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You may be saying goodbye to paper dirhams faster than thought as the UAE continues to make major strides toward becoming a cashless society this decade. 

Digital payment transactions in the UAE grew by 9% between 2014 and 2019, a significant pace given that the average growth rate in Europe during the same time was only 4%, according to McKInsey and Co

Many people believe that the journey to becoming cashless will quicken. Indeed,  64% of UAE residents expect the country to become fully cashless by 2030,  a recent survey by Standard Chartered revealed. 

Of course, there are many advantages that come with this drive towards a cashless society: convenience, fraud minimisation, financial inclusion, etc. Nevertheless, it is also worth understanding the disadvantages: loss of privacy and anonymity, cyber crimes, and financial exclusion of the less technologically savvy, among others. 

Business leaders who are thinking about how to adapt in a fully cashless society must fully understand its pros and cons. 

In this article, we’ll dive into the various aspects of this shift towards the digital dirham, examining both the promises and perils associated with embracing a cashless society as well as how to manage the cons. 

We’ll cover:

  • The UAE’s road to a cashless society
  • 7 Advantages of a cashless society
  • 4 Disadvantages of a cashless society
  • Managing the cons a cashless society

[Do you want to contribute to the UAE’s mission of becoming a cashless society by increasing financial inclusion? By signing up for NOW Money’s digital payroll solution, your employees will have access to our award winning mobile bank account in which they can receive their WPS salary, send money home, carry out online transactions, and recharge their mobile phones. Request a demo to see how this digital payroll system can improve your business.]

The UAE’s road to a cashless society

In 2010, H.H. Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, launched UAE Vision 2021, a broad agenda to make the UAE one of the best-performing countries in the world by 2021. 

Achieving a competitive knowledge economy was one of the six national priorities designed to achieve this vision. It was in line with this priority that Dubai initiated its bid to become a smart city.

In 2009, the Ministry of Human Resources and Emiratisation launched the Wage Protection System (WPS), which required that private businesses pay workers electronically instead of using cash. This new system led to the greater adoption of digital payments as companies were forced to seek alternatives to cash.

One such alternative is mobile banking. The requirements of the WPS led to a boom in the development of mobile banking solutions across the UAE since many UAE expats did not meet the requirements to open traditional bank accounts. 

In no time, debit cards, credit cards, and digital wallets became popular in the UAE. According to Zawya, in 2018, 63% of point-of-sale devices used by businesses in the UAE were already capable of processing contactless transactions. In fact, the UAE was the first country in MENA to introduce global wallets like Apple Pay and Samsung Pay to its citizens. 

Like other economies, the COVID-19 pandemic also contributed to the increased adoption of digital payments in the UAE. 

Overall, the UAE government has played a central part in the promotion of a cashless society.   

In 2018, the government of Dubai was already encouraging its citizens to pay vehicle and driving fines through digital platforms. To enhance compliance, a AED100 surcharge was placed on any cash payment of these fines. 

Also, the UAE government has provided a thriving business environment for fintechs, which have been responsible for providing digital solutions and products driving the journey towards a cashless economy. 

For example, the Fintech Hive at Dubai International FInancial Centre has incubated over 200 startups and raised over $530 million to support financial innovation missions.

In 2019, the government also created, in partnership with Accenture, a global consulting company, called the National Payment Systems strategy. This platform was designed to ensure “real-time faster payments and funds transfers around the clock (24*7), and digital payments across the UAE financial sector.”

A year before (in 2018), the government also created the Emirates Blockchain Strategy 2021 with the goal of “capitalising on blockchain technology to transform 50 per cent of government transactions into the blockchain platform by 2021.”

7 advantages of a cashless society

Why is the drive towards a cashless society so important to the UAE government? Well, a cashless society offers certain advantages that are crucial to the economic growth and development of a society. 

Now let’s review some of the core benefits of a cashless society.

1. Convenience and efficiency

Cash is inconvenient and inefficient for both customers and merchants. 

