The world is moving towards cashless payment systems. The United Arab Emirates is not exempt from this global trend.
The 2023 FIS Global Payments Report estimates that credit cards accounted for 41% of the value of online e-commerce transactions in the UAE in 2022. Digital wallets had a 24% share, and debit cards 11%.
Likewise, credit cards accounted for 40% of the point-of-sale (POS) transaction value. Cash took the second biggest share at 18%.
That said, the UAE has yet to transition to a 100% cashless society. Until then, corporate cash collection remains relevant to UAE businesses.
Why Provide Customers With Cash Payment Channels?
Credit cards may be gaining a greater market share of e-commerce and POS transaction values, but credit card penetration is far from 100%. Statista estimates it’s 28.86% in 2024.
Digital wallet use is more widespread because of the robust internet infrastructure in the UAE. A Mondaq article claims that 67% of UAE consumers use digital wallets to pay for purchases. Still, 67% is not 100%.
Cash persists as a significant and relevant mode of payment in the UAE and will continue to do so in the next few to several years. Faced with such a reality, UAE businesses need to keep providing their customers and clients with cash payment channels.
Therefore, stores must continue to accept cash payments at points of sale. Online shops and service providers must also work with a cash payment service provider, preferably an exchange company with numerous branches nationwide, to collect cash payments at physical locations from those who’d prefer to use cash to pay for purchases and settle their bills.
Use Cases of Cash Payment Collection Services
Cash payment collection services can cater to a wide range of industries. Here are some notable use cases:
1.Government Departments
Government departments can work with corporate cash collection services to collect utility payments and government service fees. For instance, the Dubai Department of Economic Development can collect license issuance fees through cash payment service providers.
2.Educational Institutions
Schools and universities can streamline the payment of tuition and miscellaneous fees by collaborating with these services. This is convenient for parents and students who won’t have to queue at the school. They can pay over the counter at any branch of the school’s corporate collection service partner.
3.Telecommunications Companies
These services enable telecom companies to offer their customers an additional, convenient option for paying their bills, catering to those who prefer paying over the counter. Telecom companies can provide this convenience without needing to put up physical branches or stores just to receive cash payments.
4.Restaurant Chains
Restaurant chains can use integrated collection services to collect revenues from branches and franchisees efficiently. This ensures streamlined financial operations across multiple locations.
5.E-Commerce Enterprises
E-commerce businesses can broaden their customer base by offering a “pay-at-branch” option. Customers without access to digital payment methods can shop online and pay offline using unique reference IDs or printed invoices, bridging the gap between online shopping and cash payments.
6.Delivery & Logistics Companies
A corporate collection service can simplify payment collection for delivery and logistics companies and make managing and tracking daily delivery cash flows easier. Delivery drivers can simply deposit cash-on-delivery proceeds at designated cash collection branches.
7.Retail Shops
Retailers, especially those with online portals, can partner with integrated service providers to receive payments for goods sold online and manage cash deposits from outlets like branches, agents, and franchisees.
8.Travel and Tourism Providers
Travel agencies, airlines, and tourism companies can facilitate easy payment options for bookings and services at physical cash collection branches. This offers flexibility to customers who prefer or need to pay in cash when they book their next Dubai holiday destination.
Provide Cash Payment Channels
The world is getting increasingly accustomed to cashless payments, but the world is not completely cashless yet. In the meantime, businesses must provide customers the option to pay for their purchases and settle their bills with cash.
