Jeddah- Payments through smartphones have begun to spread in many countries in the world due to some advanced features, allowing people to benefit from a secure and reliable payment processes.
In the same time, cash transactions have been costly compared with e-payment, which has urged countries to further adopt it as a way to pay for goods or services.
The cost of paper or cash transactions ranges between 1.25% and 2.0% of a country’s GDP. In the United States, which enjoys a $16.5 trillion GDP, the annual cost of cash transactions has reached around $200 bn.
In the United Arab Emirates, cash transactions currently represent 75% of the total transactions; however, the UAE is taking quick steps toward the transformation to a non-cash community. Consumers’ expenditure is expected to increasingly depend on e-payments through smartphones, thus providing more efficiency and security, and targeting all the sectors of the community.
*Saudi Arabia and the United Arab Emirates
A report issued by Payfort “State of Payments 2016” has showed that the biggest growth of electronic payments in the Arab region has been in Saudi Arabia, followed by the UAE and Egypt, along with modest growth in Lebanon and Qatar.
According to the same report, Saudi Arabia has also topped the list of travel reservations, while the UAE and Egypt have led the sectors of leisure and entertainment.
Payment platforms through smartphones provide secure and easy payment solutions that include the use of “Near Field Communication NFC” technique and “Quick Response Code” QR Code among users who own mobile portfolios and merchants who use mobile points of sale.
A report for McKinsey shows that solutions of technical support in the financial and banking sectors have expanded, as it expects e-payments to reach $2 trillion worldwide by 2020. Companies like Paypal, considered one of the most prominent gates of e-payment through internet has become the reliable base for many consumers who use financial products, while banks have adopted banking solutions through smartphone devices to respond to their clients’ needs.
Emerging markets, including the Middle East represent 90% of the ongoing growth of mobile phones sector. Domestic innovation capacities in the GCC countries indicate that the constant advancement in the UAE will make it the main supporter of the financial and banking sector.
Mobile phones applications are expected to change the scene in the financial and banking sector worldwide. Many apps that are being developed in the emerging markets push clients to call for more easy and flexible measures, which will enhance the capabilities of these markets on competing in the innovation phase.