Increasing awareness of the advantages of electronic payments is crucial to driving their adoption in the Middle East region, according to numerous authorities in the field.
While electronic payments are available in many markets in the Middle East, the region has not been so ready to make the switch from a cash-based economy, with only around 10% of payments made electronically.
However, according to MasterCard’s division president for the MENA region, Raghu Malhotra, this is beginning to change – and the UAE is the market leading the charge. A recent MasterCard study found that the Emirates were beginning to embrace electronic payments, with non-cash transactions making up 26% of consumer payments by value.
While there is an air of mistrust over the security of online payments, another impediment to adoption is that potential users simply don’t understand the advantages of electronic transactions. “Consumer education holds the key to an increase in the adoption of electronic payment solutions,” said Malhotra.
Government backing of new technologies will also go a long way towards driving adoption of cashless payments. The governments of both the UAE and Saudi Arabia are encouraging the use of e-payments to aid their economies and facilitate workers’ finances. For example, the UAE’s Ministry of Labour’s Wages Protection System now allows labourers to receive their salaries via prepaid cards.
“Electronic payment adoption in the UAE will rise with large-scale deployment of mobile payment solutions and the deployment of multi-application banking cards. There are undoubtedly a number of initiatives underway that will put real momentum behind the mobile payment revolution,” said Christelle Toureille, marketing director for telecom and banking, Middle East and Africa at mobile payments firm Gemalto.
“Mobile money and contactless payments are getting great momentum in the region, especially in the UAE. Banks and mobile operators are seriously looking into it, but large nationwide deployment has not occurred as yet,” she added.