Cash is king in the UAE
There is strong potential for growth in electronic payment methods in the region as only 10 per cent of transactions in the UAE are paid for electronically compared to 15 per cent globally, senior MasterCard officials told Gulf News.
There is a “huge growth curve for conversion” from cash to electronic payments, said Ann Cairns, president of international markets at MasterCard during the inauguration of the company’s Dubai office on Thursday.
The cost of dealing with cash ranges from 0.5 to 1.5 per cent of a country’s GDP annually, varying from one country to another, which reveals that the government can save more by converting to electronic payments, she said.
There is “rapid progress” in developing contactless payment methods in the GCC because of its concentrated cash spending and the company is planning to bring 1,000 additional contactless terminals to the UAE by next year, said Michael Miebach, president for Middle East and Africa at MasterCard.
The UAE currently has 1,000 contactless terminals and Qatar has 500 terminals, compared to two years ago when there were none in the GCC, he said, adding that there are 400,000 contactless cards in the Middle East.
MasterCard is now focusing on bringing electronic payment methods in to daily transactions, working with banks and acquirers to bring credit card and contactless terminals into small groceries by the end of the year, said Miebach. “When we build the infrastructure, we build habits.”
“Everyday spend is the next focus,” he said, adding that MasterCard is already seeing spending on non-traditional categories such as private school fees and insurance payments.
“Contactless payments are changing the way consumers make day-to-day transactions the world over. Globally, PayPass is present in 50 countries and accepted at nearly 700,000 merchant locations. As of the fourth quarter of 2012, MasterCard or Maestro PayPass cards or devices can be used at nearly 700,000 merchant locations, a 64 per cent growth from 2011,” said Cairns.
“In the UAE, PayPass contactless payments are accepted at 950 terminals across 73 merchants as of March 2013. Contactless payments are still in its nascent phase in the UAE, and we expect a rise in these payments as more consumers become familiar with the technology. The expected expansion in merchant acceptance will further drive the move towards wider contactless payments usage.” Miebach noted.
There is a total of 10 million credit cards in the Mena region, of which 52 per cent are MasterCard, Miebach said. The company’s international business saw just under 16 per cent growth last year, according to Cairns.
- Understanding the ripple effect: 8 reasons the US economy has slowed down in Q1 of 2015
- Can Bahrian emerge from the oil price plunge 'stronger than ever'?
- Egyptian stocks plummet as Yemen confict deepens
- UAE sweetens flotation regulations to attract more investment
- Replacing Switzerland? Why Lebanon isn't keeping its banking secrecy a secret
- Dubai Trade marks AED 1 billion transacted over Rosoom electronic payment gateway
- STS Group Brings New Hypercom Electronic Payment Terminals to Local Businesses
- Dubai eGovernment collects AED 1.5 billion in 2009 through electronic payment gateway
- MoF enhances the status of the e-Dirham system within the UAE’s wider e-payment and collection network