Digital payments, used to refer to electronic payments done via a digital device, have become the most appealing form of transaction for many people. 

A recent survey by Onbe, a corporate disbursements platform, found 74% of 1,000 consumers prefer digital payment methods to traditional forms. Also, 65% of them believed that digital payments are more secure than cash, check, or money order. Digital payments, done via mobile phones, computers, or other digital channel communications, can be partially digital, primarily digital, or fully digital. 

Nevertheless, irrespective of the type, what is certain is that digital payments will become increasingly more important and prevalent in the UAE real estate sector.

This year, the Dubai Land Department announced a collaboration with Emirates NBD that will allow tenants to make direct rental payments using their bank accounts instead of cheques.

According to HP Aengaar, CEO at Asteco, this direct debit system, approved by the Dubai Land Department, will benefit all parties, including property management firms, owners, investors and tenants. 

“The direct debit mechanism is best suited for managing the cashflow for both the tenant and the landlord as it provides a more mature and stable form of regular payment instead of post-dated cheques,” he said. 

According to Richard Aybar, Managing Director, The Devmark Group, the move by DLD “indicates that the real estate sector is poised for transformation”. 

Aengaar adds that the digital payment system for administration and Ejari fees was successfully introduced in early 2020. “We can see that about 75% of our tenants have taken advantage of the digital facility.” 

This isn’t a surprising figure given the number of benefits digital payments offer. “The benefits of digitisation in the real estate sector are apparent – lower fees, increased transparency, speedy and efficient settlement, removal of manual processes, and lowered security/fraud threats,” says Aybar. 

Due to these advantages, many “developers are starting to move towards accepting the use of digital currency for real estate transactions. Everything from maintenance fees, installments, and rental payments could be settled through cryptocurrencies and digital payments," he said. 

Aengaar echos a similar view. “Digital payments allow tenants to make payments from the comfort and safety of their own homes, or without the need to carry cash or visit ATMs,” says Aengaar. 

“Digital payment methods represent a significant move in the market towards the elimination of manual processes. At Asteco, we are strong advocates of the use of digital technologies to facilitate communications and provide facilities to customers from the comfort of their homes,” he adds. 

However, he expects people used to the traditional methods of payment to find the shift hard. “Change takes time and accepting new ways that challenge the status quo is always a challenge. However, as more people start to realise that digital payments are a practical and trustworthy payment method, we see more and more tenants choosing to use these methods on an ongoing basis.” 

Looking ahead, Aybar believes that cryptocurrencies will become the standard form of payment in the future.

“One major concern around cryptocurrencies has always been volatility; however, regulated platform crypto solutions offer payment tools that can streamline the transfer of value and remove any volatility risk. We believe this will become a standard form of payment soon, given that many buyers of Dubai real estate are based internationally and don’t necessarily have local bank accounts. With the recent geopolitical issues in Europe, core target markets would appreciate alternative forms of transferring value into real estate here,” he said.