Convenience, not cash, is king in today’s transactions, and fintech makes it happen

In just two years, cash on delivery (COD) has gone from being a preferred method of payment to almost becoming obsolete. According to a survey commissioned by Checkout.com, today only 20 percent of UAE consumers use COD as a payment method for online purchases, compared to 40 percent in 2020 – one of the fastest conversions in technology history.

The speed of digital payment adoption can be partly attributed to the pandemic. With health concerns over physical contact, people of all ages were encouraged to move away from cash. While the pandemic sparked this trend, the convenience and ease of digital payments kept the fire burning.

Consumers quickly discovered that it made sense to send and receive cash through the devices we use to do just about everything. Convenience claimed that the throne’s physical currency happily lived on for millennia. We can now replace the expression “cash is king” with a more capable truth: “convenience is king.”

The report also reveals that 28 percent of UAE residents use digital wallets to send money to friends and family, illustrating the popularity of peer-to-peer transactions over traditional bank-to-bank transfers.

When most of our communication is done over text, from traditional SMS to WhatsApp, DM, Telegram and so on, it makes sense that our other transactions take a similar form.

Using Ziina, the UAE’s first customer-centric digital wallet, users can send or request money as easily as sending a WhatsApp message. For fun, users can tag GIFs and images on their payments. For the Middle East to transition to a cashless economy, the digitization of cash must follow the path the digitization of communications created what feels like ages ago.

There is also the issue of security. Digital and mobile wallets bring a unique security angle to the table: thanks to tokenization, consumers can make countless purchases from merchants while merchants never see their actual card information. Tokenisation provides merchants with a solution that allows them to securely process credit card payments from their customers while meeting security, compliance and credit card data reporting requirements.

For example, if you add your standard-issue credit card to your Apple Pay wallet, Apple records your primary account number and sends it to the card issuer to create a specific token for that card and device together. When you make a payment with the card through the digital wallet, the merchant only receives the payment token to authorize the payment, and never deals directly with your sensitive data.

The UAE has been laying the groundwork for digital payments at the government level for years. By ensuring that most bills can be paid via digital wallets, the country provided the seeds for this behavior to grow into a habit. As the 2010s ended with the explosion of crypto on a global level, the UAE recognized that digital wallets were here to stay.

They provided increased legislation for fintech companies to operate and scale legitimately, and welcomed the cashless era with open arms. With a variety of legal frameworks for fintechs embedding themselves in the economy just this year, I foresee another boom in the coming months as entrepreneurs respond to increased consumer demand for digital wallets.

For now, I’m talking in intervals of months. But if we continue on the path we’re on, we may envision a world where fintech developments take days, minutes or even seconds to reach consumers’ pockets. I am hopeful and excited about what is to come.