The UAE economy is making a swift comeback from the impact of the COVID-19 pandemic. In a glowing example of innovative thinking, the return to normal will likely be in tandem with a seismic shift in how things work. Digital dealings are on the rise, and the increased uptake of mobile wallets is bolstering the economy with faster payments stimulating spending.
A population primed for change
The digital revolution is hugely supported by the UAE government, seen as a means to promote financial inclusion and forge a path to a cashless economy. The nation’s dynamic population is championing the move too, with internet and smartphone penetration indicating readiness.
To date, tech-savvy residents, forward-thinking retailers, and financial institutions have led an impressive adoption rate of digital payment methods. According to Emirates NBD, 80 percent of point-of-sale transactions are already cashless.
The UAE is going cashless in good company, joining the race with Sweden, South Korea and the United Kingdom. It’s expected the UAE will be completely cashless by 2030, according to two-thirds of people living in the nation and surveyed by Standard Chartered.
Home-grown solutions for a digital economy
The e-wallets developed on home soil largely cater to the nation’s dynamic population, more than 80 percent of which is expatriate. As a result, demand is high for round-the-clock international transactions at competitive rates, in addition to instant payment for utilities and domestic help.
Another factor that necessitates a digitalized economy is the number of people living in the UAE who do not have access to traditional financial services. Financial inclusion is a priority for the UAE government, and the use of mobile wallets that allow payments to be received and transfers made without linking a bank account or credit card will contribute to bettering the lives of many.
The future is digital
In January of 2021, smartphone penetration in the UAE stood at 99 percent indicating that a successful shift to digital is inevitable. With a population primed for technological advancements, the onus is on retailers and service providers to facilitate the acceptance of mobile wallet payments and infrastructure to meet the demand.
As a result, growth projections for the country’s mobile wallet market are optimistic. The UAE’s e-wallet sector is expected to grow at a compound annual rate of 24 percent to a valuation of $2.3 billion by 2022, according to a report by US-based TechSci Research. This is a huge increase from its 2016 valuation of $530 million and suggests the possibilities are limitless.
