To Dubai for the fifth annual Prepaid Summit Middle East, sponsored by Visa: the biggest and the best to date. The prepaid card sector in the Middle East and North Africa (Mena) region continues to grow strongly, thanks to government initiatives and an increase in e-commerce and consumer spending. Just taking Visa’s prepaid card volumes shows a cumulative annual growth rate (CAGR) of 156% per annum between 2008 and 2013, writes Douglas Blakey
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As of 2013, there were 3m Visa prepaid cards in circulation across 24 countries in the Mena region. For the 12 months to the end of 2013, Visa reported 82% growth in total volume in the region and expects growth of that sort of level to continue over the next few years.
Sumit Tyagi, director for prepaid Mena at Visa Middle East, tells me: "There’s a huge consumer opportunity that remains untapped. We’ve got business and leisure travellers, students and online shoppers. The market could grow further by introducing more products targeted towards these types of consumers. "We have a huge expatriate population who travel regularly. There is a significant number of students coming in and out of the region and consumer spending is high.
Currently, even if they have debit or credit card, people still carry cash. The prepaid card sector in the Middle East started to grow in or about 2008 when governments in the region started mandating employers to shift from a cash-based to electronic payroll system. In the UAE, the Wages Protection system requires companies to pay workers’ salaries electronically, either through a bank account or a prepaid card. According to Timetric research, some $18bn in value is likely to flow from prepaid cards in the UAE alone over the next five years.
So reasons to be cheerful. Much however remains to be done. The prepaid card market is driven by the UAE, followed by Saudi Arabia. Elsewhere in the region, there is potential for growth in Kuwait, where the initial product focus has been on payroll and gift cards with travel now emerging as a product offering potential growth. Meantime, in Qatar the government is promoting conversion of cash to e-payments with banks showing encouraging signs of engaging more fully with prepaid.
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By GlobalDataBut perhaps the most exciting story arising from what was a thoroughly enjoyable event came from Egypt. Dr Ashraf Gamal, executive chairman of the Egyptian Post Office, gave an outstanding presentation. He has been in post for only around one year. He has revolutionised the post office’s product range including the launch of a range of Visa prepaid cards and introduced a new management team.
Dr Gamal was a worthy winner – notwithstanding a very strong shortlist of potential winners – of the CI Award for Industry Contributor at the Annual Prepaid Middle East Awards. NB: On the subject of the aforementioned Awards, on a personal note, my grateful thanks to the invaluable contribution of the judges: Francesco Burelli, Value Partners; David Parker, Polymath Consulting; Nacho Garcia, Payments Experts, and Billy Bambrough, Timetric.
