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Throwing money away: UAE ready to become cashless society
MasterCard report measures ‘readiness’ of world economies to shift to non-cash payments.
September 24, 2013 12:11 by kippreport
When compared to more than 30 economies around the world, the UAE has been ranked as “rapidly moving away” from being a primarily cash-heavy society, according to a global study by MasterCard.
The report, produced by MasterCard Advisors, explores the evolution of consumer payment patterns in 33 countries from five regions, representing more than 85 per cent of global GDP, taking both developed and developing nations into consideration.
The UAE, which the report describes as having undergone a substantial share shift from cash to debit cards between 2006 and 2011, earned a ‘Trajectory Indicator’ of 65, making it one of the faster-changing payments ecosystems of the countries studied.
However, the country’s ‘Share Indicator’ score is 26, indicating that only 26 per cent of consumer payments by value were made by non-cash methods. This places the UAE in MasterCard’s ‘Inception’ category – countries that are embarking on their cashless journey.
To put this figure in perspective, the report identified Belgium (with an estimated 93 per cent of the value of consumer spend as cashless), France (92 per cent), Canada (90 per cent) and the UK (89 per cent), as countries where cashless payments are nearly ubiquitous.
On the other hand, with a readiness score of 69, the UAE has eliminated many of the typical macro-economic barriers that stand in the way of creating a cashless society. The UAE is among a group of countries where governments have taken strong initiatives to promote electronic payments.
The research reveals that a country’s readiness to move to a cashless society is determined by factors like the accessibility and affordability of financial services, the scale and market share of retailers, the level of technology that is available and participation of consumers in the formal economy.
Eyad Al Kourdi, UAE country manager at MasterCard, says: “The UAE is indeed progressing at a brisk pace on its cashless journey, which has received a tremendous boost with the implementation of key government initiatives, such as the Wage Protection System (WPS), that has vastly increased access to electronic payment methods over a short period of time. These changes suggest that the country’s cashless journey is well underway and gaining momentum.”