As the world went into pandemic lockdown in 2020, consumers shifted their spending habits to embrace contactless tap-and-go payments and online shopping. With stores closing and social distancing taking hold, retailers worldwide moved their businesses online, embraced e-commerce and explored the potential of new ways to pay. More than a year later, research from Mastercard shows that the adoption of new payment technologies is rising, and consumer appetite for new, fast and flexible digital experiences continues to grow.
The Mastercard New Payments Index shows 97 percent of 1,000 UAE consumers surveyed will consider using at least one emerging payment method, such as cryptocurrency, biometrics, contactless or QR code, in the next year.
Two-thirds of respondents (66 percent) agree they have tried a new payment method they would not have tried under normal circumstances, but the pandemic has galvanised people to try flexible new payment options to get what they want, when they want it. With this interest and consumer demand also comes a greater expectation for businesses to provide multiple ways to shop and pay. In fact, 62 percent of UAE consumers say they would avoid businesses that do not accept electronic payments of any kind. Additionally, nearly 3 out of 4 (74 percent) UAE consumers say that digital payment methods help them save money.
“The pandemic made us think differently, partly out of necessity,” said Craig Vosburg, chief product officer at Mastercard. “To deliver the choice and flexibility that consumers need – and increasingly expect –retailers worldwide need to offer a range of payment solutions that are easy to access and always on. As we look ahead, we need to continue to enable all choices, both in-store and online, to shape the fabric of commerce and make the digital economy work for everyone.”
Contactless technology was the digital catalyst to explore new payment options because of its fast, secure and touch-free experience. Between the first quarter of 2020 and the same period in 2021, more than 100 markets saw contactless as a share of total in-person transactions grow by at least 50 percent. A year into the coronavirus pandemic, contactless is showing its staying power and dynamism – in the first quarter of 2021 alone, Mastercard saw 1 billion more contactless transactions worldwide as compared to the same period of 2020. All signs point to a continued growth path for contactless, with nearly 7 in 10 consumers globally anticipating using a contactless card this year.
“Consumers today expect convenience and it is up to businesses to respond to this demand,” said Girish Nanda, country manager – UAE and Pakistan, Mastercard. “We have also witnessed how small businesses too must be prepared for an omnichannel future. We foresee that speed and security will play an even more important role in delivering these needs and we expect continued growth of new solutions to provide a seamless payment experience. Together with our partners we are working to enable the ease of acceptance of emerging payments that are coming out strong in a post-pandemic world.”
Looking to the future, digital currencies and wallets, wearables, biometrics, contactless and QR codes are trending as emerging payments technologies as people’s comfort with them and understanding of them increases and the use of cash decreases. In fact, 90 percent of consumers in the region have more ways to pay compared to this time last year. The exploding interest in new payment technologies may encourage businesses to expand their options at checkout. The Mastercard New Payment Index found:
Cryptocurrency gains ground Today consumers can buy, sell and trade cryptocurrency as a commodity or investment. Consumers are also increasingly showing interest in being able to spend crypto assets for everyday purchases. As global interest in digital currencies continues to accelerate, 5 in 10 people (50 percent) in the UAE say they plan to use cryptocurrency in the next year, with more than half (63 percent) noting they are more open to using it than they were a year ago. Earlier this year, Mastercard announced that it will start supporting select cryptocurrencies directly on its network.
Biometric payments are more trustworthy Perceptions of safety and convenience have been front and centre for people over the past year. Fifty-five percent of UAE consumers say they plan to use biometric verification methods like gait or walk assessments and fingerprint authorisation. In fact, over 6 out of 10 people (68 percent) feel safer using biometrics to verify a purchase than entering a pin.
QR Codes are cleaner and more convenient Consumer desire for clean and convenient ways to pay will remain post-pandemic. Fifty-six percent of people in the UAE expect to use more payment technologies like QR codes in the next year. Consumers also find that that QR codes are cleaner (68 percent) and more convenient (69 percent) for in-person payments and have a significant potential to reduce cost of payment acceptance and increase financial inclusion
Digital wallets surge in popularity The UAE being a standout market in the region in the proliferation of digital wallets has seen the technology surge in popularity. Sixty-six percent of UAE consumers said they were likely to use digital wallets next year. Fifty-seven percent of shoppers even say that they feel safer storing their card information in one place such as a digital wallet.
To meet people’s demands, businesses forced to jump into emerging payment trends
With consumer interest around new payment technologies, the expectation for businesses to adapt for the long-term is here to stay. Over three in four UAE consumers (76 percent) say that they prefer to shop more at small businesses that have both an in-person and online presence. Furthermore, 78 percent noted being more excited to shop at retailers that can offer the latest payment methods and an equal proportion (78 percent) said they would be more loyal to retailers who offered multiple payment options.
As one way to address this consumer preference for fast, touch-free payment experiences, many merchants are turning to contactless payments. Nearly 88 percent of in-person transactions are now contactless in the UAE as most merchant categories saw an increase as a share of total in-person transactions year-on-year in the first quarter of 2021.
This behaviour shift has been reinforced by the desire for consumer choice – with 83 percent saying that they expect to make purchases when they want and how they want. The businesses that can provide multiple ways to shop and pay are best positioned to meet these expectations. As the demand for emerging payments and choice continues, it requires a wider range of payment solutions, insights and products to meet the accelerating enthusiasm for the future state of pay.
The Mastercard New Payments Index was based on online interviews of 15,569 consumers in 18 countries, with 1,000 respondents per country in Australia, India, Thailand, the US, Canada, Brazil, Mexico, the UAE, Egypt, Saudi Arabia, Nigeria, Kenya and South Africa. Five hundred respondents per country were interviewed in in Argentina, Chile, Colombia, Peru and the Dominican Republic. The interviews were conducted between February 26 and March 10.
Key UAE findings
- 90 percent of consumers have access to more ways to pay compared to this time last year
- 3 out of 4 consumers say digital payments methods help them save money
- 3 out of 4 shoppers say they are more loyal to retailers who offer multiple payment options, and would shop at small businesses if offered more diverse ways to pay
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