The Banking Executive, Issue 155, November 2021

SHIFT TO E-COMMERCE AND DIGITAL SPENDING IN UAE IS HERE TO STAY: VISA With many consumers now getting used to cashless or digital spending, the “new normal” of shopping is likely here to stay even when the coronavirus pandemic is over, ac- cording to a new survey by Visa. The financial services firm recently polled consumers in the UAE and found that 87 percent will continue to shop remotely once the health cri- sis ends, while 64 percent have in- creased their online spending, indicating that the pandemic-driven shift to digital is not going away soon. In a statement released on Wednes- day, Visa said digital payments re- main the preferred method for payment transactions among con- sumers, with continued strong use of contactless solutions, including cards, digital wallets and mobile pay- ments. “Our research shows how the COVID-19 pandemic has trans- formed the way the region’s con- sumers spend their money, with many of these significant behavioral changes likely to continue after the pandemic is over,” said Shahebaz Khan, Visa’s General Manager for UAE. “As online shopping and contactless payments become the new normal, it is more important than ever that businesses adapt to the changing consumer demand for a digital expe- rience, which is increasingly seen as a safer and more seamless alternative to cash.” ABOUT THE SURVEY Visa’s survey looked into consumer attitudes and spending habits across markets in Central and Eastern Eu- rope, the Middle East and Africa (CEMEA). The study was carried out in “four waves” between 2020 and 2021, to determine the changes in trends during and months after the height of the crisis. The latest findings indicated that consumers in the UAE are still cau- tious, but “the urgency in controlling savings and budgeting has somewhat waned”. Consumers in the country are also optimistic towards the UAE’s economic recovery, with a positive shift in opinions towards income, spending and savings. “While consumers in UAE remain cautious, those surveyed have largely resumed shopping, dining, entertain- ment and travel, albeit with hygiene precautions in place,“ Visa said. “The results show that consumers are gaining confidence in their shopping behaviors, with a significant im- provement in consumer shopping habits for essentials, as well as being conscious about hygiene and avoid- ing contact.” Visa’s survey also found that while overall travel spending was severely impacted during the height of the cri- sis, the sector is now beginning to re- bound. DIGITAL VERSUS CASH Among those polled in the UAE, 22 percent said they now prefer to take short-haul trips over long-distance destinations, while 33 percent said they prefer staycations over interna- tional travel. Throughout the pandemic, Visa found that UAE consumers have con- tinued to prefer digital payments to cash transactions, including contact- less cards, mobile payments, digital wallets and peer to peer transactions. In the latest installment of the study conducted in August 2021, 57 per- cent of consumers in the UAE said they have increased their credit card usage, while 53 percent and 47 per- cent reported higher debit card and prepaid card transactions, respec- tively. There has also been a spike among UAE consumers in the use of mobile payments and digital wallets, with 66.5 percent of those surveyed re- porting higher usage of such pay- ment methods. the BANKING EXECUTIVE 28 ISSUE 155 NOVEMBER 2021