There is a broader appeal for digital wallets among younger shoppers. About 16 per cent of 18- to 24 year-olds prefer digital wallets, compared with 9 per cent in the 25-34 age group, according to the survey by payments solutions provider Checkout.com, which polled 1,008 consumers in the UAE between May 19 and 24.
“With more and more people embracing the convenience of digital wallets, coupled with the reassurance of their transactions being safe and secure, digitisation of the payment system is unstoppable,” said Mo Yusuf, regional manager for the Mena region and Pakistan at Checkout.com.
The increased use of contactless mobile payments, driven by hygiene concerns about using cash during the pandemic, has led to greater use of digital wallets.
Consumer spending through digital wallets is expected to exceed $10 trillion in 2025 — up from $5.5tn in 2020, according to a 2021 report by UK-based Juniper Research.
A digital wallet stores users’ credit and/or debit card information and links it to a payment gateway to allow purchases at a point of sale.
Similar to credit cards, digital wallets only work at merchants that accept them as a payment method.
About 48 per cent of respondents to the Checkout.com survey said that digital wallets could lead to a cashless society in a decade.
Cash usage continues to decline in the UAE, with only 20 per cent of respondents saying they use the cash-on-delivery option for online purchases, according to the research.
Fifty-eight per cent of UAE residents cited bill payments as the top reason for using digital wallets, followed by 55 per cent who use them to pay for groceries and 28 per cent who rely on them to send funds to friends and family, the research showed.
About 40 per cent of respondents also said they trust digital wallets as much as banks, the survey revealed.