<a href="https://www.thenationalnews.com/business/money/six-in-10-uae-consumers-favour-a-cashless-economy-1.1062268" target="_blank">Cash is decreasing in use </a>around the world, with digital wallets, <a href="https://www.thenationalnews.com/business/money/2023/04/05/why-paying-the-bare-minimum-on-a-credit-card-costs-you-thousands/" target="_blank">credit and debit cards </a>and <a href="https://www.thenationalnews.com/business/money/2022/06/07/apple-jumps-on-buy-now-pay-later-bandwagon-with-apple-pay-later/" target="_blank">buy-now-pay-later solutions </a>substituting physical money, a new report has found. <a href="https://www.thenationalnews.com/business/technology/2022/01/13/more-than-half-of-uae-consumers-plan-to-be-cashless-by-2024-visa-report-finds/" target="_blank">The UAE is no exception to this trend</a>, with credit cards the most popular way to pay for e-commerce transactions last year, according to the <i>FIS Global Payments Report 2023</i>. Credit cards accounted for 41 per cent of <a href="https://www.thenationalnews.com/business/money/2022/07/19/global-tokenised-payment-transactions-to-surpass-1tn-by-2026-as-one-click-services-grow/" target="_blank">e-commerce transaction values in the UAE </a>and debit cards represented 11 per cent, it said. Wallets were the UAE's second-leading payment method online, accounting for 24 per cent of transaction values, up from 23 per cent in 2021, the report revealed. Cash on delivery accounted for only 7 per cent of e-commerce transactions last year. “A similar picture emerges at point of sale [POS], where credit cards were responsible for 40 per cent of transaction value, with debit cards earning 17 per cent share,” the report said. “Cash accounted for 18 per cent share at POS. Wallets are growing even faster at POS, growing from 13 per cent share in 2021 to 16 per cent share in 2022. “Consumers in the UAE can choose from among the world’s biggest wallet brands, such as Alipay, Apple Pay, Google Wallet, Samsung Wallet and WeChat Pay, as well as domestic wallets like Careem Pay, e& money [Etisalat Wallet] and Payit.” Globally, the Covid-19 pandemic spurred the faster adoption of digital payments, particularly contactless payments, due to heightened awareness about the spread of the virus through banknotes and coins. Almost two thirds of people in the UAE, or 64 per cent, <a href="https://www.thenationalnews.com/business/money/uae-consumers-expect-a-fully-cashless-society-by-2030-1.1084827" target="_blank">expect the country to become fully cashless by 2030</a>, according to a 2020 poll by Standard Chartered. The Emirates also <a href="https://www.thenationalnews.com/business/money/2021/07/07/uae-eighth-in-global-ranking-of-most-cashless-economies/" target="_blank">ranked as the eighth most cashless society in the world</a> in 2021, according to a report by UK-based price comparison website <i>Money.co.uk.</i> Although still in its early stages, the buy now, pay later model is growing fast in the UAE, the GPS 2023 report found. In the UAE, BNPL doubled its share of transaction values to 2 per cent last year from 2021. “The UAE is a centre of BNPL development, with domestic BNPL providers such as Cashew, PostPay, Spotii and Tabby competing with regional providers like Saudi Arabia’s Tamara,” according to the research. The report projected that BNPL would continue to grow in the UAE's e-commerce sector at a compound annual rate of 37 per cent through to 2026. BNPL is also the Middle East and Africa’s fastest-growing e-commerce payment method. It is estimated to grow at a compound annual rate of 43 per cent in MEA through 2026, the report said. Meanwhile, the MEA also recorded a dramatic decline in the use of cash at POS transactions, falling to 43 per cent last year from 73 per cent in 2018, the report found. It projected that the share of cash transactions would fall to just 29 per cent by 2026. “The shift from cash is mirrored by the rise of digital and mobile payments, which is driven by governments, banks and FinTechs,” the report said. “Mobile money transaction values in 2021 grew fastest in the Middle East and North Africa [49 per cent], followed by Sub-Saharan Africa at 40 per cent, according to GSMA.” Consumers across the MEA also prefer to use digital wallets to make payments. Already the second-leading online payment method in MEA with a 20 per cent share of transactions, digital wallets are set to grow at a 25 per cent compound annual rate through to 2026, when they are expected to attain a 27 per cent share of e-commerce transaction values, according to the report. A similar story is unfolding at POS transactions, with wallets projected to nearly double their share to 24 per cent by 2026, from 13 per cent last year. Despite a lower penetration in MEA due to religious reasons, credit cards still command the highest share of regional e-commerce transaction values at 31 per cent and are projected to maintain this share through to 2026. Account-to-account transfers are the third leading e-commerce payment method after credit cards and digital wallets, making up 18 per cent of regional e-commerce transaction values in 2022, the report said.