The UAE was the first in the Middle East to embrace Samsung Pay solutions as it chases its dreams of becoming a cashless society by 2020, and banks are taking it one step further.
RAKBANK, which offers Shariah solutions through RAKislamic, was one of the six banks in the UAE to introduce contactless and cashless payment solutions through Samsung Pay back in April; but the bank beat its peers by being the first not only in the UAE but in the entire Middle Eastern region to integrate the South Korean technology for its ATMs.
Implemented in partnership with Samsung Gulf Electronics, the digital solution allows RAKBANK’s customers to make cardless cash withdrawals from its ATMs using certain Samsung smartphones.
“Currently, RAKBANK is taking a phased-out approach and shall begin by targeting ATMs that have strong footfall in locations such as Dragon Mart 2, Wafi Mall and City Center Me’aisem. Soon, customers will be able to use Samsung Pay solutions on most of the bank’s ATM network,” said Peter England, the bank’s CEO.
Back in April, RAKBANK along with Mashreq, Emirates NBD, National Bank of Abu Dhabi, Abu Dhabi Commercial Bank and Standard Chartered (all of which cater to the Muslim market as well), were the first banks in the region to adopt Samsung Pay – based on Near Field Communication and Magnetic Secure Transmission technologies, the highly secure service integrates fingerprint authentication, card tokenization and Samsung’s defense-grade mobile security platform, Samsung KNOX. The technology, however, is only applicable to Mastercard holders.
Samsung choosing the UAE as its first Middle Eastern market to roll out its digital payment solution does not come as a surprise – the Emirates after all boasts the highest level of smartphone penetration in the world at 80.6%, according to Newzoo. Mastercard also identified the UAE as among those most rapidly transforming away from being a predominantly cash-based society.
A key driver behind the UAE’s swift evolution is the steely determination by the government to promote electronic payments in support of a wider national agenda (Vision 2021). The government was the first of its Arab neighbors to introduce an electronic payment system such as e-Dirham, a tool to facilitate the collection of revenues of governmental and non-governmental service fees in a safe and secure manner. Over AED2.5 billion (US$680.51 million)-worth of federal government revenue was collected through e-Dirham in the second quarter of 2017, up by over 25% year-on-year. The number of transactions conducted over the system also increased from 9.97 million at the end of June 2016 to 10.84 million 12 months later.
The UAE Banks Federation is also in the final stages of forming Emirates Digital Wallet – jointly owned by 16 shareholding banks including the nation’s biggest Islamic banks such as Dubai Islamic Bank, Abu Dhabi Islamic Bank, Sharjah Islamic Bank and Al Hilal Bank – and is on track to introduce a society-wide cash transformation to digital.
According to Mastercard, 74% of consumer payments are still made on a cash basis, placing the UAE as a country just starting its cashless journey.
“However, with a Readiness score of 69, the UAE has eliminated many of the typical macroeconomic barriers of creating a cashless society,” noted Mastercard.