Complex Made Simple

Take a good look at your Dirham; cash breathing its last

Remember when your parents gave you money as a kid to watch a movie and have some popcorn and how you made sure that money was stuffed in a way that makes your wallet bulgy for all your friends to see?

Here’s a tip. Get out of the wallet manufacturing business, if you’re in it. Cash, as we know it, is on its death bed, which means trees have a new lease on life.

The UAE has gone a long way since 2016, when the government signed a MoU with 16 of the largest banks in the country, who would develop a mobile wallet platform (mwallet), launching a new era of contactless payments.

The country recently announced that another global contactless payment technology, Apple Pay, is now authorized and launched in the UAE.

Apple Pay was launched in 2014 with half a dozen of US banks, but has since grown exponentially to over 4,000 financial institutions globally catering to over 20 million retailers welcoming the service. Those are 4,000 credit card issuers, ranging from Visa, Mastercard, American Express and others.

What’s the service about?

Read: Taste test: BlackBerry vs. Apple?

Hold, aim, shoot  

ApplePay will execute debit and credit card transactions from six banks by simply using a mobile phone. The banks include Emirates NBD, Mashreq, HSBC, RAKBANK, Standard Chartered and Emirates Islamic Bank.

So, if you’re a customer of any of these banks and carry an iPhone 6s or newer or an Apple Watch, you can begin making purchases by pulling your mobile’s e-wallet and zapping the checkout counter with green e-dollars or paying with new e-dirhams at participating outlets, of course.

According to Apple, Apple Pay in the UAE is available in places like Virgin Megastore, Marks & Spenser, Sharaf DG and Home Center.

Matthew Colebrook, Head of Retail Banking and Wealth Management, MENA & Turkey, HSBC, told TechRadar, member of the UK’s Independent Press Standards Organisation, which anticipated the move earlier this year: “HSBC is excited to bring to its UAE customers Apple Pay, which is transforming mobile payments with an easy, secure and private way to pay. As digitisation picks the launch of Apple Pay in the UAE will help encourage usage and acceptance of contactless payments.”

Will Apple Pay dwarf other m-wallets?

Techcrunch, a tech industry portal, estimates that Apple Pay accounts for 90 per cent of all mobile contactless transactions globally. In an interview with Apple’s VP of Apple Pay, Jennifer Bailey told the website: “Apple Pay is the future of everyday spend.” She backed those claims saying that the Apple Pay was in more than 50 per cent of all retail outlets in the US, including the top 100 sellers.

On January 1, 2017, the UAE Central Bank issued the “e-Payment Regulation” facilitating the adoption of safe, secure and user-centric digital payments in the UAE and regulating the digital payments infrastructure and other financial technologies (Fintech).

The regulation excluded cryptocurrencies, but what it did was open a market for players like Emirates NBD Pay, Samsung Pay, MashreqPay wallets and Etisalat Wallet.It is estimated that more than 350,000 people make purchases using these and other mobile payment applications.

Read: 2018 will be the year for cryptocurrency in UAE

Similar to when a mall or big shopping center squeezes out smaller shops in its vicinity, Apple Pay’s international might could prove more attractive to users and harmful to mwallet app vendors in the UAE’s burgeoning e-cash market.

Cash still ok for some and for gum 

The World Payments Report 2017 reported that global non-cash transaction volumes grew 11.2 per cent during 2014-15 to reach 433 billion, the highest growth of the past decade.

It said that Asian countries experienced impressive growth in non-cash transactions across all regions due to mobile payments and wallets such as Tencent’s WeChat Pay and Alibaba’s Alipay, with a growth rate of 43.4 per cent.

Read: Global digital transformation economy will cross $2trn in 201

“The second highest growth of 16.4 per cent was recorded in CEMEA (Central Europe, Middle East and Africa), recording the highest growth in card transactions and credit transfers in countries such as Saudi Arabia and Poland,” the report said.

“Despite the increased adoption of digital payments, cash continues to be in the mainstream, especially for low value transactions,” it added.

Cash is on the way out.

Global market research company Euromonitor International released a research in 2016 saying that consumer card payments would surpass cash payments for the first time in 2016, registering $23trn globally.