The number of cash-on-delivery payments is 75 per cent lower in the UAE since the onset of the Covid-19 pandemic as more consumers opt to pay online or through contactless methods.
The use of digital payments – either contactless cards or mobile wallets – has almost doubled (98 per cent) in the same period, a study by Dubai Police, Dubai Economy and Visa said on Sunday.
Visa's head of risk for the Middle East and North Africa
The decline in cash payments also looks set to be a permanent feature – about 40 per cent of respondents said they are less likely to use cash-on-delivery in the future and 45 per cent said they are more likely to use contactless payment methods.
“We are delighted to see confidence in digital payments rising steadily, which in turn will accelerate the ongoing digital transformation in Dubai … [it] presents a remarkable opportunity for retail innovations as it involves a vast and varied customer demographics and businesses,” said Ahmad Al Zaabi, director of consumer protection at Dubai Economy.
“We focus on making shopping in the city a pleasant experience and we have leveraged every opportunity, including the increase in online shopping in the aftermath of Covid-19, to encourage consumers to enjoy the benefits of cashless and contactless shopping.”
More than 600 consumers were interviewed for the survey between February and March this year. About 33 per cent of these were Generation Z (between 18 and 22 years old) and 67 per cent non-Gen Z (23 years and above).
Twenty seven per cent of respondents were Emiratis, 22 per cent were Arab residents, 47 per cent were Asian residents while other groups made up 1 per cent.
Globally, Covid-19 is spurring the quick adoption of digital payments and this structural shift will pick up pace when the economy begins to recover, according to consultancy Bain & Company.
By 2025, it estimates that the adoption of digital payments could accelerate by 5 to 10 percentage points globally.
However, online shoppers are also vulnerable to cyber attacks, the report revealed.
About four in 10 UAE consumers surveyed said they had experienced an online fraud attempt in the past year. About a quarter of consumers (27 per cent) have experienced phishing while 19 per cent have experienced credit card fraud and 17 per cent have been sent counterfeit goods.
"As people spend more and more time online – including many for the first time, fraudsters are using this as an opportunity to exploit consumers’ fears and lack of knowledge,” said Brig Jamal Al Jalaf, director of the criminal investigation department at Dubai Police.
“We strongly believe that government authorities, the private sector and local communities all have an important role to play in raising awareness among UAE residents.”
Consumers have embraced digital payments in the Covid-19 era but that does not come without risks, said Neil Fernandes, Visa's head of risk for the Mena region.
“As consumers shift online, fraudsters have sought opportunities to exploit these changes in how people pay for goods and services. The fact that one in two consumers surveyed would contact law enforcement in the event of fraud is a credit to our partners Dubai Police and Dubai Economy,” he said.
In the event of fraud, the most important actions consumers are likely to take are informing the bank (67 per cent) or customer services (58 per cent) and changing their password/PIN (72 per cent).
“As an industry we cannot afford to let our guard down. Our ongoing stay secure campaign is our effort in bringing together all participants in the payments ecosystem to work together to advance efforts to educate consumers on how to stay vigilant, identify potential fraud and what actions they should take if they are affected,” said Mr Fernandes.
About two thirds of consumers (63 per cent) have a high level of confidence in digital payments – whether shopping in-store and paying on delivery.
The main benefits of contactless payments cited by customers were convenience (60 per cent), speed (59 per cent), control (46 per cent), no need for human contact (56 per cent) and being offered an innovative way to pay (48 per cent).
Biometrically verified payments, such as mobile wallets, also scored highly with consumers, with more than a third saying they are secure and 60 per cent saying that they give users greater control.
Knowledge of the technology that protects digital payments is a key driver of consumer trust, the study found.
More than half of respondents said having knowledge of security technology helps build their confidence in cashless options.
