The silver lining of Black Friday

Internet shopping is about more than just deals, it pushes society to be cashless

Encouraging cashless transactions will ease the introduction of the VAT. Reem Mohammed / The National

Over the past decade, internet shopping has steadily gained popularity around the world. During the busy holiday shopping season, which officially got under way last Friday, analysts pay close attention to how and where we spend our money for indicators of any economy’s strength. More and more consumers have taken advantage of deals this year offered by shopping portals such as souq.com. This is a good sign but for a reason you might not be considering.

The shift into e-commerce is a welcome development in our consumer sector because it will help facilitate larger economic initiatives in the works. Of course, e-commerce is safe, reliable and full of great value for shoppers. Perhaps the biggest benefit is the cashless nature of e-commerce and that is because of the impending introduction of value-added tax (VAT) in the country.

With VAT set to take effect in 2018, shopkeepers who have operated essentially cash-only enterprises with little financial oversight will need to codify their businesses to pass on the tax on goods sold. For the convenience-store owner who has never kept diligent financial records and only accepts cash for payments, this is going to require a massive shift.

But if consumers naturally gravitate towards a cashless society, as is evident in the embrace of e-commerce, this shift is going to be much smoother for society as a whole. In essence, we need to get more people using cards instead of cash. The market, through internet sales on occasions such as Black Friday and Cyber Monday, has created the right incentives to entice people to embrace cashless shopping.

This is great for consumers, because credit and debit cards are regulated and safe methods of paying. When a customer pays for an item with a credit card, there is also a clear record of that transaction, unlike with cash payments. So shopping festivals are about much more than getting the best deal. They are a market invention that is helping prepare society for a profound but necessary shift in how to keep account of goods that are bought and sold.