The global payments landscape is shifting from a cash-led economy to a digitally-driven ecosystem, accelerated by the Covid-19 pandemic, and e-payments services are seeing a surge in demand.
A comprehensive financial framework, robust digital infrastructure, and high smartphone penetration have encouraged a wider adoption of digital payments technologies across the UAE, said Sean Wang, founder and CTO of PayBy.
The UAE’s digital economy, in line with global trends, is booming as non-cash transactions via credit and debits cards and e-wallets grow, he explained. A study by Visa revealed that over 90 per cent of UAE consumers planned to use digital payments as much or more in the future.
Fintechs are playing a key role in enabling this shift with more secure, convenient, and inclusive payment solutions. As a key fintech player in the market, Wang noted that PayBy is witnessing a wider adoption of mobile wallets to carry out everyday transactions such as mobile phone top-ups, utility bill payments, taxi fare payments, grocery shopping, and peer to peer transfers.
Wang also pointed out that the Covid-19 pandemic was a big boost for digital payments globally, as well as in the UAE. Mastercard reported over a billion more contactless transactions worldwide during the pandemic period compared to pre-pandemic times. A survey by Mastercard in 2021 also revealed that over 90 per cent of UAE consumers were likely to consider using new payment methods.
“This shows that there is a growing interest in emerging digital payments technologies,” he said. Many small and medium businesses are considering transitioning to digital payments for a more seamless checkout experience. Interestingly, the UAE’s unbanked sector, which accounts for over 30 per cent of the country’s working population, is migrating to digital payments, giving the entire ecosystem a further boost. This is a positive step because cash payments are not convenient, safe and hygienic, and traditional bank card payments are not 100 per cent secure either.”
According to a study conducted by Visa in 2021, 19 per cent of UAE consumers had experienced credit card fraud. In instances where criminals make fraudulent purchases using a stolen card, chargebacks or cardholder disputes based on charges on their cards, can become difficult for merchants to prove. Furthermore, when transferring money using debit cards, users need to enter the beneficiaries’ card information, which can be cumbersome; beneficiaries also can’t receive the money immediately.
Wang revealed that the PayBy e-wallet addresses many of these pain points. Users don’t need to worry about card information being leaked or stolen anymore, since they pay with a secure dynamic QR code. The QR code generated by PayBy is based on tokenisation – widely acknowledged as a more secure payment method as it allows the payment to be processed without exposing sensitive payment information.
“What’s more, the QR code is dynamic, not a static one, so users don’t need to worry about their payment QR code being copied and misused by others. For peer-to-peer transfers, users can transfer money to their friends only by entering their mobile number, and the recipient can receive the money instantly,” said Wang.
PayBy can identify and evaluate the risk of the transaction with AI technology and big data, based on the information that the user authorised. According to different risk levels, PayBy will verify the transactions in different methods, including fingerprint verification, face recognition, and other biometric identification technologies.
PayBy currently covers high-frequency payment scenarios at supermarkets, pharmacies, restaurants, taxis, as well as online services including mobile top up, utility and peer-to-peer transfer. People who do not have an Internet connection can still purchase items in a store through the PayBy dynamic payment QR code on their phones. The PayBy e-wallet also allows users to get a daily cashback based on their PayBy balance, which they can use to make payments.
For business owners and enterprises, PayBy provides a suite of payment solutions, including software and hardware devices, like PoS machine, payment gateway and e-commerce plug-ins. These are suitable for all types of businesses – from salons to taxis, grocery stores, pharmacies and hypermarket chains, enabling them to carry out efficient and secure cashless transactions. Wang said that there are also plans to launch remittance services in the near future.
“It is only a matter of time before society transitions to a more convenient, safer and secure cashless ecosystem,” he said. “The UAE has historically been a cash-driven economy. But the emergence of fintechs and other non-banking entities in the region has provided ample opportunities for the payments industry to flourish. Fintechs have been expanding their portfolio to offer one-stop shop payment services using contactless technology, QR codes, or cryptocurrency.”
For consumers, this means enhanced financial inclusivity and they can pay, shop, save, and earn, all in one app, making the entire process incredibly convenient, fast and safe. For enterprises, especially SMEs, technology such as QR Code-based products translate to a lower cost of doing business and greater liquidity. Merchant products from fintech companies charge lower fees and offer a wider variety of product types to match their specific business requirements.
Wang noted that PayBy shares the UAE Government’s vision for digital inclusion and financial literacy as a stepping stone to a robust digital payments ecosystem. “We believe we can do this by connecting more customers and merchants with our suite of products. Considering that card payments are very popular in the UAE, we are working with acquiring banks to accept card payments too, to fit users’ payment habits.”
“Expats form 90 per cent of the total population in the UAE, with a significant part of them using e-wallet products in their home countries,” he added. “Looking ahead, we plan collaborations with e-wallets from other countries, such as India, the Philippines, and China, so those e-wallets can be used in the UAE and PayBy, in turn, can also be used in other countries. This will support an inclusive cashless economy and accelerate digital transformation in the UAE.”