Most UAE consumers use at least one emerging payment method: Mastercard

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Dubai: A large majority (88%) of UAE residents used at least one emerging payment method in 2021, according to Mastercard’s New Payments Index 2022.

“The adoption of a wider range of digital payment methods is accelerating in the UAE and the technology that powers the future of payments is already here,” Mastercard said. “In addition to being aware of solutions such as cryptocurrency, digital cards, biometric payments, BNPL (Buy Now Pay Later) and open banking, consumers in the United Arab Emirates are increasingly using actively these solutions in their daily lives.”

Of those using a payment method, approximately 39% used a mobile smartphone wallet, 29% used BNPL, 20% used a cryptocurrency, and 18% used a wearable technology device that enabled payment. Consumers are also making purchases in increasingly diverse ways, including through voice assistants and social media apps.

Declining cash

While traditional payment methods are still popular, 29% of consumers in the UAE reported using less cash in the past year. In contrast, 66% of UAE users have increased their use of at least one digital payment method over the past year, including digital cards, SMS payments, money transfer apps digital and instant payment services.

While crypto usage was low, 40% of cryptocurrency users in the UAE say they have used it more in the past year.

These behaviors are expected to continue, with convenience and security key to growing adoption, Mastercard said.

The index confirmed that security is a priority when deciding which payment methods to use, globally and in the UAE (36%). Security and rewards are the top considerations in the country, followed by promotions and ease of use. Highlighting sustainability as a key driver in the region, more than a third of UAE consumers said they also consider social and environmental benefits.

“It is exciting to see the growing adoption of emerging payment methods and the eagerness of consumers to reap the benefits of the digital economy in the UAE and across the region,” said JK Khalil, Cluster Managing Director, MENA East, Mastercard.

budgeting tool

The survey revealed that there is strong awareness of BNPL as a budgeting tool.

Many UAE consumers have heard of BNPL, with 87% saying they are familiar with the concept, and almost half (46%) are already comfortable using it today. Consumers want the flexibility and convenience of BNPL, but with the sense of security that comes with a trusted provider like a bank or payment network.

Those who have used BNPL find it useful for emergency purchases and large purchases, as well as to increase their purchasing power. Consumers also find BNPL useful for unique use cases, including as a budgeting and financial planning tool.

Blockchain knowledge

There is broad general awareness of cryptocurrency (95%) and NFTs (non-fungible tokens) (86%), although a thorough understanding of both currencies and the underlying technology is lacking, with three consumers United Arab Emirates out of four (74%). agreeing that they would use cryptocurrency more if they understood it better.

Consumers are looking for more education, security, and flexibility to manage crypto assets. Still, around two-thirds (66%) of consumers in the UAE agree that NFTs and other digital assets could be good investments. Two in three UAE consumers (67%) have undertaken at least one crypto-related activity in the past year, such as opening a crypto wallet, buying, trading, or holding crypto. crypto as an investment.

Most consumers are open to future cryptocurrency engagement, with potential opportunities ranging from holding an investment, to redeeming rewards, using crypto as payment, to buying an NFT using a credit or debit card.

Direct payments

Most consumers are open to direct account-to-account payment options, linking their account to a merchant site for future purchases. About 83% of UAE consumers using account-to-account payments have maintained or increased their usage over the past year.

Seven in ten consumers agree they are interested in a bill payment option that allows them to change the date they pay their monthly bills, primarily due to irregular income. Bill payment options that allow them to pay over a period of time using a buy now, pay later solution (71%) were also attractive, as well as automatic payments for their household bills (70%).

Consumers rely on digital financing options for their day-to-day financial tasks, with the benefits of open banking like speed, convenience and transparency. Eight in ten (81%) know about open banking and use it to pay their bills, do their banking, guarantee or refinance loans and make BNPL payments.

More than half (55%) of UAE consumers feel safe using apps to send money to individuals or businesses from their phones. Five in ten (50%) are willing to share financial information with apps to access payment tools that help them manage their money.

Generation Z in the lead

Younger generations have become more digital in their buying and payment behavior, and their engagement and use of emerging digital payment engagement is accelerating at a faster rate than older audiences. They are also more open to exploring emerging payment approaches like crypto or buying virtual goods in the metaverse.

In the UAE, Gen Z is the least likely to use cash or make in-person purchases and payments. They are proactively looking for new payment methods, and nearly two-thirds of Gen Z (64%) in the country are likely to have obtained a new digital payment alternative (e.g. digital wallet, click account -to-pay) compared to just 22 percent of baby boomers.

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