An A to Z guide on payment options in the United Arab Emirates

Be it shopping for clothes in the UAE or your daily needs, the many payment options available, right from cash, to credit and debit cards, might be confusing; especially for a first-timer. So what should you use? Read on to know-

Cash

Accepted across local markets and high-end stores, this is the most versatile mode of payment. The official currency of the Emirates is Dirhams. You can exchange your currency at the various Money exchange companies that dot the streets throughout the Emirates. Also, you have the option of getting Dirhams at your origin airport or any airport in the UAE. However, it is preferable to scout for the best rate and go for the exchange company that offers it. It is the most widely used mode of payment in the UAE as it does not attract any additional charges. The only risk is theft.

Cheque

Cheques are amongst the least used mode of payment today. They are used in case of large transactions. You get a cheque book when you open a bank account. However, you need to be cautious when issuing a cheque; because a cheque bounce, might attract a significant penalty and even land you behind bars.

Credit card

This is the second-most preferred mode of payment with more than half of the population using credit cards for making their payments regularly. Credit cards offer the convenience of not having to worry about your bank balance while using them. Also, you can easily split the purchase into EMIs when purchasing so that you can pay as per convenience. Also, the complimentary offers that come with the credit cards and the rewards on shopping, dining and travel, make it an attractive option for the residents and especially expatriates.

Debit card

The debit card is the next popular mode of payment. Debit cards offer more security and control over your purchases. It is protected via a highly secure four-digit PIN, and a majority of the banks even offer you the option of a code sent to your mobile to authorize the transactions. You can also use Debit cards at ATMs to withdraw cash from your account. Unlike credit cards, the use of debit cards for purchase does not attract transaction charges. However, using a debit card to withdraw cash from any ATM of a bank other than your own, is chargeable.

Prepaid cards

These cards are similar to debit cards, with the only difference being that you need not have a bank account. The prepaid card can be used across the Emirates as well as abroad for transactions. Some companies even offer the added advantage of withdrawing money from selected ATMs. Besides, shopping with partnered brands can also earn you rewards, cashback and reward points. The cards are available at petrol pumps as well as other partner outlets.

Online Banking

Your credit card and debit cards enable you to make payments or transfer funds online. It makes online shopping a breeze. The transactions are conducted using secure payment gateways, and hence are safe.

Digital payment

Digital payments are a big thing in the UAE. Making payments via the phone is convenient and relatively safe; As a result, the usage of mobile wallets is increasing. There are many players in the digital payments market like Trriple Payments, Beam Wallet, Bridg, Cardtek, Mashreq Bank, Emirates NBD, OMA Emirates and Network International. Apple Pay and Samsung Pay, too, are widely used for the convenience they offer. Meanwhile, 16 banks in the UAE are coming up with a digital payment solution called Klip to promote cashless economy and support the central bank of the UAE.

While making a purchase always remember to check for additional charges and other fees on the method of payments you will be using. Also, look for rewards and points to make the most of your purchase.

Get rewarded for spending money!

A good cash back card makes spending money (literally) worth your while. We enumerate how it can help you save up on essential spends.

As human beings, we are hardwired to look for benefits and rewards in whatever we do. Case in point: coming across a sale on clothes at your favourite store. You cannot pass up the chance to get a good bargain on some new clothing, because it means that you’re spending less to get more.

Banks in the UAE use this same desire for rewards when offering customers cash back cards.

How a cash back card works

A cash back card is a credit card that offers a host of rewards in the form of cash back for spending money for certain categories of goods and services, and/or at member retail outlets (i.e. partners with the bank offering you the card). The cash back is a rebate on the overall percentage of spending on the card. Some banks even have the same reward system for debit cards.

The leading banks in the country offer cash back cards with excellent benefits, such as:

·         Up to 10% cash back on groceries, school and university fees, dining out, and telecom expenses.

·         You get 3% cash back on groceries, dining out, school and university fees, and telecom expenses for expenses in the range of AED 2,500 to 7,499.

·         You get 5% cash back on groceries, dining out, school and university fees, and telecom expenses, for expenses in the range of AED 7,500 to 14,999.

·         You get 10% cash back on expenses above AED 15,000.

·         You can call the bank’s designated number to redeem the cash back points whenever you wish.

·         The cash back points are considered valid for a period of two years, during which time you may redeem them. But you must have minimum 100 cash back points to redeem.

Why get a cash back credit card?

There are a few significant perks to using a credit card that has a good reward points system in place. They are:

* Save money: Since you’re going to use your credit card anyway, you might as well have an incentive to do so. Cash back points are a great incentive, especially when they are offered on daily spends.

* No need to keep track: The best banks in the UAE offer this category of credit card, and they are diligent about recording your spends and keeping score of the cash back points you earn. Thus, you don’t need to keep track of your reward points by yourself.

* Simple redemption: Whenever you feel that you want to redeem the reward points, you can simply place a request online or use the bank’s designated redemption phone number to do so. No other action is necessary to receive the cash back.

5 reasons to take a personal finance solution

Leading banks in the country offer financial solutions for a range of needs. Both expats and residents can avail of these.

Life is full of many surprising twists, and you try and navigate them to the best of your ability. However, certain situations require more money than you have at your disposal. It could be in relation to an emergency medical procedure that a family member needs to undergo in a foreign hospital. Or an investment opportunity you wish to explore.

Whatever the nature of the need, you will require a personal finance solution to see you through. Your bank can help you meet the requirement with a Shari’a compliant financial solution at this point.

What are the circumstances under which you may require a personal finance solution? Consider these:

#1 To pay house rent.

Paying rent is an imperative expense, whether you are seeking to live in a rental accommodation for a short period or a longer duration. Suppose you have shifted into a rental home while you redesign your house. You can take a personal finance solution like a short-term borrowing to pay the house rent while you finish the refurbishing of your premises. Or you could be in the process of saving up to buy a house and be lodged in a rental home at the moment. A personal funding solution can help pay the rent.

#2 To finance your home remodel.

Apart from paying rent, you can even take a personal finance solution to finance the remodel of your house. House construction, repairs and renovation result in extensive costs, which you may not wish to spend upfront from your available reserves. Finance from a leading bank in the UAE can help pay for the costs of remodelling the house. This ensures that there is no stoppage of work due to lack of funding for the same.

#3 To pay for children’s higher education.

If your dearest wish is to send your child away to a prestigious foreign university, then you can make this dream come true by availing of a good Murabaha-based finance solution that offers up to 2 mn Dh for expats and up to 4 mn Dh for UAE nationals. All the costs – tuition fees for the year, accommodation, course fees, study trips, etc. – can be funded comfortably from this solution.

#4 To take a long vacation abroad.

Travel broadens your horizons, and you look for every opportunity to travel abroad with your family. However, you have been putting off taking a long trip extending a few months with your family, fearing the high costs of such a holiday. Why put off your dream holiday for later when you can buy it today? Leading banks in the UAE are offering financial solutions to fund your foreign holiday with reasonable profit rates and quick processing. So, start booking your tickets and pack your bags!

#5 To fund your sabbatical from work.

There comes a time when you contemplate a change of career, or seek a few months off from work to resolve your health problems and personal issues. However, you worry about paying household expenses when you take time off from work. At this juncture, you can apply for a finance solution to meet the demands of the months that you will not be making an income. The solution comes with a low profit rate and with a repayment period of up to 4 years, so your personal reserves are not dented in a major way when you repay the loan.