Payments by cards at all-time high

For the 12-month period ending 31 March 2005, an average of 730,000 purchases were made per day on Visa debit and credit cards in the GCC - that is over eight transactions every second - and represents a growth of 30 per cent from the same period in 2004. Visa believes this consistent trend will help boost economic growth in the region, since automated payments are more cost efficient for economies than cash handling.

Shopping spend during the year ending March 2005 passed the US$10.5 billion mark, growing from the previous year by 32 per cent. More than one-third of this expenditure was generated by Saudi cardholders, who continue to be the region's largest users of non-cash payments.

"While the rise in volume and value of card payments is gratifying, what is perhaps more significant is that the majority of purchases being made by Visa cardholders in the GCC are everyday, small value purchases. This shows that cards really are starting to challenge cash in our society as the preferred way to pay," said Kamran Siddiqi, General Manager for Middle East, Visa International. "Consumers are increasingly opting for the ease, security and flexibility of payment cards over to cash. These are the signs of a maturing market that will also support overall economic growth."

Siddiqi added that markets such as the UAE are already showing clear signs of cards replacing cash. Numbers of purchase transactions by UAE cardholders were higher than the number of ATM cash withdrawals.

"Innovation and new technologies play a key role in make a cashless economy a reality. Our member banks have focussed on bringing exciting products and technologies to the Middle East such as mini cards, money transfer solutions, multifunction chip cards, and loyalty offers, to meet the growing demand for simple, smart and secure payment alternatives."

In particular, Siddiqi was positive about the increased migration towards chip technology, which is expected to redefine card security and consumer loyalty. More member banks are expected to move to chip this year, in advance of the EMV (Europay MasterCard Visa) mandate set for early 2006.