Smart phones set to take over plastic money in UAE

ALKESH SHARMA / Emirates Business

Financial dynamics are continuously transforming for good reasons in the UAE, which boasts of a much denser concentration of credit cards when compared with other countries in the Middle East. Plastic money has taken the society with a storm and has become regular norm of the daily life. However, economists believe that plastic money would be soon taken over by the rapidly evolving mobile payment industry.
Revolution in smart apps, supported by deep penetration of smart-phones in the society, will facilitate the rapid maturing of mobile payment industry in the UAE.
“UAE is fast moving towards cashless society where credit cards are apparently ruling the market. However, a new trend is evolving where people don’t even require to carry credit cards and could make an instant payment right through their mobile phone, ” Rakesh Lokhandwala, an economist, working with a nationalised bank in the Emirates, told Emirates Business.
“Besides offering easy payment options, this trend will also impart a feeling of strengthening to the customers, where they feel like controlling things. They can make a payment at fuel station, shopping mall or a restaurant just by waving their phone before the tiny machine,” pointed out Lokhandwala. Reports say that in its drive to become cashless society, UAE will adopt mobile-driven payment solutions at a considerable pace when compared with other Gulf Cooperation Council (GCC) nations.
Ahmed Fasih Akhtar, Co-Founder and Chief Executive Officer of Trriple, said, “The way UAE consumers spend money is set to change forever, with mobile payments quickly becoming the norm rather than the exception. There is clearly a global push to move beyond using only plastic cards for payments, enriching the consumer experience through mobile apps.”
Trriple is a UAE-based start-up offering a first-of-its-kind mobile wallet that enables secure and convenient everyday payments saving consumers and businesses time and money, while meeting the regulatory environment of UAE.
Interestingly, economists say that moving away from cash payments could also add to the state’s exchequer in a big way. According to reports, nearly 75 percent of all UAE transactions may be done in cash; however, this traditional form of payment is as costly as it is apparently easy.
Global economists assert that cost of cash ranges between 1.25 and 2 percent of the country’s total Gross Domestic Product (GDP). For example in the US, with $16.5 trillion in GDP, the cost of cash per annum is US $200 billion.
“There is a series of expenditures related with the costs to cash; printing and distributing money. Whereas payments through smart-phones enhance security and they are far more efficient, economical and swift when compared with card payments,” said Lokhandwala.