Tuesday, Apr 16, 2013
Dubai:
The UAE’s prepaid industry is banking on the unbanked, as well as the low-income expatriate population to propel the revenues for pre-loaded payment cards in the country.
The growing spending power of the youth, which are among the biggest users of prepaid products, and the big remittance market are also major growth drivers.
Industry figures already point to a bullish trend for the sector. Estimates show that from 2013 to 2017, the circulation of prepaid cards will increase at a compound annual growth rate (CAGR) of 11 per cent globally, while the Middle East and North African (Mena) markets will grow faster at 18 per cent.
The Middle East region, in particular, emerged as the second fastest growing market posting a 28 per cent CAGR between 2010 and 2012. In the UAE, prepaid revenues are expected to top $18.4 billion by 2015.
Francesco Burelli, partner at Value Partners, said the remittance, youth and unbanked segments provide very significant opportunities” for providers.
“Technology, convenience and the ability to meet the needs of segments that cannot be addressed with a traditional historical banking proposition will fuel the prepaid growth in this region,” Burelli told Gulf News.
“There are a number of important factors driving this growth [and this includes] increasing spending power among the youth. The GCC, and Saudi Arabia in particular, has a huge opportunity to develop prepaid, for instance, with the expatriate communities. In the UAE, expatriate workers comprise some 85 per cent of the labour force and 40 per cent in Saudi Arabia.”
“A big chunk of the expatriate population is in the low-income bracket, making them unsuitable for credit cards but right for prepaid cards, specifically in remittance and wages. Foreign travel and online [shopping] can [also] benefit from prepaid solutions,” he added.
Burelli is one of the speakers in today’s Prepaid Summit Middle East 2013 in Dubai. The conference will tackle how the prepaid products and consumer behaviour have evolved. It will also address how technology is transforming the industry.
Expert speakers are scheduled to present research findings relevant to the industry, including success stories and lessons to learn from other markets.
By Cleofe Maceda Senior Reporter
Gulf News 2013. All rights reserved.
