UAE: Prepaid cards to curb default on payments
Defaults on credit card payments and poor financial management could ease as prepaid cards become more popular in the UAE, experts at the Prepaid Summit Middle East said yesterday.
Prepaid card payments are likely to grow faster than credit and debit cards as they started from a smaller base, said Richard Bialek, Senior Business Leader of Prepaid Products at Visa.
“A strength of prepaid is the consumer’s ability to determine how much to put on the card, it’s an excellent budgeting tool. So for that reason it will be an excellent entry product for many consumers who haven’t been banked. That’s the attraction for the underserved, under-banked,” said Bialek. Besides potentially improving personal finance management, prepaid solutions allow consumers to manage risk when shopping online, experts said. “As online purchases increase and people have fear of security online, then why not use prepaid which you can load with a limit as opposed to giving out a credit card number,” said Mohit Aery, Vice-President of Acquisitions and Portfolio at mashreq.
The UAE is expected to see $18 billion in prepaid card payments over the next five years, he said. The biggest potential for growth in prepaid cards lies in travel, remittances, gifts at retail outlets and online gaming, according to a new study by TNS, a marketing research firm.
- Why Saudi's latest announcement to open up the stock market to foreign investors is a good move
- Saudi expected to emerge as seventh largest capital market and it's a very big deal!
- Time for some serious contemplation: Middle East firms face $91bn refinancing needs
- What's really holding Islamic Banking back?
- The rise of the Chinese renminbi: an unmatched opportunity for Qatar?