Middle East consumers show preference for credit over cash
Middle East Visa transactions rose by 25 percent in the first quarter of 2003 to 11 million from 8.8 million in the first quarter of 2002. For the total 12-month period ending March 31, 2003, transactions totaled 186 million compared to 140 million for the same period in 2002, stated a press release.
Similarly, total expenditure rose by 29 percent from $32.7 billion as of March 31, 2002, compared to $42 billion as at 31 March 2003. Visa debit cards are increasingly used for daily spending, generating over $38 billion in expenditure for the year, a 30 percent rise over last year. This accounts for over 90 percent of overall spending by all Middle East Visa cardholders during the same period.
“More and more banks are introducing Visa Electron to their customers in replacement of their proprietary ATM-only cards,” explains Visa’s General Manager for Middle East, Peter Scriven.
Today, debit cards make up approximately 85 percent of all Visa cards in the region and are ideally suited for every day payments. Visa’s latest results on debit card usage also show a strong shift towards retail spending and a move away from cash withdrawals. The number of
debit card transactions made at petrol stations, supermarkets, restaurants, and other shops have taken the lead over credit card payments, representing 53 percent of all Visa transactions made at point of sale locations.
Scriven explained that typically new debit cardholders start by withdrawing cash, then progress to using plastic for traditional cash transactions such as food, petrol and household goods. “Now, people are using debit cards such as Visa Electron to pay utility bills and medical bills, and debit card spending in outlets such as book and record stores is now an everyday event.”
Visa is an international payment brand, generating more than $2.3 trillion in annual volume. With its 21,000 member financial institutions and their cardholders, Visa is also operating Internet based payments. — (menareport.com)
© 2003 Mena Report (www.menareport.com)