Harshvardhan Singh, head of cards at Emirates Islamic Bank, says that it is still too early to estimate the speed and the extent to which prepaid cards in the Middle East will displace some cash transactions. As Valentina Romeo reports, Singh remains upbeat about prepaid growth prospects
At Emirates Islamic Bank Harshvardhan Singh leads the Cards business, managing credit, debit and prepaid card propositions, including partnerships and loyalty.
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He specialises in product development, channel management, and consumer marketing.
Harshvardhan has previously worked with Citibank, Standard Chartered Bank and Tata Administrative Services across various areas such as CASA, term deposits, debit cards, prepaid cards, credit cards.
In these positions he was involved in a range of strategic and tactical interventions for improving the size and quality of card portfolios and driving effective sales programmes across businesses and through existing and alternative channels.
Singh is one of the keyonote speakers at Cards International’s Prepaid Summit: Middle East 2014, on 19 March at The Conrad Hotel, Dubai.
Ahead of the conference, he discusses with CI his take on the current prepaid cards sector in the region.
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By GlobalDataCards International (CI): Prepaid cards have traditionally been the preserve of the under-banked – do you think they are a desirable product for more mainstream customers?
Harshvardhan Singh (HS): The impact that prepaid cards can have on the under banked can be transformational in nature, because they enable customers to have ready access to their money in a secure and convenient manner. As a result, there is a greater focus as well as coverage on this segment for prepaid cards.
However, prepaid cards can provide a variety of user opportunities for all kinds of customers, including over-the-counter shopping, gifts, travel and the like, because they offer the benefit of being safer and more convenient to use than cash.
CI: Has the Bank Muscat prepaid card fraud, which occurred this time last year, affected the image of prepaid cards in the region?
HS: I would not like to comment on the issues with another bank
CI: What is the specific importance of prepaid cards to the MENA region? What are the major trends? For 2014?
HS: The MENA region has a large number of expatiate and specifically under-banked expatriate population so pre-paid cards are of special importance to the region. Recent trends in the UAE include a move by employers to link pre-paid salary cards to the Government’s WPS system to provide payroll functionality as well as value added services like loyalty.
At the other end of the spectrum, the region is also home to a significantly young population, often with large disposable incomes. Given the considerable commercial activity and easy access to some of the leading consumer brands in the world, pre-paid cards provide an efficient tool to introduce young people to financial literacy programmes or control spending.
CI: How is the prepaid market expanding geographically in the region? Which are the most attractive markets?
HS: Most markets within the region which are stable from a geopolitical point of view continue to be attractive.
CI: What is the demographic? Would you mainly target a young audience?
HS:The main target audience for pre-paid cards include those segments of the population that are under banked in terms of need; blue collar workers who often remit most of their salaries back home, the youth who are open to new ideas, and students whose guardians are interested to control the spending habits of their wards.
CI: Do you see prepaid as complementary to credit and debit cards, or as an alternative?
HS: Primary usage of pre-paid cards will be as an alternative to credit or debit cards, with some of the usage being complementary, like online usage for the more security conscious customers.
CI: Do you think prepaid will succeed in taking over some of the cash payments that credit and debit cards have not yet eliminated?
HS: The Middle East is primarily a cash-focused region and we believe the predominance of cash could continue for a while. Having said that, we definitely see a growth in pre-paid transactions and prepaid cards could take over some of that space over a period of time. It is still too early to estimate the speed and the extent to which this may happen.
CI: Has regulation in the region proved favourable for prepaid products? What is the current regulatory framework in the industry?
HS: The current regulatory framework is largely aligned with debit cards
