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Why cashless payment is catching on in UAE

Banking|: Abu Dhabi: The idea of having a cashless society for payments and banking is no longer just a distant dream, but fast becoming a new reality here in the UAE, with the global pandemic accelerating the country’s drive towards such a new system according to Ramana Kumar head of payments and digital banking at First Abu Dhabi Bank (FAB). “People have started to see the value in [going cashless] and our customer transactions have picked up in terms of Ecommerce and digital payments,” he said. See more More residential options added at Dubai south residential district Trees, birds, ponds: Mexico City's ancient lake reclaims scrapped airport Abu Dhabi: 9 places where rents have dropped in the capital Photos: Thai airways opens aircraft themed restaurant With airline fleets grounded, plane recyclers bet on parts boom “In terms of branch transaction migrations we have seen a phenomenal change in that, and so today our digital channels cater to more than 90-95 per cent of our overall transactions, which is a marked shift in customer behaviour,” he added, also noting that a big portion of that digital activity includes cashless payments. The people who used to spend cash before or used the cash based models have now shifted towards using a digital model or a card based model. The trends are very visible… People have started to see that exchanging cash physically is a challenge during the COVID situation. Ramana Kumar, Head of Payments and Digital Banking at First Abu Dhabi Bank And it’s not just bank customers that are setting the trend towards digitisation, but many merchants and businesses according to Kumar. “There were merchants before – such as the baqalas of the world or some of the small scale merchants who always thought collecting cash is the best for payments. “And so what happened regarding digital payments is COVID really pushed customers to say no these merchants, that they want to only pay with their card, mobile phone or eWallet,” he added. “This has led to a transformation, and today even baqalas in and around households they send the card machine when making their deliveries.” Survival strategy For many shops and businesses it became a matter of survival to shift towards digital payments said Kumar. “During the peak COVID situation we went and fixed the machines in these merchant locations. There were merchants sitting with stock and no customers were visiting their shops, so we called them and we set it up for them remotely to link their payments digitally.” Digital transformation Kumar acknowledged the shifts in customer behaviour towards digitisation would have an obvious affect on physical branches, which he said would also help drive bank costs down. “If I’m controlling everything from my phone [as a customer] why would I need to walk into a branch, why would I need to call a call centre, why would I need to physically go wait for parking and to physically walk in and worry about getting in touch or in contact with other people. “The customer power or control drives all the cost factors for a bank. Digital payment by default drives the cost down for us,” he added. That doesn’t however mean physical bank branches will no longer exist, instead Kumar says branches are becoming more digital savvy in how they will operate, with FAB investing heavily into turning their branches into what he calls “digital branches”. Cashless initiatives This month has seen the launch of two major cashless payment initiatives in the UAE. they include Abu Dhabi Pay, launched by Abu Dhabi Government Services (TAMM) in partnership with FAB, which allow residents and citizens to pay by using a digital wallet application for digital government services. The second cashless programme - klip - was launched by Emirates Digital Wallet along with FAB, Mashreq Bank, National Bank of Fujairah and Mastercard. The initiative allows customers to transfer money to others through a mobile number and allows them to pay for goods using the existing merchant reach offered by partner banks.

GulfNews Business

Pandemic has accelerated drive towards cashless payments in UAE, says FAB official

