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Digital Payment Systems Security Measures in United Arab Emirates: Trends and Insights
The COVID-19 pandemic has accelerated a shift towards digital payments in the United Arab Emirates (UAE), with the total value of digital payment transactions more than doubling to reach $18.5 billion in 2020, according to fintech giant Stripe.
Consumer Expectations and Preferences
Consumers in the UAE are rapidly embracing online shopping, new and flexible digital experiences, and contactless tap-and-go payments. A recent study by Mastercard found that:
- 66% of UAE consumers have tried a new payment method they would not have tried under normal circumstances during the pandemic
- 97% will consider using at least one emerging payment method, such as cryptocurrencies, biometrics, contactless or QR code, in the next year
Contactless Payments Surge
The popularity of contactless payments has surged in the UAE, with mobile wallets and other contactless payment methods recording strong growth. Emirates NBD reported a 59% increase in contactless payment transactions in 2020, while mobile wallet-based payments using Apple Pay, Samsung Pay and Google Pay more than doubled.
Biometric Payments Gain Ground
With cybercrime and identity theft on the rise, biometric payments are gaining traction in the UAE. Many banks and financial institutions are now offering biometric authentication options, such as facial recognition and fingerprint scanning, to enhance security and convenience.
Cryptocurrency Gains Acceptance
The 2020/2021 cryptocurrency market bull run has led to renewed interest in cryptocurrencies as a payment method. A recent survey by Mastercard found that:
- 63% of respondents in the UAE are more open to using crypto than they were a year ago
- 50% plan to use crypto for everyday purchases
Regulatory Developments
The Dubai Financial Services Authority (DFSA) is currently drawing up a framework for regulating digital assets, including cryptocurrencies, while the Abu Dhabi Global Market (ADGM) launched its crypto asset regulatory framework in 2018. The UAE Central Bank has also issued new regulations on Stored Value Facilities, allowing both crypto assets and virtual assets to be used as a stored value.
Security Measures
To combat the increasing threat of cybercrime and identity theft, financial institutions and payment service providers are implementing robust security measures, such as:
- Machine learning-based risk assessment
- Authentication protocols
- 3-D Secure (3DS) protocol
- Biometric authentication
- Advanced mobile wallet solutions
Netcetera, a Swiss software company, offers a range of secure and easy-to-integrate solutions for digital payments.
Conclusion
The UAE is at the forefront of adopting new payment technologies and security measures to enhance customer experience and protect against cyber threats. As digital currencies and blockchain technology become increasingly mainstream, it is essential for financial institutions and payment service providers to stay ahead of the curve and invest in robust security infrastructure to safeguard their customers’ transactions.