Oman: Electronic Launch

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Oman's Information Technology Authority (ITA) is planning to officially launch its e-payment gateway (ePG) on August 30, as part of its efforts to drive the sultanate into a fully-fledged digital society.

Formed in 2006, ITA is the government body charged with executing national IT infrastructure projects and supervising all initiatives related to the implementation of Digital Oman.

The e-payment solution will enable individuals and businesses to pay for government services and purchase products through the internet. Prior to this portal, there were no means of making payments online in the sultanate and no way for merchants based in Oman to sell their products and services to customers across the world via the internet.

According to Muhanna Moosa Baqer, manager of ITA's e-payments, the new portal will come as a fillip to the government, businesses and consumers alike.

"If we look directly at savings for the government, administrative costs will be reduced through the use of less stationery and, more importantly, the better utilisation of labour resources. Currently the government spends a lot of money on employing people to process payments. With the new ePG system, these workers can be re-trained to obtain skills in customer service and marketing," he told OBG on August 19.

"The government will also be able to manage its finances better since people will be more likely to pay their bills and fees on time if they can do so from home. Of course, there will also be intangible socio-economic benefits such as a more efficient workforce that won't be wasting time in queues at cashier counters," Baqer added.

ITA has built its system on the MasterCard Internet Gateway System (MIGS) platform, a turnkey payment solution for merchants and organisations that require a secure and more efficient way to process payments. Bank Muscat will serve as the acquiring bank for all payments. Plans are underway to sign deals with other banks.

Mohammed S. Al Harthy, managing director of Omania E-Commerce, one of the sultanate's first and leading e-solutions providers, spoke to OBG on July 20 about the business benefits of an ePG system.

"Firstly, for a business to conduct e-commerce, it must have an ePG system in place to process online payments. Once that is established, the opportunities are endless for all types of businesses to attract more customers through the internet," Al Harthy said. "Omanis are busier than ever today and the more convenient a system is to finalise transactions, the more attractive and beneficial it is for all," he added.

Despite the success ITA has had in rolling out new initiatives such as ePG, Oman remains limited by infrastructure and poor internet penetration. Only 12% of the sultanate's residents use the internet, and just under 4% subscribe to it. These penetration rates are among the lowest in the region.

Rafid Abdulla Mukadam, general manager of Infocomm, the IT company that integrated the Ministry of Sports Affairs' website with ITA's ePG portal, told OBG on August 13 that "many Omanis do not subscribe to the internet because it is too expensive. Subscribers pay for the number of megabytes they download, as opposed to paying a fixed monthly fee as they do in most other countries." He added, "it can take months to get connected with an ADSL line and people just cannot be bothered with these frustrations."

In an effort to increase awareness, the ITA has embarked on a number of promotional road shows across the sultanate.

"Most people seem to have security concerns, especially when it comes to making payments online," Baqer said. "We try to explain in laymen's terms how making payments over the internet with ePG is actually safer than using a credit card for every day purchases in stores. Additionally, the recent e-legislation protects online users for all types of e-transactions, from data transfer to e-commerce," he added.

According to Al Harthy,"Oman needs more awareness and education when it comes to actual risks on the internet. There needs to be a greater comfort level with this technology."

Acknowledging the fact that not everyone can afford to use the internet on a home computer, the ITA intends to set up kiosks in major urban areas such as shopping centres, where anyone can go online and pay their bills and fees.

Undeterred by these challenges, Baqer is planning to sign up utilities companies to the ePG portal so that consumers can pay energy bills online, as well as Royal Oman Police to enable easier payment of traffic fines, airlines to facilitate purchase of e-tickets, and big retailers for the purchase of consumer goods. "We want services that will directly benefit citizens, residents and businesses," he concluded.

© Oxford Business Group 2008