Banking|: Abu Dhabi: The idea of having a cashless society for payments and banking is no longer just a distant dream, but fast becoming a new reality here in the UAE, with the global pandemic accelerating the country’s drive towards such a new system according to Ramana Kumar head of payments and digital banking at First Abu Dhabi Bank (FAB). “People have started to see the value in [going cashless] and our customer transactions have picked up in terms of Ecommerce and digital payments,” he said. See more More residential options added at Dubai south residential district Trees, birds, ponds: Mexico City's ancient lake reclaims scrapped airport Abu Dhabi: 9 places where rents have dropped in the capital Photos: Thai airways opens aircraft themed restaurant With airline fleets grounded, plane recyclers bet on parts boom “In terms of branch transaction migrations we have seen a phenomenal change in that, and so today our digital channels cater to more than 90-95 per cent of our overall transactions, which is a marked shift in customer behaviour,” he added, also noting that a big portion of that digital activity includes cashless payments. The people who used to spend cash before or used the cash based models have now shifted towards using a digital model or a card based model. The trends are very visible… People have started to see that exchanging cash physically is a challenge during the COVID situation. Ramana Kumar, Head of Payments and Digital Banking at First Abu Dhabi Bank And it’s not just bank customers that are setting the trend towards digitisation, but many merchants and businesses according to Kumar. “There were merchants before – such as the baqalas of the world or some of the small scale merchants who always thought collecting cash is the best for payments. “And so what happened regarding digital payments is COVID really pushed customers to say no these merchants, that they want to only pay with their card, mobile phone or eWallet,” he added. “This has led to a transformation, and today even baqalas in and around households they send the card machine when making their deliveries.” Survival strategy For many shops and businesses it became a matter of survival to shift towards digital payments said Kumar. “During the peak COVID situation we went and fixed the machines in these merchant locations. There were merchants sitting with stock and no customers were visiting their shops, so we called them and we set it up for them remotely to link their payments digitally.” Digital transformation Kumar acknowledged the shifts in customer behaviour towards digitisation would have an obvious affect on physical branches, which he said would also help drive bank costs down. “If I’m controlling everything from my phone [as a customer] why would I need to walk into a branch, why would I need to call a call centre, why would I need to physically go wait for parking and to physically walk in and worry about getting in touch or in contact with other people. “The customer power or control drives all the cost factors for a bank. Digital payment by default drives the cost down for us,” he added. That doesn’t however mean physical bank branches will no longer exist, instead Kumar says branches are becoming more digital savvy in how they will operate, with FAB investing heavily into turning their branches into what he calls “digital branches”. Cashless initiatives This month has seen the launch of two major cashless payment initiatives in the UAE. they include Abu Dhabi Pay, launched by Abu Dhabi Government Services (TAMM) in partnership with FAB, which allow residents and citizens to pay by using a digital wallet application for digital government services. The second cashless programme - klip - was launched by Emirates Digital Wallet along with FAB, Mashreq Bank, National Bank of Fujairah and Mastercard. The initiative allows customers to transfer money to others through a mobile number and allows them to pay for goods using the existing merchant reach offered by partner banks.

GulfNews Technology

Australia to amend law making Facebook, Google pay for news

Technology|: Canberra: Australia’s fair trade regulator Rod Sims, chair of the Australian Competition and Consumer Commission, said he would give his final draft of the laws to make Facebook and Google pay Australian media companies for the news content they use by early October. See more Photos: Egypt's blossoming trade in fragrant jasmine flowers Billionaire car-part supplier aims to triple sales in five years Vanishing jobs and empty offices plague Britain's retailers Photos: Czech guitar maker born of necessity woos stars Photos: Unemployment rate rises due to coronavirus Facebook has warned it might block Australian news content rather than pay for it. Google has said the proposed laws would result in ``dramatically worse Google Search and YouTube,’’ put free services at risk and could lead to users’ data ``being handed over to big news businesses.’’ Sims said he is discussing the draft of his bill with the U.S. social media platforms. It could be introduced into Parliament in late October. ``Google has got concerns about it, some of it is that they just don’t like it, others are things that we’re happily going to engage with them on,’’ Sims told a webinar hosted by The Australia Institute, an independent think-tank. ``We’ll make changes to address some of those issues -- not all, but some,’’ Sims said. Among the concerns is a fear that under the so-called News Media Bargaining Code, news businesses ``will be able to somehow control their algorithms,’’ Sims said. ``We’ll engage with them and clarify that so that there’s no way that the news media businesses can interfere with the algorithms of Google or Facebook,’’ Sims said. He said he would also clarify that the platforms would not have to disclose more data about users than they already share. ``There’s nothing in the code that forces Google or Facebook to share the data from individuals,’’ Sims said. Sims was not prepared to negotiate the ``core’’ of the code, which he described as the ``bits of glue that hold the code together, that make it workable.’’ These included an arbitrator to address the bargaining imbalance between the tech giants and news businesses. If a platform and a news outlet can’t reach an agreement on price, an arbitrator would be appointed to make a binding decision. Another core aspect was a non-discrimination clause to prevent the platforms from prioritizing Australia’s state-owned Australian Broadcasting Corp. and Special Broadcasting Service, whose news content will remain free. Sims said he did not know whether Facebook would act on its threat and block Australian news, but he suspected that to do so would ``weaken’’ the platform. Spain and France and have both failed to make Facebook and Google pay for news through copyright law. Sims said he has spoken about Australia’s approach through fair trading laws to regulators in the United States and Europe. ``They’re all wrestling with the same problem,’’ Sims said.


