands well positioned to enable the circulation and adoption of smart money, innovating with the government, banks, merchants and consumers alike, to achieve that transformation.”
Achieving a more digital society is not without its challenges, however.
According to Visa, Dubai suffers from a limited access to digital payment products, an inadequate digital infrastructure, a cultural and habitual attachment to cash, security and privacy concerns, and the misperception that the cost of accepting digital payments is higher than cash.