Product innovation and new technology drive Middle East payment card usage

This represents a record 43 per cent rise over the equivalent period in 2003 (year ending 31 March) and the fastest annual growth in four years. Comparable figures for 2001, 2002 and 2003 show that retail spending was up by 21 per cent, 23 per cent and 38 per cent respectively.

Visa attributes the rapid increase in card usage to a combination of product innovation and technology enhancement among Middle East banks including introduction of prepaid cards, greater uptake of smart cards and e-commerce security solutions - all of which have played a key role in driving greater sophistication in the regional payment industry.

Kamran Siddiqi, General Manager Middle East for Visa International said, 'The upward trend in card usage stands testimony to the initiatives of our member banks and is a direct result of their innovations in product development. It also reflects the development of stronger partnerships with merchants and a greater understanding among cardholders. As more and more customers understand the value of Visa cards for every day payments greater card usage is helping to drive efficiency not only at the level of personal finance but also at the level of economic growth.'

As the first Saudi issuer of Visa smart cards, Shehryar Ali Shah, Acting Cards Head, of Saudi Hollandi Bank said, 'Technology forms the backbone of the card industry. Middle East markets are rapidly developing and quick to embrace the latest in technologies, making it increasingly important for us to deliver sophisticated products to suit modern payment needs. New technologies such as chip cards boost the security of electronic payments, leading to greater consumer confidence and increased sales.'

Acceptance of Chip cards - plastic cards embedded with a microprocessor that can store up to 80 times more information than a traditional magnetic stripe card - continues to grow across the region. The number of Chip acceptance devices had increased steadily over the past 12 months with smart card issuance also up.

In the field of e-commerce, new technologies such as the recent introduction of Visa's e-security solution, Verified by Visa (VbyV), in the UAE, Qatar, Saudi Arabia and Lebanon, are further fostering growth in card usage.

Antoine Raad, Deputy General Manager of Credit Libanais that led the way with VbyV in Lebanon said: 'As the trend of online purchases continues to grow, boosting e-commerce security becomes increasingly important. Stemming from a need for a secure and functional online payment environment, VbyV enhances merchant and consumer confidence, thereby boosting e-payments through plastic.'

Growing retail card use bodes well not just for banks and merchants. Research has shown that electronic payment platforms and the growth of automation in the payments industry directly correlates to economic growth. By moving away from cash to automated electronic payments, bank deposits are deepened, thereby increasing funds available for commercial loans in the region - a driver of overall economic activity. The process also allows for greater transparency and accountability leading to stronger efficiencies and better economic performance.