GulfNews Business

Stricter regulation is actually a blessing

Analysis|: ‘Stay safe’ has become more than just a mantra these past six months. Governments have used the phrase to explain why restrictions to everyday life are needed. We read it on posters in the street and on shop doors. We even sign off our emails to friends and colleagues with it. Yet there is more to these two words than just jargon. See more Midas touch: Singapore exchange touts gold to the masses Photos: New products, services rolled out by Apple Photos: Dubai cruise industry ready to set sail again Assembling a solar powered future in China Mexico holds symbolic raffle for unwanted presidential jet Staying safe has become an imperative that has percolated through society and changing the way we perceive the world at large. It is also changing the way we think about risk in financial markets. The last time this happened was a decade ago when the Global Financial Crisis ushered in a slew of reforms that sought to atone for an era of laissez-faire capitalism. Before the collapse of Lehman Bros, regulation was often seen as an obstacle to overcome rather than a code to work to. The Gulf had its own financial idiosyncrasies that were also to be swept away by the rising regulatory tide, such as the practice of “name lending”, where reputation alone was often enough to secure vast credit lines for projects that were sometimes little more than ideas. But rather than being a hindrance to the development of regional financial markets, the regulatory changes put into place in the years that followed the crisis had the opposite effect. Improved profile Instead, bourses from the UAE to Saudi Arabia were elevated by index providers, attracting billions of dollars in fresh capital and helping to move the Gulf from the fringes of the investment world to nearer the mainstream. Such progress in such a short period would not have been possible without the enabling scaffold that financial market regulation provided. Some of the improvements were subtle and not mandated per se, but were still palpable and made possible because of the new mood of professionalism that was changing the way companies interacted with investors and the information that they disclosed. Coming from within The coronavirus pandemic has once again triggered a new wave of regulatory introspection across global markets and in the Gulf, where it can be argued the stakes are much higher today than at the time of the Global Financial Crisis. This time the investment community itself is driving the trend as much as regulators. Our recent COVID-19 survey reveals that the majority of UAE investment professionals (78 per cent) believe that regulators should take a proactive role and consult with firms on possible solutions. More than half also believe regulators should design new frameworks to help restart normal market activity as quickly as possible. With so much of the investment community already onside, the industry at large is in a better mindset than a decade ago, when confrontation rather than collaboration often defined the dynamic. The challenge for regulators will be to keep in lockstep with the increasingly technology-driven sectors that they oversee. Go as wide as possible From the exponential growth of digital currencies to the adoption of artificial intelligence across banking and trading, one of the biggest issues may simply be generating sufficient bandwidth to stay across it all. This is especially true of the Gulf states, which are actively targeting the fintech sector. In the past, individual jurisdictions such as Abu Dhabi Global Market have been remarkably effective in establishing robust regulatory frameworks supported by legal enforcement, which was instrumental in changing the wider perception of Gulf financial markets. The future may demand such innovation across the region to prevent regulatory arbitrage and ensure that the momentum is maintained amid so much volatility in sectors from energy to real estate. Europe is already working on a number of financial sector reforms to make it easier for capital markets to support the recovery of businesses. These include efforts to make shorter and easy-to-read prospectuses aimed at enabling companies to raise more funds via equity rather than debt. Gulf economies will also now need to show, as they did a decade ago, that they are capable of reacting quickly to the new and still unfolding consequences of the pandemic on financial markets. If there is one big lesson for governments from this crisis, it is that swift and decisive action has given people a better chance to stay safe. The same holds true for investors. - William Tohme is Senior Regional Head at CFA Institute.

