Cashless payments have been highlighted as a top priority in the UAE’s Vision 2021. There is now a move from internet to mobile banking. Blockchain technology is another area where growth and innovation is heading.
If you are running a business in UAE, it’s almost inevitable that majority of your sales are made using a method other than cash. That’s because for many people in the UAE, cash is dying. From paying for everyday things, restaurant meals, school dinner money, utility bills, business invoices and footing the cost of high-value purchases, residents in UAE are comfortable with swiping away their cards.
Cashless payment transactions are a popular trend in UAE. Proof of the growing trend was reported by Euromonitor International that UAE consumers splurged a whopping $59 billion (Dh216 billion) on goods and services using only their credit, debit and prepaid cards in 2017.
This figure accounts for 45% of all sales transactions at retail shops and other business outlets in the UAE – more than all the other payment types combined. By 2020, plastic money will clearly outdo cash as a preferred mode of payment, representing over 50% of all transactions.
Cash payments as reported were worth a total of $40 billion in 2017, accounting for just a third of all the transactions i.e. 32% and it is expected they will further decline from 32 to 26% by 2022.
If your business setup in UAE is online only, it’s quite unlikely that you take payment by cash. If you’re a traditional or hybrid business, the choices aren’t so clear cut. So if you are confused that should you go cashless altogether and stop accepting bills, coins, and checks; we are here to help you make the decision by listing down the benefits of going cashless.
Benefits for Business
1. Make Customer Service Faster and Easier
Using cash decelerates the process of you serving your customers and increases your staff overhead. Everything consumes more time such as customer getting to their wallet or purse, sorting through their bills, paying the amount, getting change and then the next customer and so on. Therefore, a debit card, credit card or contactless payment is much faster, convenient and efficient way of doing business in UAE.
2. Reduce Risk and Human Error
When it comes to cash, human error is possible whether from customer end while paying or from employee end when giving out incorrect change, and it can be costly. This error is completely removed if you move to a cashless payment system.
3. Easier Financial Management and Reconciliation
For businesses in UAE, conducting all transactions online removes the need for unnecessary accounting tasks such as administration work involved in counting and keeping track of cash. Credit and debit card transactions will be automatically reconciled and paid into your bank account within a few days of taking payment. This can enhance your cash flow and free up your finances, while lowering the administration overhead on your staff.
4. Reduction of businesses’ Overall Finances
Online software often updates finances in real time based on bank balance including deposited debit and credit card transactions which gives you greater insight on how your business is currently doing.
The time and resources you have saved by going cashless can be focused to be spent on other areas that need valuable work hours or to grow business.
5. Reduced Risk of Theft
Businesses benefit from the crime-busting aspects of a cashless economy. The prospect of cash theft recedes if there is no tangible money to steal whether by light finger employees or criminals breaking in and raiding your safe. So it is better to reduce your chances of losing money to theft by going to cashless transaction system.
6. Appeal to Customers Who Don’t Carry Cash
Millennial and the younger generation are more inclined towards digital wallet, contactless, and other payment methods. Incorporating new cashless methodology suggests that you’re a more innovative business, which could make you more appealing when it comes to attracting these technically-minded customers.
Benefits to Customers
Significantly Enhanced Payment Experience
Cashless payments in UAE offer customers a significantly enhanced payment experience. 74% of consumers surveyed by Visa imagine a faster payment experience when a Visa logo is displayed because it represents a simple, secure and seamless payment.
You will no longer need to carry heaps of cash, plastic cards, or even queue up for ATM withdrawals. It’s also a safer and easier spending option when you are travelling in UAE. It will be especially useful in case of emergencies e.g. in hospitals.
Go Cashless, Get Discounts
Banks in UAE often reward customers for continued use of their cards and build customer loyalty. An attractive reward card is a win-win situation: banks and retailers win a loyal customer who spends more by utilizing the most efficient way to pay. And consumers win with valuable benefits such as points or discounts in fuel, restaurants, malls, airline miles, insurance etc., together with a secure, convenient and reliable way to pay.
If you are planning to start business in Dubai or across UAE, get all the information and services related to company setup in UAE from our business consultants at Business Formation Dubai. Contact us or send your query at firstname.lastname@example.org.