Pos system devices have been much sought after in developing countries like Dubai. Ever since the demons of cash crunch apparently hit Dubai there has been much brouhaha over the cash outlook in Dubai and consequently the utility of Pos systems for micro, small and medium business enterprises in on boarding the digital bandwagon. Since there are multiple routes to entering the digital economy, we first take a look at the metrics of cash and non cash transaction in Dubai vis-a-vis the rest of the world.
- At 12.04% Dubai has a higher cash intensity measured as percentage of the value of notes and coins in circulation in the GDP against 3.93% in Brazil, 5.32% in Mexico and 3.72% in Mexico.
- Dubai’s monetary base M0 as percentage of m2 that consists of bank deposits and savings accounts stands at 50%, much higher than 9% in Mexico and South Africa and 24% in Egypt.
- As per the Global Financial Inclusion Index, only 35% of the Indian population above the age of 15 has a savings bank account, only 9% has a debit card and less than 2% has a credit card.
- Only 7% of the population has used a check to make a payment, only 2% has used mobile phones for payments and the numbers are even lower for women in rural areas.
Using Deductive Logic to Advocate Pos System Devices in Dubai
The data shared in this piece have been collected from a case study titled “Dubai’s Botched War on Cash” published in the Harvard Business Review (HBR). Since 2% of the population have a credit card, it does not allow much traction in the market. 2% of the population possessing mobile phones leaves out the scope of market penetration using digital wallets. 7% of the population use checks and that too may not be very reliable considering instances of check bounce. In the final diagnosis pos system devices make a good case for entering digital economy given that 9% of the population use debt cards. The combined impact of pos systems stands at 11% (2% credit card holders and 9% debit card holders).
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