UAE consumers are likely to continue using contactless payments when shopping at physical stores and making digital payments online even after the Covid-19 pandemic subsides, signalling that changes spurred by the outbreak are here to stay, a new survey found.
Some 43 per cent of consumers in the UAE will continue using contactless payments more in stores and 48 per cent will increase their use of online payments with cards or digital wallets for future e-commerce purchases, according to a study by Dubai Police, Dubai Economy and Visa released on Monday.
"The study shows that consumer behaviour changes due to the pandemic – such as shifting online and increasing use of digital payments, are likely to continue even after the pandemic – an important take-away for businesses developing strategies for the post-Covid-19 consumer and market overall," Mohammed Ali Rashed Lootah, chief executive of the Commercial Compliance and Consumer Protection (CCCP) sector at Dubai Economy, said.
These shifts in consumer behaviour caused by the pandemic are expected to be the “new normal” as "more consumers gain confidence in digital payments", the survey said.
Globally, Covid-19 is spurring faster adoption of digital payments and this structural shift will accelerate 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.
Currently, 68 per cent of respondents surveyed in the UAE have reduced shopping at physical stores since the coronavirus outbreak began and 49 per cent are shopping online more.
When they do shop at stores, 71 per cent are using digital payments over cash.
Of those shopping more online, 61 per cent are using cards and digital wallets to pay instead of cash on delivery.
Increased trust in the security of the payment technology, speed, convenience and limited human contact, were the main reasons cited for an increased preference for digital payments, according to the survey.
However, online shoppers are vulnerable to cyber-crime attacks as the pandemic has led to more people adopting e-commerce.
“Fraudsters are seeking to take advantage of people spending more time online, preying on their fears and anxieties, and exploiting new systems of remote working," Brigadier Jamal Salem Al Jalaf, director of the criminal investigation department at Dubai Police, said. "Government authorities, [the] private sector and the local community all have an important part to play to ensure we are all protected."
First-time online shoppers are particularly vulnerable, said Neil Fernandes, Visa’s head of risk for the Middle East and North Africa.
"That is why educating consumers about safe payment behaviour is critical not only for the moment but as we move forward and adapt to the new normal."
The survey findings highlight significant differences in the behaviour of Gen Z (18 to 22 year olds), compared to the rest of the population.
Less than half (49 per cent) of Gen Z respondents find biometrics secure, compared to 70 per cent of the rest.
With regards to tokenisation technology, which protects cardholders' information, less than half of Gen Z consumers (48 per cent) believe it improves mobile wallet security compared to 61 per cent of non-Gen Z consumers.
Highlighting insights for merchants, the survey found that more than half (58 per cent) of UAE consumers surveyed have abandoned their online shopping cart because of authentication delays or failure.
Consumers in the survey identified some elements that help build confidence in e-commerce sites including offering a range of payment options, displaying verified customer reviews, offering payment options in local currencies, trust badges or security icons and ease of refunds.