As prepaid solutions make their way to Middle Eastern
markets, payment networks, banks and other stakeholders are joining
forces to smooth the path ahead. Visa CEMEA recently launched one
of the first prepaid gift cards in the region and is confident many
more will be rolled out soon. Victoria Conroy reports.
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The Ibn Battuta Mall prepaid gift
card was launched in August 2009, in conjunction with Visa CEMEA,
Nakheel Retail Shopping Malls (owner of the Ibn Battuta Mall), and
payment processor Global Processing Services. The card, launched on
the Visa Electron platform, is issued by Union National Bank (UNB),
based in the United Arab Emirates (UAE), and is available to
purchase at all the mall’s information counters.
UNB was the first bank in the UAE to introduce
the prepaid card concept with its Hadiya gift card offering,
launched in 2006, which incorporates several card designs and the
option for cardholders to personalise the card. The Hadiya card is
valid for six months and allow a maximum load value of AED3,500
($953).
Middle East’s first open-loop gift
card
The Ibn Battuta Mall gift card is
the first prepaid open-loop gift card to be launched in the Middle
East and is also the first prepaid product of any type to be
co-branded and distributed by a third party and not directly by a
bank.
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By GlobalDataThe Ibn Battuta Mall is one of the largest
shopping malls in the Middle East region, covering 1.2 million
square feet. Comprising six separately-themed courts, it is host to
a wide range of retail and entertainment merchants including the
UAE’s first IMAX cinema, and restaurants. There is space for over
5,000 cars, taking the total site space up to 5.4 million square
feet. There is considerable clout behind Nakheel Retail as it is
part of Retail Corp which itself is part of Dubai World, one of the
largest conglomerates in the Middle East and one of the most
powerful real estate developers.
According to Marc Jones, marketing manager of
brands and distribution at Retail Corp (parent company of Nakheel),
there are plans to roll out the card at other locations.
“We are launching a new card at our in-house
sports brand Go Sport in March [stores are located at Ibn Battuta
mall, Mall of Emirates and the soon-to-open at Mirdiff City Centre
& Khaladiya Mall in Abu Dhabi],” he told CI.
The launch of the card was timed to coincide
with Eid, the Muslim holy festival, but it is being promoted as a
gift idea for other events such as birthdays, weddings, and holiday
shopping. It can also be used as a company reward and incentive
proposition. Given that prepaid is a relatively new concept for the
UAE and the wider Middle East region, stakeholders in the Ibn
Battuta card have embarked upon a comprehensive consumer and
employee education campaign.
“As well as in-store and customer service
training, we undertook a large-scale media campaign and have
extensive POS and communications in the mall and on our website,”
Jones told CI. “One of the quick-win successes has been the amount
of corporate sales and incentive schemes that small businesses have
bought into.”
He added that Retail Corp aims to sell around
220 cards per month with an average card value of AED400
($108).
Visa confident about prepaid
prospects
In the Middle East, corporate,
payroll and remittance prepaid solutions are expected to grow
strongly over the next few years, but according to Stuart Isted,
business development manager at Visa CEMEA, consumer prepaid
offerings such as the Ibn Battuta gift card have positive prospects
too.
“The benefit of the prepaid category is that
it has a broad spectrum of product propositions which provide an
effective way to extend financial services in segments that have
previously relied on cash,” Isted told CI.
“Consumer prepaid is a significant part of the
prepaid product set. The focus at Visa is to ensure we have the
capability to support our partners in products that are right for
them, whichever segment[s] that issuer is targeting.
“In brief, each issuer will have their
specific business objectives whether that is to deepen corporate
relationships or to identify new consumer customers or cross-sell
to an existing base. The Ibn Battuta card is a hybrid of all these
factors as it supports the mall in reducing cost of cash and
developing a wider brand preference and supports the issuer in
their corporate and consumer relationships.
“I am confident with Visa support issuers will
be able to identify the prepaid markets that are right for them,
that meet their individual business objectives, whether that be in
the corporate environment, consumer or both.”
Consumer education a key
factor
For Visa CEMEA, the advent of new
payment technology will undoubtedly help access and usage of
prepaid solutions, but it is consumer education above everything
else which will drive growth.
“The key aspect for any prepaid sector is
consumer awareness, bringing those who are underserved into
financial services and explaining the benefits of prepaid and
remittances is important in developing the segment,” Isted
said.
“We are focused on our partnerships with
stakeholders, helping them to succeed in their implementations
across a variety of distribution channels and mediums. I believe
each product has the right mix of channels to make it successful,
and our job as an industry is to ensure we provide the right
solution that meets the end users requirements.”
Although Visa CEMEA does not have a figure for
the number of live prepaid programmes in the Middle East region,
Isted said the market is ripe for further growth.
“The market is continually evolving for
prepaid and as we have seen over the past few months there have
been a number of launches across a variety of product categories
within prepaid,” he added. “Visa’s leadership role in continuing
the development of prepaid in the region is to create awareness
both at a bank and a consumer level.
“The scope of prepaid products means that
there are a wide variety of areas which issuers can tap and I
expect that the prepaid category will continue to replace cash as
issuers become more adept at identifying opportunities that
resonate with them. Our aim at Visa is to support stakeholders and
help them to develop winning propositions.
“By doing this I expect the market will
continue to see new products and launches across a variety of
segments.”
