Mobile payments have been taking the payments world by storm, and it seems that they are still expanding outwards as the demand for mobile payments in the Middle East grows as firms extend their offerings and infrastructures to keep up with the growing evolution of ecommerce and alternative payment solutions.
The UAE Central Bank has recently announced plans for implementing a Direct Debit system for it's customers, which is the perfect setup for a meaningful expansion for mobile payments.
The company who supply the technology behind many of the alternative payment platforms available in the world today, First Data, had their Regional MD for Middle East and Africa Mick Holmes offer up his thoughts on the expansion of mobile payments in the Middle East.
“There are various definitions of alternative payment solutions but in its simplest form we would define them as a payment method that is not a traditional cash or credit/debit card transaction,” said Holmes
“For example PayPal would be considered by many as an alternative payment solution, as would virtual currency Bitcoin and Google Wallet which allows consumers to utilise Near Field Communication (NFC) on their smart phone to pay for goods.”
Research from First Data shows that consumers across the Middle East favour these alternative methods of payment, with prepaid cards taking up widespread acceptance in large malls like Mall of the Emirates and Ibn Batuta Mall.
“Consumers in the Middle East clearly have a strong appetite for new ways to pay for their goods,” continues Holmes. “Research that First Data carried out late in 2011 found that consumers in the region demonstrated a greater enthusiasm for new payment technologies, such as contactless and mobile.”
Their research showed that, surprisingly, more people were likely to use a mobile device to make payments in the Middle East, compared to many other countries – including the UK, Germany and Poland.
“For merchants in the Middle East the message is clear – consumers are ready for these technologies now,” says Holmes, stating that many retailers could skip the contactless card stage altogether and move straight for the mobile market.
The mobile payments system mPay, which allows users to pay for a selection of government services through their mobile app or SMS, saw an 11 per cent increase in 2012.
“While great strides have been made over the last five years there is still a lot to realise before mobile payments truly come to fruition. Adoption will ultimately be driven in the Middle East when there is a clear value proposition for the consumer that drives uptake, beyond innovative early adopters, into the mass market,” Holmes predicts.
Do you agree with Holmes' prediction?
Will the Middle East be the driving force behind mobile payments and successful widespread mobile integration into retail and banks?
Let us know by sounding off with your thoughts below.
At this year's Cards & Payments Middle East, the advancements in payment methods in the region, as well as the future of payments as a whole, will be a hot topic of discussion – something that you certainly won't want to miss out on if you plan to stay ahead of the payments game. You can download the prospectus for free here.