While the UAE is at the forefront of digital payments, around a quarter (23 per cent) of transactions of consumers surveyed are still in cash, according to the second edition of Visa’s ‘Where Cash Hides’ research.
The research, based on a survey of 2,800 individuals across GCC, examined the overall frequency of and motivations for cash usage.
It identifies cash-heavy categories and proposes easier, more secure digital payment solutions for both consumers and local businesses. The first edition of Visa’s Where Cash Hides was conducted in 2023.
UAE cash v digital
- In the UAE, P2P transactions (33 per cent vs 43 per cent in 2023) and everyday spending (25 per cent vs 27 per cent in 2023) form the largest portion of cash usage
- Within the P2P segment, tips (51 per cent down from 55 per cent), and money exchanges between friends and family (39 per cent down from 50 per cent) are the prime areas where surveyed UAE consumers use cash. International transfers through exchange houses (27 per cent vs 40 per cent) and rent (16 per cent vs 25 per cent) saw the most significant declines from 2023, indicating progress in digitising payments in those categories
- For everyday spending, 44 per cent of surveyed consumers said they used cash for farmers markets (no change from 2023), followed by offline taxi (32 per cent vs 46 per cent) – which saw the biggest drop from the first wave – and public transport (metro, buses) (27 per cent versus 23 per cent)
The top reasons respondents prefer cash for P2P are habit (23 per cent) and acceptance (20 per cent) and, for everyday spends, speed (24 per cent) and acceptance (23 per cent) were cited as the top reasons.
Efforts to introduce convenient and secure solutions such as Visa Direct (P2P, tips and other disbursements, and remittances), Click to Pay (better online checkout experience), and Tap to Phone (low-cost acceptance solution for SMBs, freelancers and taxi) will further drive digital payments and increase card acceptance in the categories identified.
Encouraging mobile and contactless payments also presents a pathway to increasing digital payments usage for everyday expenses. This requires education on acceptance and security of digital payments for both banked and unbanked populations.
Salima Gutieva, Visa’s VP and Country Manager for UAE, said: “Despite progress with digital payment adoption in the UAE, 23 per cent of consumer transactions are still in cash. For Visa, this represents an opportunity to further drive financial inclusion and digitise commerce in the country. Our second edition of Visa’s Where Cash Hides research pinpoints precisely where and how Visa, together with our partners, can help grow the digital economy.
“We remain committed to supporting the UAE government’s cashless agenda – such as initiatives like Dubai’s Cashless Strategy aiming for 90 per cent digital transactions by 2026 and enabling local businesses in creating a better payment experience for everyone, everywhere in the UAE.”
Despite cash usage, the overall reliance on cash continues to remain low. For 61 per cent of respondents, only one or two out of their last 10 transactions were in cash.
Only 3 per cent of respondents claimed that all 10 out of their last 10 transactions were made with cash.
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