Despite the UAE’s prominent position in the digital payments landscape, a significant portion of consumer transactions — 23% — are still carried out in cash, according to the second edition of Visa’s Where Cash Hides research.
The study, which surveyed 2,800 consumers across the GCC, delves into cash usage patterns, motivations, and opportunities for further digital payment adoption.
Visa’s Where Cash Hides research
Visa’s research indicates that while cash usage has decreased in some categories compared to 2023, it remains prevalent in certain day-to-day transactions. In particular, peer-to-peer (P2P) payments and everyday spending still account for the largest share of cash transactions in the UAE.
Key findings from the survey:
- P2P Transactions: 33% of consumers surveyed still use cash for P2P transfers, a slight decrease from 43% in 2023. Key cash-based activities within this category include tips (51%, down from 55%) and money exchanges between friends and family (39%, down from 50%).
- Everyday Spending: While the overall use of cash in everyday spending has decreased, certain areas remain cash-heavy. For example, 44% of respondents still pay cash at farmers’ markets (no change from 2023), 32% use cash for offline taxis (down from 46%), and 27% for public transport (up from 23%).
Top motivators for cash usage:
- For P2P transactions, the primary reasons for cash use were habit (23%) and acceptance (20%).
- For everyday expenses, speed (24%) and acceptance (23%) were the leading factors driving cash usage.
Implications and Digital Payment Solutions: Visa’s study underscores the opportunity to further accelerate the adoption of digital payments, particularly through innovations such as Visa Direct, Click to Pay, and Tap to Phone. These solutions aim to make digital payments more accessible and secure, benefiting both consumers and businesses, especially in cash-heavy categories like tips, P2P exchanges, and small businesses.
- Visa Direct can simplify P2P transfers, tips, and international remittances.
- Click to Pay offers a streamlined online checkout experience.
- Tap to Phone provides a cost-effective payment solution for small businesses and freelancers.
Mobile and contactless payments
Additionally, promoting mobile and contactless payments can help increase digital transaction adoption for everyday expenses, with a focus on educating both banked and unbanked populations about the security and convenience of digital payments.
A Path Toward a Cashless Future: Salima Gutieva, Visa’s VP and Country Manager for UAE, emphasized that while digital payment adoption has made notable strides, there remains room for growth. “Despite progress, 23% of consumer transactions are still in cash. For Visa, this represents an opportunity to further drive financial inclusion and digitize commerce in the UAE,” she said.
Gutieva also highlighted the UAE government’s efforts to push for a cashless society, citing Dubai’s Cashless Strategy, which aims for 90% of transactions to be digital by 2026.
While cash use is still significant for certain types of transactions, the research shows that the overall reliance on cash is low.
For 61% of respondents, only 1-2 out of their last 10 transactions were in cash, and only 3% reported using cash for all 10 transactions. This demonstrates the continued shift toward digital payments, with Visa poised to support the UAE’s digital economy and help businesses transition to cashless solutions.
tanvir@dubainewsweek.com