Cash in UAE: Why It's Still Used
Cash Usage in UAE: When and Why Residents Choose Cash?
The rise of digital payments in the United Arab Emirates (UAE) has significantly changed payment habits over recent years. Visa's latest research, the second edition of the "Where Cash Hides" study, highlights that while cash use is declining, it still plays a significant role in certain areas. Let's take a closer look at the situations in which residents prefer cash and the trends shaping payment habits in the UAE.
Why is Cash Still Popular in the UAE?
According to the research, the most common reasons for cash use include simplicity, speed, and acceptance. UAE residents particularly use cash in the following situations:
1. Tips and Smaller Transactions
Although the cash payment of tips decreased by 4 percent in 2024, it is still used 51 percent of the time. This habit is partly due to the direct connection and the convenience of immediate payment.
2. Taxi Services and Public Transport
Everyday situations like paying for taxi or bus fares are still largely based on cash transactions, as these services are simple and widely accepted with cash.
3. Money Transfers Among Friends and Family
Cash remains a favored method for immediate money exchanges, such as among family members or friends. While cash P2P transactions decreased by 10 percent compared to the previous year, they still account for 33 percent.
4. Markets and Small Shops
In local markets, such as farmer's markets or smaller stores, cash continues to be popular due to quick transactions.
The Rise of Digital Payments: The Decline of Cash
Although cash still plays an important role in certain segments, the rise of digital payments is notable. The following trends indicate the decline in cash use:
a. International Transfers: The proportion of cash transfers fell back to 27 percent from 40 percent in 2023.
b. Rent Payments: Cash rent payments also decreased from 25 percent to 16 percent.
c. Everyday Expenses: In these transactions, cash use decreased by 2 percent, down to 25 percent.
Dubai Cashless Strategy aims to digitalize 90 percent of transactions by 2026, which will strengthen local businesses and consumer experience.
Why Doesn't Cash Disappear Immediately?
According to the Vice President responsible for Visa UAE, although digital payments are rapidly spreading, cash still plays an important role in certain situations, such as for tips, friendly financial exchanges, or in smaller shops. According to the research, for 61 percent of respondents, only 1-2 out of their last ten transactions were made in cash.
The digital maturity of UAE residents, the government's cashless strategy, and the innovations by fintech companies all contribute to the decline in cash usage.
Summary
Cash usage in the UAE shows a declining trend, yet in certain situations—such as tips, taxi rides, or friendly financial dealings—it remains popular. Government initiatives and technological development have increasingly dominated digital payments, but the complete disappearance of cash is not yet expected. The dynamic payment habits of the UAE reflect the country's modern and continuously developing economy.