Merchants have to collect physical cash, count it, and look for change (when the cash received is greater than the amount to be paid). At the end of the day, they also have to reconcile sales records with the cash on hand and take cash to the bank. And at the end of the month, also reconcile their cash book with bank statements.

To pay merchants with cash, customers also have to visit an ATM, (sometimes) wait in a queue, and withdraw cash. 

Cashless transactions remove this inefficiency and inconvenience. Customers can pay exact amounts using payment methods such as debit and credit cards, digital wallets, QR codes, or USSD in just a few seconds, and merchants can receive the money directly to their bank accounts immediately. 

This saves time and helps avoid needless stress

2. Minimising fraud and improving security

Reduced risk of fraud and disputes is another advantage of a cashless society, according to May Brooks-Kempler, director of Cyber Range Solutions

Bad actors prefer paper money because of the absence of a paper trail through which the payment can be traced. 

Also, the use of cash can expose citizens (both customers and merchants) to various nefarious elements in the society. 

A cashless society can solve both of these problems. 

First, with the turn to a cashless economy, people carry less money and in-person robberies are reduced. 

Secondly, if thieves steal debit or credit cards or force people to make a digital transfer, such transactions can be traced by relevant law enforcement agencies. This is because every transaction processed digitally leaves a trail. 

A fully cashless economy will also be a blow for the money laundering industry since it depends majorly on the movement of cash to achieve its aims. 

According to the World Economic Forum, a cashless society can be a crucial way to save developing countries who lose $1.26 trillion yearly to corruption, bribery, theft, and tax evasion. They believe that a cashless economy will ensure transparency in money flows and make it easier to flag potentially dubious transactions. 

Fintech development indeed reduced theft in China, research by the Asian Development Bank Institute confirmed. Also, a study by Ernst and Young, a global consulting firm, found that 36% of respondents believe that financial crime prevention is a key benefit of a cashless economy. 

3. Encouraging financial inclusion

The World Bank has noted a 4% drop in the gender gap in account ownership in the MENA region. And it believes that the higher adoption of digital payments in the region can further reduce this gap. 

In their words, “Opportunities abound to increase account ownership broadly by digitizing payments currently made in cash, including payments for agricultural products and private sector wages.” The World Economic Forum agrees: “A cashless society – along with the transformation of the last mile of money transfers, payments and banking services – will help to close the financial inclusion gap.”

This connection can already be seen in the UAE where the adoption of mobile banking (necessitated for many businesses by the WPS) has led to the inclusion of many expats into the financial system. It is no surprise, then, that the UAE continues to be a leader in financial inclusion in the MENA region. 

A study submitted to Princeton University which analysed data collected from Alipay, a digital wallet, found that cashless payments also “leads to more credit provision by financial intermediation.” 

4. Improved cross-border transactions

Digital payments have also been known to reduce the cost of cross-border transactions. 

A 2021 survey by the World Bank revealed that sending $200 via mobile payments is cheaper (at about 3%) than sending it through a bank (10.4%), post office (8.3%), or money transfer operator (5.2%). Similarly, Paypal and Xoom found that digital remittances cost about half of traditional remittances made by exchange houses. 

In addition to cost, digital payments make cross-border transactions more convenient. Instead of travelling to banks and exchange houses, expats in the UAE can send money back home from the comfort of their phones through a platform like NOW Money, which provides all employees in their payroll system with our award-winning mobile bank account. 

5. Better record keeping

Another advantage of the paper trail that cashless transactions leave behind is the ease at which merchants can keep records of transactions

Every transaction has a digital record that can be analysed digitally or printed for accounting, auditing, tax, and business development purposes. 

6. Improved financial management

Similarly, the ease at which customers can access records of their financial transactions can lead to improved financial management. 

Anyone can log in to their digital wallets or bank apps to view or download their statements of accounts. With these accounts, they can better understand their financial activities and use that knowledge to improve their budgeting and financial decision making.

