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The Digital Wallet: The New UAE Customer Happiness Initiative?

Electronic Documents Centre
1/4/2018

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The Digital Wallet: The New UAE Customer Happiness Initiative?

We’ve all seen the signs. The renamed customer happiness centers, changing street signs, smiley faces on the road and several little steps taken by the UAE to enhance the customer experience. We’ve also seen the introduction of the digital wallet that seems to be revolutionizing the market. But will that really enhance the customer experience? Is it just a new trend that’s bound to fade away? Will it really make for a happier customer? Is it even safe to use and where can it be used? After scanning the market and extensive exploration, here’s what we know.

What is the digital wallet?

The digital wallet now sweeping the market is quite simply a form of digital payment where customers have the option to load multiple cards both credit and debit in a single mobile device and store the card data within the secure element of the device.Technology has enabled the safe storage of the card information. This has prompted financial institutions to innovate new methods to offer customers the option of using the card information stored on the mobile device, while out shopping without the physical need for the plastic card. The digital wallet is more and more being seen as the replacement to the traditional wallet and is experiencing exponential growth in various countries. Countries such as India and Thailand have seen growth of approximately 56% and 51% respectively, while Europe and The US have seen nearing 17% and 24% as the digital wallet gradually gains grounds in the market. But is it safe?

The Technology.

Largely the Mobile Wallet payments are processed using a unique QR code for identification. To further this, the mobile device interacts with the merchant’s terminal via the “Near field communication” (NFC) protocol. The NFC protocol is essentially a contactless payment method enabling a portable device (Eg; smart phone) to communicate with the merchant’s electronic system when it is within a certain range. The Mobile payment transaction is further secured by introducing “Tokenization”, where the risk of the credit/debit card is minimized by using a short lived card no. with a lower limit and/or lower value In order to secure the transaction between the merchant and the issuer, avoiding the risk on card data theft and fraudulent transaction. In addition most of the issuers have introduced the second level authentication with a Onetime password to further secure the transaction.

The UAE and customer happiness.

What does the digital wallet have to do with customer happiness in the UAE? It’s quite simple. The UAE ranked number 20 on the World Happiness Report for 2012 – 2014. Later, His Highness Sheikh Mohammed wrote an open letter to all Federal government employees reminding them of their core mission: providing world class services to the people of UAE with the goal of contributing to their happiness. His commitment was to make happiness a national policy goal. There is now an official Happiness Agenda and framework in place set in motion by key leaders to increase Happiness. The UAE have identified the ABCD (affective, basic, cognitive and deeper) of needs that contribute to happiness. Under basic needs is the need to have goods and services quick and easily accessible as well as the need to stay current with technological trends. Customers are looking for far more than competitive prices, flexible delivery and payment options.  They expect brands to make their experience more personal and they expect a certain standard of service.  

The digital wallet is by no means a new phenomenon, it has been making its rounds in the Global market for a few years now. However, this year it’s made its way and has begun to gain grounds in the UAE market for a number of reasons, one of them being an attempt to provide world class service.

How the customer benefits?

Not only does the digital wallet mean a significantly quicker means of payment. It also provides added security seeing as your physical card need not be with you and reducing the risk of theft or misplacement. It also means that you can load multiple cards on to one device reducing the need to carry your cards around. Besides providing a relatively hassle free payment service, misplacement of the phone doesn’t require you to block your cards and wait for it to be re-issued. You may continue transacting as long as you have another device to load the information on to.

Where can I use it to pay?

Revolution does not happen overnight but over a period of time and as the market begins to welcome the trend. The digital wallet has the flexibility to be deployed from very large merchants to very small merchants or even payment between two individuals. This means that a digital payment can be made just about anywhere that the setup is made available.

Do I still need a card?

Today the mobile technology has grown to the extent that the credit and debit cards can be stored within the mobile device secure and can be used for payments if required. Having said this, the financial institutions are still required to issue the plastic card that can be used locally and internationally where the technology adoption is lagging in terms on digital/mobile payment. As of now the digital wallet simply stores the card details that is already embedded into a plastic card. Technology may also fail and as a safeguard, the physical card would still be required to complete the transaction.

The Verdict

The UAE is taking several new steps under the Happiness Agenda to raise the standard of service and happiness within the country. The digital wallet has not only proven to provide a more efficient, and hassle free transacting experience but also known for enhanced security, thus making for a happier customer. As a result it is growing exponentially and leap frogging the industry and we get to witness the mark of a significant revolution in this digital era.

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