GulfNews Technology

US bans WeChat, TikTok from app stores, threatens shutdowns

Technology|: Washington: The US Commerce Department said Friday it will ban Chinese-owned TikTok and WeChat from US app stores on Sunday and will bar the apps from accessing essential internet services in the U.S. _ a move that could effectively wreck the operation of both Chinese services for U.S. users. TikTok won’t face the most drastic sanctions until after the Nov. 3 election, but WeChat users could feel the effects as early as Sunday. See More More residential options added at Dubai south residential district Trees, birds, ponds: Mexico City's ancient lake reclaims scrapped airport Abu Dhabi: 9 places where rents have dropped in the capital Get set to climb UAE’s tallest restaurant location from October 1 Chinese firms bet on plant-based meat as COVID-19 fuels healthy eating trend With airline fleets grounded, plane recyclers bet on parts boom The order, which cited national security and data privacy concerns, follows weeks of dealmaking over the video-sharing service TikTok. President Donald Trump has pressured the app’s Chinese owner to sell TikTok’s U.S. operations to a domestic company to satisfy U.S. concerns over TikTok’s data collection and related issues. Oracle deal California tech giant Oracle recently struck a deal with TikTok along those lines, although details remain foggy and the administration is still reviewing it. Trump said Friday said he was open to a deal, noting that ``we have some great options and maybe we can keep a lot of people happy,’’ suggesting that even Microsoft, which said its TikTok bid had been rejected, might continue to be involved, as well as Oracle and Walmart. Trump noted that TikTok was ``very, very popular,” said ``we have to have the total security from China,” and added that ``we can do a combination of both.’’ The new order puts pressure on TikTok’s owner, ByteDance, to make further concessions, said James Lewis of the Center for Strategic and International Studies. Trump had said this week that he does not like the idea of ByteDance keeping majority control of TikTok. TikTok expressed ``disappointment’’ over the move and said it would continue to challenge President Donald Trump’s ``unjust executive order.’’ The Commerce Department is enacting an order announced by President Donald Trump in August. TikTok sued to stop that ban. WeChat owner Tencent said in an emailed statement that it will continue to discuss ways to address concerns with the government and look for long-term solutions. Google and Apple, the owners of the major mobile app stores, did not immediately reply to questions. Oracle also did not reply. ``At the President’s direction, we have taken significant action to combat China’s malicious collection of American citizens’ personal data, while promoting our national values, democratic rules-based norms, and aggressive enforcement of U.S. laws and regulations,” Commerce Secretary Wilbur Ross said in a prepared statement. Security concerns The action is the Trump administration’s latest attempt to counter the influence of China, a rising economic superpower. Since taking office in 2017, Trump has waged a trade war with China, blocked mergers involving Chinese companies and stifled the business of Chinese firms like Huawei, a maker of phones and telecom equipment. China-backed hackers, meanwhile, have been blamed for data breaches of U.S. federal databases and the credit agency Equifax, and the Chinese government strictly limits what U.S. tech companies can do in China. The order requires WeChat, which has millions of U.S. users who rely on the app to stay in touch and conduct business with people and companies in China, to end payments for business transactions through its service as of Sunday and prohibits it from obtaining vital technical services from vendors. The Justice Department said in a filing that it would not target users with criminal or civil penalties for messaging on the app. WeChat users have sued to stop the ban, and a federal judge in California on Friday set an emergency hearing for Saturday at 1:30 p.m. Pacific time. Similar technical limitations for TikTok don’t go into effect until Nov. 12, shortly after the U.S. election. Ross said early Friday on Fox Business Network that access to that app may be possible if certain safeguards are put into place. TikTok says it has 100 million U.S. users and 700 million globally. Nicholas Weaver, a computer science lecturer at UC Berkeley, said the actions taking effect Sunday are short-sighted and suggest that ``the U.S. is not to be trusted and not a friendly place for business.’’ Users, meanwhile, face a security ``nightmare’’ because they won’t be able to get app updates that fix bugs and security vulnerabilities, he said.