- “Cashless Cities: Realizing the Benefits of Digital Payments” indicates that by 2032, cashless payments could increase Dubai’s employment by 1.1% and generate over US$27 billion in additional economic activity for the Emirate
Dubai, UAE; 7 February 2018: Visa (NYSE:V), the world leader in digital payments, has revealed the results of an independent study, conducted by Roubini ThoughtLab and commissioned by Visa, examining the economic impact of increasing the use of digital payments in major cities around the world. The study shows that increased usage of digital payments, such as cards and mobile payments, could yield a net benefit of up to US$2.2 billion (AED 8.08 billion) annually to consumers, businesses, and government in Dubai.
The Dubai findings of the global study were revealed in support of UAE Innovation Month, which was launched by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to promote innovation through a series of initiatives by government and private sector organizations showcasing the most important innovative developments that contribute to the promotion of welfare among all members of society.
The study examines the economic impact of the use of digital payments in several global cities including Dubai. By reducing reliance on cash, the study estimates the immediate and long-term benefits for three main groups in Dubai:
- Consumers, who could save nearly US$200 million, from both time savings while conducting banking, retail and transit transactions, as well as a reduction in cash-related fraud;
- Businesses, which could achieve up to US$1.5 billion from time savings while processing incoming and outgoing payments, and increased sales revenues stemming from extended online and in-store customer bases; and
- Governments, which could save nearly US$500 million from factors including increased economic growth, and cost savings from administrative efficiencies.
The results announced are part of the global Visa report, “Cashless Cities: Realizing the Benefits of Digital Payments”, a unique study that quantifies the potential net benefits experienced by 100 cities across the globe, as they seek to significantly increase the use of digital payments over physical money. The study does not look at eliminating cash; rather, it examines the benefits experienced when a city moves to an “achievable level of cashlessness” - defined as the entire population of a city moving to digital payment usage equivalent to the top 10% of its users today.
Commenting on the results, Shahebaz Khan, Visa’s Country Manager, UAE, said: “Dubai currently stands at the threshold of becoming a digitally advanced city, and with the government driving the Smart City agenda in both the public and private spheres, we can expect the transition to happen sooner rather than later. The benefits that a cashless society would bring to its economy are significant and, as a global leader in smart payments, Visa stands well positioned to enable the circulation and adoption of smart money, innovating with the government, banks, merchants and consumers alike, to achieve that transformation.”
The study also estimated substantial benefits on Dubai’s economic drivers over the next 15 years with results indicating that by 2032, cashless payments could increase employment by 1.1% and generate over US$27 billion in additional economic activity.
“Cashless Cities: Realizing the Benefits of Digital Payments” offers over 60 recommendations for all ecosystem participants, including policymakers, to help their cities become more efficient through greater adoption of digital payments. These include undertaking financial literacy programs to help move the unbanked into the banking system, implementing incentives to stimulate innovation focused on scaling new payment technologies, and introducing secure open-loop payment systems across all transportation networks.
“The Dubai government, under the leadership of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has always been forward-looking and embraces the benefits of digital payments as it continues to push for a cashless reality. Our study quantifies the potential that cashless payments bring to Dubai, and we continue to innovate and work as a strategic partner of the government to help realize its smart city ambitions,” added Majeed Hujair, Senior Director, School of Public Policy for Central and Eastern Europe, Middle East and Africa (CEMEA), Visa.
The results were revealed on the 7th day of UAE Innovation Month at the Visa Innovation Center in Dubai, one of the world’s five state-of-the-art Visa Innovation Centers. The four thousand square-foot facility serves as an innovation hub for the CEMEA region, where Visa collaborates with public and private entities to design, build and implement the latest innovations in payments technologies.
Full findings of the study, as well as the online visualization tool can be found on www.visa.com/cashlesscities.
Roubini Thoughtlab, a leading economics and evidence-based research firm, surveyed 3,000 consumers and 900 businesses in 2016 across six cities (Tokyo, Chicago, Stockholm, Sao Paolo, Bangkok and Lagos) that represent different levels of digital payments maturity. These surveys examined the use, acceptance, and cost-benefit impact of physical and digital money. Researchers then extrapolated these survey results based on specific demographic and economic data to another 94 cities around the world to determine the net impact of moving toward a cashless economy on consumers and businesses in each location. Through other sources, the research was also able to identify expected impacts on government. Researchers used World Bank, Organisation for Economic Co-operation and Development, and other well-respected secondary data sources to augment the survey results and build the overall findings. An econometric model used by various central banks and other institutions – the National Institute Global Econometric Model (NiGEM) – was used to estimate the “catalytic” impacts (economic growth, productivity, employment and wages) that a move toward digital payments would have on each of the 100 cities analyzed. Visa commissioned the study. Roubini Thoughtlab independently conducted the surveys, managed the research and developed the analysis.
About Visa Inc.
Visa Inc. (NYSE: V) is the world’s leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network - enabling individuals, businesses and economies to thrive. Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. The company’s relentless focus on innovation is a catalyst for the rapid growth of connected commerce on any device, and a driving force behind the dream of a cashless future for everyone, everywhere. As the world moves from analog to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce. For more information, visit www.visamiddleeast.com or follow us on Twitter @Visamiddleeast.
For further information, please contact:
Erica Alkhfaji/Shaleen Sukthankar
Email: erica[email protected] / [email protected]