Consumer Adoption of Digital Payment Systems in the UAE: A Study of Customer Behaviour

Abstract

The Central Bank of the UAE's Emirates Digital Government Strategy and Financial Infrastructure Transformation Programme are driving positive growth in the UAE's volume of cashless transactions, which is one of the more ambitious regions of the GCC. Despite the diversity of mobile phone wallets, contactless cards, QR codes and real-time transfer rails such as Aani, the penetration rates are different across different consumer segments and cash is still the preferred payment method for most consumers for everyday retail transactions. The constructs of the Unified Theory of Acceptance and Use of Technology (UTAUT2) for behavioural determinants of consumer adoption of digital payment systems in the UAE are utilised, alongside constructs of trust and perceived security specific to the payment context. Data was collected using a five-point Likert structured questionnaire and the purposive sampling technique was used to select 160 respondents in Dubai, Abu Dhabi and Sharjah. Descriptive statistics, Cronbach's alpha reliability testing, Pearson correlation, independent samples t-test, one-way ANOVA and multiple linear regression were used in SPSS version 26 to analyse the data. In the reliability analysis, all the alpha coefficients showed high internal consistency ranging from 0.782 to 0.891 in all constructs. The regression results indicate that the perceived usefulness, ease of use, security and social influence explain 61.4 per cent of the variance in the adoption intention, with perceived security being the most significant predictor. When the other variables were introduced the facilitating effect was more indirect and non significant. The ANOVA results showed that there were significant differences in adoption across the age groups, while the t-test results did not show any significant gender difference. The paper concludes that in the UAE, the challenge for digital payments is not the technology, but the steps of trust building and security assurance; and offers implications for banks, fintech operators and regulators.