More than half of the UAE consumers who responded to a survey plan to be cashless by 2024 compared to the global average of 41 per cent, according to a new report by Visa.
More than two-thirds (68 per cent) of the respondents in the UAE said they abandoned a purchase in the past few months because digital payments were not accepted by the merchant, the survey showed.
The coronavirus pandemic, which aided the shift to online payments and shopping in the UAE, led to permanent changes in habits, the FinTech company found.
More than 94 per cent of consumers in the UAE said they will continue to use digital payment channels as much as, or more than, in 2021.
“Payments are no longer about simply completing a sale ... it’s about creating a simple and secure experience that reflects one’s brand across channels and provides utility to both the business and its customer,” Visa’s general manager for the UAE, Bahrain and Oman Shahebaz Khan said.
Visa’s survey, which was conducted by Wakefield Research in December 2021, interviewed 1,000 people aged 18 years or more in the US, and 500 in the UAE, Brazil, Canada, Germany, Hong Kong, Ireland, Russia and Singapore.
It also surveyed 2,250 small business owners with 100 employees or fewer in the same countries to gauge their sentiments towards the digital economy.
The global payments industry was among the sectors where there were fast-paced changes during the pandemic, as consumers increasingly used digital platforms to shop, study and work online.
More than seven in 10 small businesses in the UAE, 59 per cent globally, already are, or plan to be, cashless by 2024 to meet their customers’ expectations.
Nearly 99 per cent of the businesses in the UAE attributed pandemic survival to selling online, with 58 per cent of their revenue now from e-commerce.
To fuel their growth in the coming months, small businesses are looking towards digital, including crypto-based payments and cross-border commerce, Visa said.
“The digital capabilities that small businesses built up during the pandemic – from contactless to e-commerce – helped them pivot and survive and by continuing to build on that foundation, they can now find new growth and thrive,” Mr Khan said.
More than 95 per cent of businesses surveyed in the UAE (74 per cent globally) said accepting new forms of payments is fundamental to their growth.
It suggests that digital payments are about finding growth in new digital realities, Visa said.
Nearly 93 per cent of small businesses in the UAE said they are optimistic about the future of their businesses.
All small business owners surveyed in the UAE (82 per cent globally) said they plan to accept some form of digital payments in 2022, including crypto, with 35 per cent (24 per cent globally) indicating a willingness to accept currencies such as Bitcoin, the biggest cryptocurrency.
The UAE Central Bank does not presently accept (or acknowledge) crypto-assets or virtual assets as a legal tender in the UAE. The only legal tender in the country is the dirham.
As a result of continued supply chain disruptions, consumers are also embracing the global marketplace, the survey said.
Almost 70 per cent of UAE consumers, compared to 59 per cent globally, are willing to buy internationally. The most persuasive factor cited for shopping on international e-commerce websites is positive customer reviews, Visa said.
Nearly 86 per cent of the businesses (50 per cent globally) also plan to increase cross-border sales in 2022.
However, a majority (96 per cent) of the UAE businesses find it challenging to accept and process cross-border payments, demonstrating demand for more faster and secure cross-border payment solutions, it said.
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War 2
Director: Ayan Mukerji
Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana
Rating: 2/5
The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
Results
6pm: Dubai Trophy – Conditions (TB) $100,000 (Turf) 1,200m
Winner: Silent Speech, William Buick (jockey), Charlie Appleby
(trainer)
6.35pm: Jumeirah Derby Trial – Conditions (TB) $60,000 (T)
1,800m
Winner: Island Falcon, Frankie Dettori, Saeed bin Suroor
7.10pm: UAE 2000 Guineas Trial – Conditions (TB) $60,000 (Dirt)
1,400m
Winner: Rawy, Mickael Barzalona, Salem bin Ghadayer
7.45pm: Al Rashidiya – Group 2 (TB) $180,000 (T) 1,800m
Winner: Desert Fire, Hector Crouch, Saeed bin Suroor
8.20pm: Al Fahidi Fort – Group 2 (TB) $180,000 (T) 1,400m
Winner: Naval Crown, William Buick, Charlie Appleby
8.55pm: Dubawi Stakes – Group 3 (TB) $150,000 (D) 1,200m
Winner: Al Tariq, Pat Dobbs, Doug Watsons
9.30pm: Aliyah – Rated Conditions (TB) $80,000 (D) 2,000m
Winner: Dubai Icon, Patrick Cosgrave, Saeed bin Suroor
