All banks in the UAE will be offering the mobile wallet (mWallet), which once implemented will reduce the use of cash by Dh50 billion in the next five years, according to a report by UAE Banks Federation (UBF).
“The mWallet is a critical initiative which is expected to be an important catalyst for the future of the digital economy as it benefits the financial services component of the Smart Government initiative,” the federation said.
Following extensive groundwork laid by the UAE Banks Federation, the mWallet project was approved for implementation in May 2015. Developed with the help and support of the UAE Central Bank, who published the first draft of the Digital Payments Regulatory Framework and through multiple workshops with the Smart Government National Trusted Service Manager, the project is backed by 17 top banks that will provide the required infrastructure and lead the launch campaign.
The federation, however, says that mWallet service will be offered by all banks, and not only the 17 shareholding banks, through a membership scheme to enable wide use and acceptance.
Currently, plans are underway to upgrade merchants with devices that will be able to accept payments from the mobile wallet, expecting to switch from cash to mobile wallet for at least Dh50 billion (35 per cent market share) within five years.
Mobile Wallet uses near-field communication chips inside mobile smart phones and tablets to transmit payment information. When a customer is ready to pay using a mWallet, they open an app on their smart phone or other device followed by the customer entering a PIN and selecting the payment account they wish to use, along with any special offers or customer reward programs they want to apply.
At the time of payment, they simply tap their device to an enabled payment terminal, and the payment information is transmitted. The mWallet will facilitate digital payments, such as payments of utility bills and sending remittances and will help reduce the workload on physical branches.
On Wednesday, Smart Dubai Government, the technology arm of the Smart Dubai Office, said that smart initiatives and services plan, launched in 2003, had enabled the government of Dubai to record savings worth Dh4.3 billion.