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Contactless payments to top $8trn in 2024, say experts

DUBAI, September 2, 2020

The value of contactless transactions is set to nearly double the digital payments business from $4.4 trillion in 2020 to $8.26 trillion in 2024, according to research by Statista, a global market intelligence provider.

Of this $2.92 trillion are in digital commerce and $1.47 trillion worth of transactions will take place in the Mobile Point-Of-Sale (POS) payment channels this year. In 2024, the digital commerce sale value will exceed $4.11 trillion while Mobile POS payment will jump to $4.15 trillion.

In the Mobile POS Payments segment, the number of users is expected to amount to 1.74 billion by 2024. The number of users of the digital commerce channels will exceed 4.63 billion, the report says.

Businesses and retailers are shifting from brick-and-mortar to the digital space faster following the Covid-19 pandemic, officials and experts said at a virtual roundtable on Intelligent Retail Marketing organised by RetailME, the region’s only dedicated market intelligence provider in the retail sector.

According to Visa’s Back to Business study, 92 percent of the businesses surveyed in the UAE are shifting their business online or increasing its online presence, compared to 74 percent globally.

“More than 90 percent of the UAE consumers say they would switch to a new store that accepted contactless payments, compared to 63 percent globally,” Kalika Tripathi, Head of Marketing for the Mena Region, Visa, told audiences at the webinar.

“In fact, almost three in four or 72 percent of UAE consumers surveyed wouldn’t shop at a store that only offers payment methods that require contact with a cashier or other shared device, compared to 48 percent globally. More than 90 percent of UAE consumers surveyed have made changes to the way they pay for items due to Covid-19, primarily shopping only online when possible (59%), using contactless payment (52%) and not using cash as much (40%), compared to 78 percent globally.”

Consumer behaviour in the GCC countries has seen a drastic shift towards online payment following the outbreak of the Covid-19 pandemic.

“This says a lot about the consumer mindset. Digital payment experiences – especially contactless and eCommerce – are what consumers need and want right now. And as they experience the convenience and security of digital payments, it will become the norm,” Tripathi said.

“That is why it is crucial for businesses in the region, particularly those that still have cash-on-delivery as the primary mode of payment, to understand this shift in consumer expectations and plan accordingly. It is not only critical for businesses to survive COVID-19 but also to thrive in the future.”

Justina Eitzinger, Chief Operating Officer of Images RetailME and host of the Webinar, said: “In 2019, retail e-commerce sales worldwide amounted to $3.53 trillion and e-retail revenues are projected to grow to $6.54 trillion in 2022. Online shopping is one of the most popular online activities worldwide.”

“Through a series of webinars, we are trying to reflect on the changing retail landscape of the Middle East and help the retailers to develop the best strategy to navigate out of the crisis.

“RetailME has helped the retail industry stay well informed, up to date and learn from success stories. We have the maximum reach amongst the Who’s Who of retail in the region. RetailME is very respected and vouched for in the industry. Our coverage spans from the biggest retail entrepreneurs to the budding start-ups. RetailME through its digital, print and event platforms deliberates, connects and shares knowledge on AtoZ in retail!” Eitzinger added.

During COVID-19 many consumers in the Arab world and Africa are choosing online stores for their essentials such as groceries and pharmacy items for the first time, Visa said.

Two-thirds of UAE and Saudi consumers and 71 percent Kenyan consumers surveyed say that COVID-19 has led to their first online grocery shopping. The comparable number for the first-time online buyers from pharmacies stands at 70 percent and 69 percent in Kenya. – TradeArabia News Service




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