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| SUNday, APRIL 30, 2017
Paper money may soon become obsolete Benefits of digital currency far outweighs traditional cash
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ash had a pretty good run for 4,000 years or so. But notes and coins increasingly seem declasse these days: they are considered dirty and dangerous, unwieldy and expensive, antiquated and very analogue. Sensing this dissatisfaction, entrepreneurs have introduced hundreds of digital currencies in the past few years, of which bitcoin is among the famous. Now governments want in: The People’s Bank of China says it intends to issue a digital currency of its own. Central banks in Ecuador, the Philippines, the U.K. and Canada are mulling similar ideas. At least one company has sprung up to help them along.
Much depends on the details, of course. But this is a welcome trend. In theory, digital legal tender could combine the inventiveness of private virtual currencies with the stability of a government mint. Most obviously, such a system would make moving money easier. Properly designed, a digital fiat currency could move seamlessly across otherwise incompatible payment networks, making transactions faster and cheaper. It would be of particular use to the poor, who could pay bills or accept payments online without the need of a bank account, or make remittances without getting gouged. For governments and their taxpayers, potential advantages abound. Issuing digital currency would be cheaper than printing bills and minting coins. It could improve statistical indicators, such as inflation and gross domestic product. Traceable transactions could help inhibit terrorist financing, money laundering, fraud, tax evasion and corruption. The most far-reaching effect might be on monetary policy. For much of the past decade, central banks in the rich world have been hampered by what economists call the zero lower bound, or the inability to impose significantly negative interest rates. Persistent low demand and high unemployment may sometimes require interest rates to be pushed below zero — but why keep money in a deposit whose value keeps shrinking when you can hold cash instead? With rates near zero, that
conundrum has led policy makers to novel and unpredictable methods of stimulating the economy, such as largescale bond-buying. A digital legal tender could resolve this problem. Suppose the central bank charged the banks that deal with it a fee for accepting paper currency. In that way, it could set an exchange rate between electronic and paper money — and by raising the fee, it would cause paper money to depreciate against the electronic standard. This would eliminate the incentive to hold cash rather than digital money, allowing the central bank to push the interest rate below zero
Transition to a digital future Set for imminent launch, the Emirates Digital Wallet initiative will mark a major milestone in the UAE’s journey towards a cashless future
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he UAE Banks Federation (UBF) recently announced that the establishment of Emirates Digital Wallet LLC, a company owned by 16 shareholding banks and fully sponsored by UBF, has reached its final development stage. The launch of Emirates Digital Wallet, previously Mobile Wallet
project, is set to introduce a society-wide cash transformation to digital, and mark a major milestone in the country’s push towards a cashless future. Initiated by UBF in 2014, the first-of-its-kind project is fully supported by the country’s banking sector, and will be regulated and supervised by the Central Bank of the UAE. The project has been developed and implemented under the aegis of UBF by a special committee representing the 16 partner banks that hold equity stakes in the entity. “Our objective, since the initiation of this project and subsequently moving from blueprint to implementation, is for banks to establish a dedicated entity and take direct responsibility for expediting the process of digital transformation in the UAE,” said Abdulaziz Al Ghurair, Chairman of the UAE Banks Federation. “We are proud that this initiative, a true milestone for UBF and an essential building block of the UAE’s Smart Government initiative, is completing its pre-launch stage in coordination with the Central Bank of the UAE. We are eagerly looking ahead to the industrywide implementation of this massive project in the months to come. We are very confident that the company will add a major boost to the country’s push towards a digital economy. “The significance is that the entire banking sector of a country is joining forces to create a dedicated entity for the benefit of all citizens, residents and visitors. Adopting such an inclusive and representative approach towards building a digital payments ecosystem will ensure that the maximum number of people will be able to participate in and benefit from this breakthrough initiative,” Al Ghurair added. From his side, Mubarak Rashed Al Mansoori, Governor of Central Bank of the UAE, commented: “As a step forward in the right direction, the successful development of this major initiative reflects the strength of the collaboration done between all parties on industry level, and their shared vision to drive the UAE’s cashless vision and digital evolution to all UAE citizens and expats, while also promoting greater financial inclusion.”
