Digital payments could bring $2.2bn to Dubai
Visa study shows benefits of wider adoption of digital payment could benefit businesses, government and consumers
Dubai could gain a net benefit of $2.2bn if all city residents used digital payments as intensively early adopters, according to a new study commissioned by Visa.
The study suggests that savings in time, reduced transaction costs, reductions in fraud and increased economic activity could deliver $2.2bn in benefit as well as an increase GDP, productivity and employment.
The benefits are mainly to business, which could gain $1.5bn, although government would also stand to gain $500m and consumers $200m, if all of the city used digital payments in the same way as the top 10% of users, who currently use digital payment options for around 80% of their daily spending.
Shahebaz Khan, Visa's Country Manager, UAE, said: "Dubai currently stands at the threshold of becoming a digitally advanced city, and with the government driving the Smart City agenda in both the public and private spheres, we can expect the transition to happen sooner rather than later. The benefits that a cashless society would bring to its economy are significant and, as a global leader in smart payments, Visa stands well positioned to enable the circulation and adoption of smart money, innovating with the government, banks, merchants and consumers alike, to achieve that transformation."
The study, ‘Cashless Cities: Realizing the Benefits of Digital Payments' was conducted by Roubini ThoughtLab on behalf of Visa. Usage patterns of digital payments and other factors were studied closely in a sample of six cities worldwide, and the projected benefits were then calculated for 100 cities in 80 countries.
The study indicated that Dubai is a ‘digitally maturing' city for digital payments, with moderate availability of digital payment infrastructure, but low to moderate usage of digital payments.
The report also offers over 60 recommendations for all ecosystem participants, including policymakers, to help their cities become more efficient through greater adoption of digital payments. These include undertaking financial literacy programs to help move the unbanked into the banking system, implementing incentives to stimulate innovation focused on scaling new payment technologies, and introducing secure open-loop payment systems across all transportation networks.
"The Dubai government, under the leadership of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has always been forward-looking and embraces the benefits of digital payments as it continues to push for a cashless reality. Our study quantifies the potential that cashless payments bring to Dubai, and we continue to innovate and work as a strategic partner of the government to help realize its smart city ambitions," added Majeed Hujair, Senior Director, School of Public Policy for Central and Eastern Europe, Middle East and Africa (CEMEA), Visa.
The results were revealed on the 7th day of UAE Innovation Month at the Visa Innovation Center in Dubai, one of the world's five state-of-the-art Visa Innovation Centers. The four thousand square-foot facility serves as an innovation hub for the CEMEA region, where Visa collaborates with public and private entities to design, build and implement the latest innovations in payments technologies.