Kamran R. Siddiqi

'The prospect of super growth for several years is very exciting, and I can see patterns from other parts of the world in play in the Middle East,' says this career international banker who joined Visa after three-and-a-half years with ANZ in Melbourne, mainly focused on credit cards.

'The Middle East is a market of extremes for cards,' he explains. 'In a place like Dubai the challenge is in maximizing card usage while in other areas they might have only just begun the journey of cards.

'The typical pattern is for a multinational bank to become the first issuer of cards. Then other local financial institutions decide to get in on this highly profitable business.

'At first offering a better service is a way for banks to differentiate themselves. But after a while, that is not enough and the cardholder begins to ask 'what is in it for me?' And that is where reward programs start.'

So what does the new Visa boss make of the air miles war between card issuers in the UAE right now? Most of the banks are competing to offer the best scheme to cardholders.

'Again this is typical of what we have seen around the world. Air miles are one of the most powerful benefits and have a high perceived value by card holders.

'Citibank started this phenomenon 16 years ago with its air miles card in the US for American Airlines and the whole idea has spread around the world. Linking up with an airline that has a loyal customer base makes sense. There is a feeling that you are getting somewhere in life and the cardholder feels a real benefit.'

Mr. Siddiqi notes that the UAE is several years behind the US in developing cards linked to air miles. So what comes next?

'If the US is a guide the next stage is price competition, and lower fees. The difference is that the US is such a big market that issuers can compete on pricing. It is more difficult here to carve a profitable market niche. The economies of scale do not exist.

'If fee erosion becomes a fact then it will be a challenge for many banks to maintain profitability. Another factor may be that late entrants will try to buy market share, and I am not sure if that is a sound thing for the future of the industry'.

Outside the developed card markets, Mr Siddiqi says that Visa can afford to adopt a 'wait-and-see' approach. 'There is no point in pushing the parties until they are ready,' he says, confident that the greater security and convenience of payment by plastic will win in the end.

His attitude to e-commerce is more proactive and he predicts the gradual roll-out of the Verified by Visa program which offers a secure online trading environment.

'Our experience from other markets is that once a critical mass emerges then suddenly e-commerce springs to life. It will probably be the same in this region.'