Kippreport looks into the new trend and the change in strategyNovember 29, 2015 5:01
Middle East, Central Asia and Africa to pass $250b mark in transactions by 2012
E-downloads perfect for prepaid; Region has many unbanked women and youth; Government payroll identified as a key growth area; TNS exclusive research predicts 50% of UAE consumers are ready for prepaid
March 30, 2011 4:18 by Reuters
The greater region, including the Middle East, Central Asia and Africa, earmarked to pass the $250 billion mark in 2012, according to a experts at the second regional Prepaid Summit held in Dubai recently.
The two-day forum identified seven key growth segments across youth, gifts, travel, general purpose, remittance, payroll and government payments.
In his key note address, Visa’s Scott Salmon shared that Visa has witnessed 182 percent growth in the prepaid segment in Middle East last year.
“The Middle East represents one of Visa’s fastest growing prepaid markets. There are a number of important factors driving this growth, including globalisation of the work force; increasing spending power among youth; a general shift from paper to electronic payments; as well as the increasing desire among consumers for more convenient payment methods,” he said. Salmon heads Visa’s prepaid division across Asia Pacific, Central Europe, the Middle East and Africa.
Kamran Siddiqi, Group Country Manager, Visa Middle East said that prepaid is one of the most diverse payment solutions on the market today and agreed that it can provide unique electronic-driven solutions, particularly for unbanked segments that are not currently served by debit or credit.
“Prepaid is proving interesting for both consumers and organisations. In the consumer segment we are seeing that gift and travel spending particularly lend themselves to prepaid. Meanwhile, corporates and governments are catching on to the ease of prepaid for payroll and disbursements.”
The Summit also unveiled exclusive research on prepaid and consumer trends by TNS Global. Satish Dave, Senior Director, Financial Service revealed that just six percent of UAE consumers are using a prepaid product in place of cash and credit cards, but that almost 50 per cent of consumers are ready to shift to a prepaid product immediately.
Dave further identified unbanked but affluent populations to be main driver of general purpose prepaid products, and he said that the youth segment emerged as the fastest growing segment.
“The UAE alone has a youth population of around 450,000 and our research revealed that one third of them see prepaid as a useful tool for their daily life. In addition the prepaid potential is cutting across markets, with both unbanked teens and women across multi income levels showing an interest in prepaid.
“Turning to Saudi Arabia, the Kingdom has a youth market of more than six million falling in the 15-19 age group. Presently, more than half have no access to a card or even to a bank,” he said.
Riding high on the youth potential, complementary online content is seen as a tandem growth channel, with many delegates suggesting that mobile, internet and e-commerce convergence could be used to drive prepaid growth even further.
Indeed, according to Franceso Burelli, Principal at Value Partners, a new trend of micropayment is emerging, again in the youth segment.
“The online games segment alone has 400 million active users worldwide, all ripe for a prepaid product to support swift purchase and download of new games. In addition, micropayment potential also lies in the download of digital music, software and content,” he concluded.
The second day of the summit bought prepaid experts such as Citibank, Commercial Bank of Kuwait and UAE Exchange Centre who shared their future strategies in prepaid sector with more than 200 delegates.