There are several payments you can use while shopping online. The most popular ones are bank cards, e-wallet, money transfer, direct debit, cryptocurrency, prepaid cards and buy now pay later.
The behaviour of consumers in the UAE changed in line with the region’s new reality: online shopping during lockdown was a necessity, and demand for contactless payments increased. Now a new normal, online shopping is a go-to, and payment methods are many and varied.
A study by Statistica revealed the four most common payment methods in the UAE in January of 2020 were cards(39%), cash (20%), e-wallets(18%) and bank transfers (16%). By June 2020, a Visa study in partnership with Dubai Economy and Dubai Police found that 49% of UAE consumers were opting to shop using e-commerce platforms. Three out of five people were using cards or digital wallets to make more payments online, instead of using cash on delivery.
The payment methods that can be used while shopping online have been tailored to meet the different requirements of users: traditional debit and credit cards remain dominant, digital wallets provide a seamless payment experience, and apps offering installments bring more flexibility.
Credit cards have been around since the 1950s, and are still going strong. Debit cards work much the same way, while promoting more responsible spending as they access funds that are readily available, rather than drawing on a line of credit. Cards are what many of us are used to, and a tried-and-true method for online and face-to-face transactions.
Paying with plastic is still the preferred method of payment for UAE residents according to Statistica, with contactless card payment methods making up 84% of face-to-face transactions. Linking wearable devices such as Apple or Garmin watches has increased the uptake, reducing the burden of carrying a physical card or having to retrieve it when a pay-on-delivery item arrives at the door.
E-wallets are becoming common with the growth of e-commerce ventures, mobile commerce applications, and online payment services. Just like customers are shifting their shopping experience to online platforms, they’re also shifting their cash balance to these digital wallets.
There are a lot of e-wallet apps around the globe such as Google Pay, Samsung Pay, Payit, and Apple Pay. These mobile wallets allow bank account holders to make online payments, store funds, and check transaction history from anywhere at any time. Plus the ability to make instant transfers, split bills with friends, make timely utility payments and more from one vibrant app on their smartphones.
Also, some startups especially in GCC like Postpay give customers the thrill of online shopping without having to pay upfront. Big-ticket items aren’t up for grabs, so homes and cars aren’t an option, but indulgences that may not fit into the budget are.
Rather than hankering after an item, or risking missing out on it in the time it will take to save for it, customers can opt to pay an item off in two or four bite-sized installments. Snapping up a must-have item suddenly becomes a lot more achievable – without the high-interest rates incurred by a credit card.