Thursday, May 16, 2013
Dubai: Mobile phones are emerging as a popular tool to make effortless purchases and may just replace conventional credit or debit cards in the future.
Majority of the consumers or about 85 per cent of the population in the UAE and Gulf region are still using cash or cheques, but experts in the payments technology sector said that smartphones are becoming a preferred payment tool for the younger generation.
There are about 1,000 payment terminals in some restaurants, coffee shops and other retail locations in the UAE that currently accept mobile phones for payment transactions, and there have been discussions to make the same machines available at petrol stations, cinemas and supermarkets.
Once the deployment of these machines increase and more people know about contactless payments, experts said the take-up will increase. “I think it is fair to say that mobile phones are becoming the convergence device of the future given the capability of mobile phones for interfacing with sound, visuals, technology and it’s a device which is portable,” R Sivaram, senior vice president and cards business head of Emirates NBD told Gulf News.
Paolo Zambonini, executive vice president for product and marketing at Network International, said the high penetration of mobile phones in the market will also drive the shift from plastic to handsets. “Mobile phones have become really ubiquitous, and their usage is widespread in the UAE, with most young people owning more than one phone. Given the security, convenience and acceptance of mobile phone payments, there is a considerable shift from cash to cards to mobile phones in most places,” Zambonini told Gulf News.
“Additionally, with mobile phones offering the facility to meet all kinds of payments- from small-ticket items like grocery bills or movie tickets to large purchases or mortgage payments - they are fast becoming the payment tool of choice. This trend has been particularly witnessed in many emerging market economies like Africa, South America and Asia.”
“While they may not entirely replace cash or card payments, mobile phone payments are becoming increasingly popular particularly because they allow people to make payments at their own convenience without having to access a computer or the internet,” he added.
A study conducted by Elon University’s Imagining the Internet Centre and Pew Research Centre’s Internet and American Life Project showed that 65 per cent of the internet experts and users believe that most people will use handsets as a payment tool and largely replace cash and credit cards. However, 33 per cent still think that the use of near-field communications devices is not secure.
Sivaram agreed that security concerns are one of the major reasons why the use of mobile phones for payments has yet to gain huge traction. “The ability to pay with mobile devices is technically there but it’s not widely launched yet because there are a couple of considerations. While the young generation is more comfortable with the concept, the older ones are still wary about trying out new things such as this,” he added.
By Cleofe Maceda Senior Reporter
Gulf News 2013. All rights reserved.
