1) Last year, Central Bank of the UAE increased Card Verification Method limit for contactless transactions to AED 500 from AED 300. Are there plans to further increase this limit to encourage more usage of contactless payments, especially for larger purchases?
Contactless payments are part of everyday life for a growing segment of the UAE’s population. And Central Bank’s decision to raise transaction limits for contactless payments was aimed at allowing customers to use their contactless cards to make slightly larger everyday purchases, especially in view of current times where social distancing has become the norm.
While we at UBF continue to work closely with Central Bank of the UAE to identify and implement newer ways to enhance payment convenience for all customers, citizens and residents, it is always governed by business need justifications and enhanced controls. Accordingly, it may be too soon to discuss specific measures being proposed with respect to a further increase in contactless transaction, but any updates in this regard will be announced in due course once decisions are made and all details are finalized.
2) Almost all banks in the UAE today offer contactless chip cards and mobile wallets. Now, Empay and Klip are also offering residents contactless payments options. Is there a need to consolidate all these digital wallets since they offer similar services?
The rising uptake of digital wallets represents a big step towards our goal of increasing financial inclusion and providing greater financial freedom to residents as well as move inline with UAE’s vision and strategy to become fully digital. Klip, as you know, is owned and operated by Emirates Digital Wallet LLC which was established by 15 leading national banks. To that extent, there is already significant collaboration and convergence of interests within the UAE banking community in promoting digital transformation. Empay, meanwhile, is also developed within the UAE’s Smart Government program framework.
We believe competition is healthy and ultimately benefits customers in having options and selection while also advancing the digital wallet ecosystem to its next stage of development, as market players vie with each other to provide better services and offer a superior customer experience, thus helping incentivize creativity and accelerate innovation.
3) Contactless payments now make up 84% of all face-to-face card payment transactions in the UAE, according to research by Emirates NBD. How are banks in the country ensuring the security of transactions which don’t require pin numbers?
Contactless cards are as secure as any other chip card and have multiple layers of security built into them to protect their users from unauthorized or fraudulent transactions. Moreover, a contactless payment terminal can only process one transaction at a time and the card doesn’t leave the customer’s hand during the entire transaction process. And, UBF member banks employ many state-of-the-art techniques and architectures in their information and transaction security. All of this greatly reduces the risk of cross payments or mis-allocated payments.
That said, and as with every aspect of the digital domain, contactless payments are too a continually evolving ballgame, and there are of course aspects surrounding payment security that will always need to be tightened further, which is the reason why member banks in the UAE, under the guidance of UBF, keep working closely with Fintech companies and security providers to evolve new ways and technologies that can more completely reduce the risk of fraudulent or unauthorized transactions.