Credit cards remain the most popular non-cash payment option
Although prepaid cards are rising in popularity, credit cards remain the most popular payment option among consumers in the UAE, industry sources told Gulf News.
There are no absolute figures available yet, but according to Rasool Hujair, CEO of Majid Al Futtaim (MAF) Finance, credit cards constitute more than half of the non-cash transactions in the UAE.
“Credit cards still prove by far the most popular when it comes to cash-less payment methods. The percentage split is 80/20 favouring credit cards,” Hujair told Gulf News. MAF Finance is a provider of credit and prepaid card services in the Middle East and North Africa region.
“The most important feature [of credit card is that] the holder has the flexibility of settling the amount in full or overtime. Prepaid cards are not designed to replace credit cards. Each product has its own segment and target audience to which it caters,” Hujair pointed out.
The UAE’s credit card penetration rate of 53 cards per 100 adults is the largest in the region and on par with the 2012 global average of 52 cards per adult, according to Bhairav Trivedi, CEO of Network International.
However, Trivedi noted that consumers in the UAE, especially expatriates, have “curtailed” their credit cards usage at the point-of-sale (POS) and switched to debit cards, in order to control their day-to-day spending.
“In the UAE, we have been witnessing the importance of debit cards as payment instruments increasing significantly. We have observed that this trend is unfolding at the cost of credit cards, as customers shifted their card usage at the POS from credit cards to debit cards,” said Trivedi.