Prepaid to grow rapidly in GCC region
The prepaid mechanism is ripe for massive growth as government initiatives combine with commercial opportunities of usage in the Middle East, according to Colin Loubser COO of NovoPay.
Loubser, who is considered a global expert on prepaid opportunities, is speaking ahead of the GCC Cards summit 2010.
He said that the prepaid segment is predicted to drive 40 percent of total consumer spend globally and the region is no exception.
Loubser will be a key speaker on the topic 'Maximising the Prepaid opportunity and creating the right brand for today's consumer'.
David Parker, Director Polymath Consulting, also a key speaker in summit added: "GCC governments are introducing public initiatives which propel the usage of prepaid.
"In UAE, the E-Dirham card to improve government's payments, the Metro system operating on a prepaid ticket and the regulation on electronic payment of salaries known as Wage protection schemes; are examples of new opportunities in open loop payroll cards," Parker said.
In 2009, 65 percent of UAE banks licensed for the Ministry of Labour's wage protection system, a move welcomed by community and ILO alike. An estimated one million workers in UAE alone stand to use the system each month.
Prepaid mechanism provides important access to financial services, to the high-volume low-value consumers who may be unbanked or new to banking according to Parker.
The e-dirham and G2 E-Dirham, the second generation of E-dirham (G2 E-Dirham) are already paving roads for convenient and foolproof payment mechanism in UAE.
"The awareness of prepaid is already huge in GCC region," said Parker.
Referring to a research conducted by TNS Middle East, Parker suggested that almost 80 percent of consumers in UAE, Egypt and KSA understood the prepaid products and found it useful.
These factors accelerate acceptance of the broad prepaid concept according to Parker.
Shankar Sharma, Chief Executive Officer of Arab Financial Services Company agreed: "Key drivers of growth in card space in the next two to three years will come from prepaid programmes.
One of the Summit's supporter and a leading financial expert, Sharma added: "It is likely that the wage payment system of mandating payment through non-cash method get extended to other countries within GCC.
"Growth in debit cards will continue as most issuers have already embraced debit card programmes.
"Even as the banks are pulling more restrictions on credit cards, technology has made the prepaid products more accessible to consumers.
"Prepaid programmes in retail will be emerging as a major trend. The retail sector will offer prepaid card in forms of gift cards and travel card for everyday payment", said Sharma.
According to Parker the prepaid growth is driven by three factors, firstly cost and convenience will drive consumers to prepaid, second the corporate has a huge opportunity to save costs through process re-engineering and greater efficiency in operations in prepaid.
"And last but not the least, for the banks, prepaid opens an entire new line of product expansion and market segment," he said.
GCC Cards Summit 2010 will provide a platform to discuss debate and create a framework for market players to share success strategies on customer delivery & service, product innovation and bottom-line management.
Summit is set to held at Mövenpick Hotel, Bahrain from November 1-3, 2010. Over 150 delegates from GCC, Europe and Asian sub-continent are expected to participate in the event.
- GCC Investment Strategy and Sectors Outlook for 2006
- GCC countries: Growing use of credit cards
- Regional asset management to grow rapidly with regulatory changes
- Regional gas supply struggling to meet rapidly increasing GCC demand, says BP
- Branding Experts and Marketing Leaders to speak at the GCC National Branding Strategies Summit