and thereby boost consumption and investment. It would be a big step toward doing without cash altogether. Digital legal tender isn’t without risk. A policy that drives down the value of paper money would meet political resistance and — to put it mildly — would require some explaining. It could hold back private innovation in digital currencies. Security will be an abiding concern. Noncash payments also tend to exacerbate the human propensity to overspend. And you don’t have to be paranoid to worry about anyone tracking your financial life. Governments must be alert to these
problems — because the key to getting people to adopt such a system is trust. A rule that a person’s transaction history could be accessed only with a court order, for instance, might alleviate privacy concerns. Harmonising international regulations could encourage companies to keep experimenting. And an effective campaign to explain the new tender would be indispensable. If policy makers are wise and attend to all that, they just might convince the public of a surprising truth about cash: They’re better off without it. — Bloomberg
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II
The Cashless Future
» Quisk Middle East
Peek into the future of transactions POS terminals, we allow customers with any type of phone to enter their mobile number and PIN at any Quisk-enabled POS. Where business owners do not have a POS today, we allow any merchant to convert a connected feature phone, smartphone, tablet, or e-commerce platform into a mobile mPOS to securely accept a digital cash payment. Where a wallet may have a range of card or accountbased funding sources, we can link to any source of funds, and enable customers to cash in or cash out from a Quisk-enabled ATM, POS terminal, merchant agent, and more.
Quisk challenges mobile money technologies of today with a universal cash solution, says Managing Director Ziad Alshobaki There are many competing mobile money technologies today; what makes Quisk unique? We’ve designed a solution that we think is simpler for customers to use, that for the first time makes it possible to digitally move money using any device an account holder is most comfortable with — be it a phone, tablet, or computer. In practice, this means Quisk is not a system designed for a single bank, handset type, or level of customer, but one that is multi-issuer, enables payments from or to any feature phone user as easily as from or to a new smartphone, and one that allows the broadest range of transaction types to be supported via integrations to the widest range of connected devices. This is fundamentally different than other mobile money apps or device-specific systems, but we think our simpler solution is the smarter one. How does Quisk compare to a wallet, such as
What’s next for Quisk as a payment type?
Ziad Alshobaki, Managing Director, Quisk EMEA
the initiative of the UAE Banks Federation? We’re not a wallet, and don’t compete with them. In my opinion, we extend the functionality of wallets. Where a wallet might allow contactless NFC payments from a smartphone to some
We are currently demonstrating our live Quisk ecosystem to forward-thinking financial institutions across the Gulf, and talking about how a universal digital cash solution can transform and add value across every aspect of our economy. To banks, a next-generation of payments captures new transaction volumes and customers. To merchants, we can reduce losses and theft and increase customer purchasing power — at fees lower than cardbased competitors. Finally, to people everywhere we are delivering a new, secure, and more affordable way to pay. We’re excited to be a part of a technology that is working to enable a smarter, happier, and more digital future.
» Mahindra Comviva
Nurturing cashless finance needs Mahindra Comviva features a portfolio of comprehensive digital financial solutions for banks, financial institutions and telecom operators
Kaustubh Kashyap, Vice-President, Middle East and North Africa, Mahindra Comviva
Mahindra Comviva is a global leader in digital financial and prepaid domain, with over 130 deployments in 55-plus countries and serves over one billion consumers. It offers comprehensive digital financial solutions for the issuing and acquiring side of banks and businesses of financial institutions. In the Middle East, Mahindra Comviva has enabled over 10-plus banks, telecom operators and financial aggregators to facilitate digital
financial services. On issuing side, mobiquity® Wallet offers a feature-rich mobile wallet for consumers and a robust and flexible platform for service providers and their partners. It leverages NFC (HCE), BLE, QR Codes, biometrics, geo fencing and sound based payments enhancing the digital payment experience for consumers. On acquiring side, payPLUS empowers bank’s or acquirer’s merchant partners with a unified payment acceptance platform that enables acceptance of any payment instrument (such as cards, digital wallets, mVisa, etc.) across any channels (such as instore, app, web or physical), thereby significantly reducing barriers to adoption of new technologies to acquire merchants and enable cashless transactions.