7. Supporting a digital economy

May also noted that a cashless society “will help stimulate a digital economy, with an increased amount of fintech solutions and digital payment platforms building an e-commerce ecosystem.”

The global digital economy now contributes 15% of the global GDP, according to the World Bank. More interestingly, the growth of the digital economy over the past 10 years is 2.5x that of the physical economy. Deemah AlYahya, Secretary-General of the Digital Cooperation Organisation (DCO), forecasts that the digital economy will contribute 30% of global GDP and provide 30 million jobs by 2030. 

By definition, the more cashless an economy, the more its footprint in the digital economy. And with the stupendous growth potential of the digital economy, the more a country will be able to grow its economy. 

As the World Bank puts it: “The universal adoption of digital technologies in countries across the Middle East and North Africa (MENA) would reap huge socio-economic benefits, amounting to hundreds of billions of dollars each year and a much-needed surge in new jobs.

4 disadvantages of a cashless society

While there is a lot to cheer about, there are also disadvantages that come from the adoption of a cashless society. 

Knowing this, a fair evaluation will involve studying both a cashless society’s advantages and disadvantages. 

In what follows, we identify some of these disadvantages: 

1. Privacy and anonymity

May describes this challenge this way: “In a cashless society, where transactions are tracked and recorded electronically, individuals’ financial activities become more traceable.”

In essence, while ubiquitous availability of paper trails can be an advantage – easier to detect and fight crime – they  can also be a disadvantage by reducing privacy. How so? 

The ability of government and other private corporations to gain access to people’s digital transactions means they can easily monitor and track the financial activities of anyone

Even private companies with such access can use the information for their own purposes (an example is advertising and marketing).

ExpressVPN, a cybersecurity firm, provides the following examples: 

“China, for instance, has a social credit system that discourages certain transactions on payment platforms like AliPay and WeChat, and an American initiative, ‘Operation Choke Point,’ attempted to freeze the bank accounts of legal businesses that were apparently politically unfavourable.”

The development of blockchain technology and cryptocurrency is a response to this problem. Cryptocurrencies attempt to provide the same advantages as other digital payment options while allowing users to complete transactions anonymously. 

Nevertheless, the decentralised nature of cryptocurrency also poses a risk – criminals can easily get away with crimes. 

Many national governments have also developed their own digital currencies. However, these are centralised alternatives and do not offer the privacy and anonymity that cryptos do. 

Navigating between the two – providing privacy and anonymity and making it easy to track criminals – remains one of the largest dilemmas of the digital and cashless economy.   

2. Identity theft and data breaches

While the movement from cash payment to a cashless society has effectively reduced some crimes, it has created a breeding ground for new ones. Cybercriminals are increasingly adept at stealing the identities of people to gain access to their money.  
“Cybercriminals will use every tool in their arsenal to exploit vulnerabilities in digital identification systems, impersonate individuals and use their cashless devices,” said May. 

May Brooks-Kempler

[In a cashless society], “cybercriminals will use every tool in their arsenal to exploit vulnerabilities in digital identification systems, impersonate individuals and use their cashless devices.”

May Brooks-Kempler, Director of Cyber Range Solutions

Some 236.1 million ransomware attacks were recorded in 2022 alone, and one in five emails are exposed to cybercrime every year, according to statistics compiled by AAG-IT, a cybersecurity company in the UK. 

However, if we could choose one statistic to sum up the impact of the cybersecurity problem, it would be this: about 1% of global GDP is lost to cyber crime every year. 

Closer to home, more than 25,000 cyber crimes were reported in 2021 in Dubai alone, according to The National News. Comparitech, a cybersecurity firm, also recorded that UAE citizens lose about $746 million every year to cyber crimes.  

3. Infrastructure vulnerabilities

Instead of attacking individuals, hackers can attack the very systems and platforms supporting the cashless economy. 

May says that “the infrastructure supporting cashless transactions, including payment systems, networks, and digital platforms, can be susceptible to cyber-attacks. Disruption or compromise of these systems can lead to service outages, financial losses, or the compromise of sensitive data.”

