The Covid-19 pandemic has accelerated the UAE's transition to a cashless society as a growing number of businesses and individuals have stopped using physical cash due to safety and hygiene concerns, according to a new survey.
Almost two-thirds of people in the UAE, or 64 per cent, expect the country to become fully cashless by 2030, the poll by Standard Chartered found.
The survey, which was conducted globally among 12,000 respondents aged 18 and above from August 17 to 21, also found that 73 per cent of the UAE’s respondents believe Covid-19 has made them more positive about online shopping. However, prior to the pandemic, 72 per cent of consumers preferred to shop in-person versus less than a third online.
Almost half (47 per cent) of UAE respondents said they also prefer making online payments now rather than using in-person cards or cash payments, according to the survey.
“The UAE is on a fast track in adopting digital banking and cashless payments and the pandemic has accelerated the digital drive,” said Sonny Zulu, head of retail banking at Standard Chartered UAE.
This resonates with the findings of a Mastercard survey in April, which found that 82 per cent of UAE consumers prefer to make contactless payments due to safety and hygiene concerns amid the coronavirus pandemic.
The survey results are supported by ATM withdrawal data where Standard Chartered offers retail banking. Cash withdrawals from ATMs are now half what they were two years ago in 10 of the 12 surveyed markets: Hong Kong, India, Indonesia, Kenya, China, Malaysia, Pakistan, Singapore, Taiwan, and the UAE. There was no noticeable drop in the UK and US.
Although 46 per cent of consumers in the UAE reported spending more in July, 89 per cent of people in the Emirates say the pandemic has made them more careful with their expenditure against a global average of 75 per cent.
“We see consumers in the UAE spending more on basics, such as groceries, healthcare and digital devices than they did prior to the pandemic, and they expect this increase to continue in the future,” Mr Zulu said.
The survey found that 68 per cent of people in the UAE spent less on travel than they did before the pandemic, while 42 per cent have spent less on experiences and 64 per cent have spent less on clothes.
This trend is expected to continue in the UAE, with 38 per cent of respondents saying they anticipate spending less on travel and holidays, 22 per cent on experiences and 35 per cent on clothes in the future.
The economic impact of Covid-19 has made UAE residents more careful about how they track their spending, with more than 80 per cent of those surveyed either using or expressing interest in budgeting tools or mechanisms that block card spend over specified limits.
The pandemic has also made UAE consumers, especially younger generations, keen to buy locally made and sustainably sourced products. About 61 per cent of UAE consumers said they are more likely to shop locally, 59 per cent want to shop more sustainably and 55 per cent prefer to shop with small businesses.