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Innovation in the prepaid segment is a key driver to creating a cashless society in the Middle East and is acting as a catalyst for greater financial inclusion, payment firm Visa said in a media statement yesterday, coinciding with the Prepaid Summit Middle East 2015.
Findings released by the global payments technology company indicate strong growth in the segment and usage patterns that demonstrate the important role of prepaid products in the migration to electronic payments.
In 2014, Visa Prepaid products in the region indicated that 80 per cent of spend was for the purchase of goods and services, (40 per cent of which was on e-Commerce purchases) and only 20 per cent of the total value was withdrawn in cash at ATM.
In the UAE, 20 per cent of the total spend on prepaid cards occurred cross-border, 36 per cent was point-of-sales (POS) payments, and 13 per cent online purchases.
Prepaid payment volume in the rest of the GCC also painted a clear picture of growth including increased international usage where 62 per cent of transactions were cross-border and 82 per cent of spend occurred at POS, 41 per cent of which were eCommerce purchases.
“Prepaid sector growth in the region is being driven by a host of different factors, including growth in travel and tourism, increased preference and confidence in online spending, as well as the rapidly expanding corporate sector, where businesses prefer to use prepaid products to control operating costs such as incentives and per diem payments,” said Fiona Duncan, Head of Prepaid for the CEMEA region at Visa Inc.
“But perhaps one of the most important drivers for prepaid card usage is the growing number of government initiatives committed to bringing about financial inclusion. These projects range from enforcing wage protection to delivering allowances and donations in a targeted manner and it demonstrates that prepaid cards are increasingly finding new and innovative uses in the Middle East.”
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