» ENOC
Boosting digital payments ENOC shifts cashless technology into higher gear through several key innovations ENOC has changed the way we refuel our cars thanks to the Vehicle Identification Pass (ViP), which is a securely encoded electronic security tag mounted near the fuel tank. It features Radio Frequency Identification (RFID) technology that authorises and tracks every fuel transaction and enables instant recognition of registered vehicles and customers. The innovative technology, which promises a completely automated and paperless system, allows the nozzle to automatically recognise fuelling preferences set for the vehicle, calculate the amount of fuel filled from the dispenser and deduct money automatically from the individual’s ViP account. The service was launched for corporates in 2014 and for individuals in 2016. ENOC is the only network in the UAE to have this technology installed across its entire network. ENOC was also the first station in the UAE to accept mobile payment for fuelling. In partnership with Beam Wallet and Masterpass, using Beacons on site, they have enabled customers to pay with their mobile phones for fuelling without having to leave the comfort of their vehicles. Beam uses Bluetooth Low Energy (BLE) Beacons at the stations to enable the payment transaction. This is the first time in the world that BLE Beacons have been used in this way in the fuel retailing business. Mobile payment has also been extended to Samsung Pay and the new Dubai Smart Government App called ‘Dubai Now’. Determined to take cashless transactions from the future to the present, ENOC also recently announced the launch of the new proprietary payment app, ENOC Pay launching in Q3. The new app will consolidate the payment method across all the business divisions of ENOC. Through ENOC Pay, customers can settle the payments for a diverse range of fuel and non-fuel offerings within their network of fuel stations, ZOOM stores, AutoPro service centres and even ZOOM services such as DEWA bill fulfilments, mobile phone recharge, etc. Furthermore, they have introduced PIN-less credit/debit card transactions earlier this year at all service stations to make refuelling easier and faster. The central bank has endorsed this initiative as the first of its kind for a fuel retailer in the country. This ensures that customers will no longer be required to enter their PIN numbers while paying for fuel, thus reducing waiting times at ENOC and EPPCO service stations. The initiative also fulfils a longstanding customer demand to stay in the car during card payments and retain confidentiality of their PIN numbers. The limit for the PINless and paperless transaction is Dh300 for VISA cards and up to Dh100 for MasterCard cards.
khaleej times | ADVERTISING SUPPLEMENT | SUNday, APRIL 30, 2017
III
The Cashless Future
Cashless payments are a new reality Samsung Pay allows users to simply scan their fingerprint and pay
Imagine a world where transactions are not confined to cash notes and coins, just a cashless society with the convenience and the mobility of mobile payment systems in the palm of your hand. The ease and low cost of conducting a financial transaction cashless is the biggest motivator for people to go through digital payment systems. If smartphones can provide communication methods digitally, such as the recently launched Samsung Pay in the UAE, then wallets can become digital too. Recent research has shown that 77 per cent of residents across the GCC prefer alternative options to cash and card payments, should they be available in their country, according to a study commissioned by Card & Payments Middle East. Furthermore, Government identity cards (12 per cent), banking apps (17 per cent) and mobile payments (9 per cent), were identified as some of the top alternative choices of payment methods. Overall, this indicates a great appetite in the region for technological advancements when it comes to the payments industry, with less reliance on traditional methods. The UAE has a high penetration of mobile users. Mobility and convenience is a key aspect in the life of many smartphone users that bank, make purchases and socialise online. Sweden is a great leading example of a cashless society where most public transport in the country do not take cash, retailers are legally entitled to refuse coins and notes, and even street vendors increasingly prefer card or phone payments. The realisation of a cashless society is gaining popularity across the world and is the new reality. Samsung Pay alone is now present in 17 different countries, including those with early access. The UAE is the first country in the Middle East to introduce the service and 14th in the world, following successful launches in the U.S., South Korea, Russia and more. In the UAE, a cashless society is becoming a reality, with a growing number of consumers in the country, who today