May Brooks-Kempler“The move to a cashless society makes individuals even more dependent on infrastructure. [But] the infrastructure supporting cashless transactions, including payment systems, networks, and digital platforms, can be susceptible to cyber-attacks.”
— May Brooks-Kempler, Director of Cyber Range Solutions

Through these attacks, they can steal customers’ funds and data. Even when they can’t go that far, they can compromise the system (glitches, power outage, service outages, etc.) and make it impossible for customers to use them. 

In the Ernst and Young report quoted above, increased potential for cyber risk  and mass outages were the joint-second most negative impact of a cashless society identified by respondents.

What complicates this challenge more is that only a few of these cases are investigated.

NorthRow (quoted above) identifies three reasons for this: “the distance between thief and victim which excludes witnesses, the often foreign-based nature of the crimes and the ability of fraudsters to conceal their identity within the network.” This is why they conclude in a pessimistic tone that “online fraud is therefore expected to continue rising dramatically as the prediction of a cashless society draws closer.” 

4. Poor financial management

The ease of paying for goods and services can lead to overspending. Similarly, the availability of credit cards can lead to impulsive buying and accumulation of debt. 

This is one of the factors fueling the growing global consumer debt problem

Managing the cons of a cashless society

The UAE and its businesses must work together to tackle these disadvantages and reduce their negative effects. 

Below are some of the top points to consider to help transition to a cashless society. 

1. Support offline mobile banking

In countries where smartphone penetration is low, fintech companies and traditional banks have worked with telcos to use Unstructured Supplementary Service Data (USSD) to complete financial transactions. 

With this system, a bank or fintech will have a series of codes (e.g., *100#) through which users can carry out various transactions (transfers, airtime recharge, etc.). These codes can be dialled on any phone – it doesn’t require internet connection. Consequently, people in rural areas and those who can’t afford smartphones can use them in lieu of mobile apps. 

Though smartphone penetration rate in the UAE is very high, the use of USSD can still help improve financial inclusion for those living in rural areas or on the fringes of society. 

2. Respect rights

If people are concerned about privacy and anonymity, then they will be less eager to adopt a cashless society (or a fintech product that doesn’t care about privacy). 

However, if there is an existing trust between government and citizens, this problem will be less significant. 

Governments should then continue to build the social capital needed to take the people on a new path they may not be familiar with.  

3. Financial education

A cashless society will not become a reality where there is low financial literacy. 

Here, governments and private sector players (including small businesses) must do their parts to improve financial literacy.

When people have basic financial education, they will be able to better adopt digital innovations and enjoy the financial advantages they provide. 

This will in turn improve their lives and lead to higher savings rates and better financial health. The more digital innovations they adopt, the more financially educated they can become, and the more innovations they would be capable of using.   

One of the low hanging fruits for UAE businesses here is to help their foreign employees get access to digital banking as an alternative to traditional bank accounts (which many of them can’t access due to strict requirements). 

At NOW Money, we provide mobile bank accounts for the employees of businesses who use our smart, flexible, and cost-effective digital payroll solution. With these mobile bank accounts, employees can receive WPS and non-WPS payments, get access to a debit card, send money back home, make online payments, and recharge their mobile phones. 

Do you want to support the cause of financial inclusion in the UAE? Sign up for NOW Money’s digital payroll solution to provide your employees with access to our inclusive mobile bank accounts. Request a demo to see how NOW Money can improve your employees’ well-being and payroll management.


  • Since at least 2009, the UAE has been making strident efforts to become a cashless society. 
  • This move towards a cashless society has many advantages: convenience and efficiency, reduction of fraud, improvement in cross-border transactions, among others. 
  • A cashless economy also has its disadvantages: identity theft, social exclusion, and the undermining of privacy and anonymity is undermined, among others. 
  • Countries that want to sustainably benefit from a cashless economy must take steps to mitigate its disadvantages while enjoying its advantages. 
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