Mohammad Gharaibeh Head of Enterprise — Mobile Business Samsung Gulf Electronics
Tarek Sabbagh Head of IT & Mobile (IM) Division Samsung Gulf Electronics
prefer to go out without carrying cash in their wallets. The future of digital banking is very exciting and the way in which people bank and conduct transactions is rapidly changing, driven by emerging technologies and customers. The muchanticipated, flagship mobile payments service, Samsung Pay, is changing people’s lives and purchases can now be made almost anywhere a debit or credit card can be swiped. “Our overall goal with Samsung Pay is to drive and lead innovation in mobile commerce, providing our customers with a mobile wallet solution that is simple, secure and available almost anywhere. Since the early introduction of Samsung Pay last year, we have seen great momentum and experienced significant consumer adoption. We are committed to
making the lives of our Samsung users easier and we have partnered with major banks and payment networks in the UAE, to provide our customers with a wide range of choices when making payments. We are currently working on bringing more and more partners on board soon,” said Mohammad Gharaibeh, Head of Enterprise, Mobile Business at Samsung Gulf Electronics. Samsung Pay is the next evolution in Samsung’s mobile payment innovations, replacing wallets for users in the UAE. Residents and citizens can take advantage of the simple and safe new way of shopping in a cashless society by spending almost anywhere. The safe cashless payment system uses three different levels to guarantee payment security, including fingerprint identification, tokenisation to encrypt card credentials and Samsung KNOX, which is the organisations industry-leading security platform that monitors malicious software and activities. The simplicity of Samsung Pay means that users in the UAE can simply swipe up on the home screen of a compatible Samsung smartphone, scan their fingerprint and pay. In order for Mobile Payments to flood the market, all payment terminals need to have Near Field Communication (NFC) compatibility. Samsung Pay, on the other hand, has leveraged conventional terminal
readers with Samsung’s patented Magnetic Secure Transmission technology (MST). This technology, in fact, replicates a card swipe by wirelessly transmitting magnetic waves from the supported Samsung device to a standard card reader. Through MST, Samsung Pay will work seamlessly on existing point-of-sale (POS) terminals currently in the UAE, increasing convenience and mobility for Samsung Pay users. “The UAE has always been a leading country in adopting the latest technology and implementing it in a very efficient way to provide a unique lifestyle to its population, such as e-government, e-gate, etc. Now with the launch of Samsung Pay, we are entering a new era of cashless payment that is simple, secure and trendy
at the same time. Launching Samsung Pay officially with the launch of the Galaxy S8 reflects the harmony of introducing breakthrough innovations; the Galaxy S8 Infinity display crossed all the barriers, likewise Samsung Pay also crossed all the barriers by being accepted almost everywhere,” said Tarek Sabbagh, Head of IT and Mobile division at Samsung Gulf Electronics. Samsung is strategically expanding its partnership ecosystem to provide greater flexibility, access, and choice for customers, and has currently partnered with MasterCard and Visa, to bring mobile payments to consumers. The service will also launch with major UAE banks, including ADCB, Emirates NBD, HSBC, Mashreq, National Bank of Abu Dhabi, RAKBANK and Standard Chartered, to make the service available to more consumers in the UAE. In the UAE, Samsung Pay is currently available for Galaxy S8 and Galaxy S8+, Galaxy S7 and Galaxy S7 Edge, Galaxy S6 Edge+, Note 5, Galaxy A5 and Galaxy A7 (2016) and Galaxy A Series (2017). Samsung Pay will also be available for the Gear S3. A cashless society is something so powerful that it will touch every segment of society and provide benefits for all. An everyday transaction should not be any different and we are witnessing a paradigm shift when it comes to banking systems and purchasing solutions. By 2020, the UAE leadership vision aims to see UAE consumers, businesses, merchants, banks, forex exchanges, and even government service providers handling far less cash. The Government has taken strong leadership in promoting electronic payments to support their social and economic goals. The UAE itself has a strong vision to become a digital economy, it has a society that will soon be cashless, and it is likely to be more mobile driven when it comes to payments in line with its Smart City vision. The market is expected to rapidly change with the introduction of Samsung Pay. The future of a fully incorporated cashless society brings convenience, efficiency and mobility to end-users in the UAE and worldwide.
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