Cash is still king in the GCC. But that is soon to change. The beauty of disruptive technology is it disrupts, no matter what. Either companies adapt quickly, or get swamped under.
Consider the case of mobile payments.
Sweden opened its first unmanned convenience store in March last year. Amazon is testing a grocery store in Seattle with no checkout lines. Customers check-in at the entrance of the store with a new app called Amazon Go, then grab whatever items are needed and when they are done shopping, they just walk out. Amazon claims it can track the items automatically through a combination of computer vision and deep-learning technologies.
After barter and money, plastic cards represented the third generation of payment systems. However, the world is already moving to the fourth-generation concept, viz mobile payments. It is surprising that the GCC enjoys one of the highest mobile penetration rates (about 175 subscriptions per 100 population) but is yet to embrace mobile payments, which account for a paltry 1.3 per cent of global transactions compared with about 37 per cent in Asia- Pacific.
The GCC has a poor track record of adapting to the third-generation plastic card era, with only 25 per cent of its population using them (and frankly, the reasons for the region’s adherence to cash are not entirely clear). However, here is a great opportunity to leapfrog into the fourth generation of payment systems, with some help.
Combine a tech-savvy youth demography with very high mobile penetration, and this leap to the fourth generation, mobile payment system is just waiting to happen in the GCC. In a study commissioned by Cards and Payments Middle East, 77 per cent of people polled said they needed more convenience and less hassle in their transactions. That opens up a US$3 billion market in the UAE alone by next year, according to Research Moz. But who will capitalise on this opportunity?
Banks are the usual suspects, but they run the risk of viewing this as another add-on service and may miss the trend completely. The GCC banks have so far demonstrated a lackadaisical attitude about embracing digital banking and are now under considerable pressure to innovate digital services. The dent the global financial crisis had on their balance sheets kept them busy restructuring and cleaning up, leaving little time to focus on technology investments.
Banks that beat this trend and focus on digital technology can create huge shareholder value. Some banks are offering digital wallets powered by MasterPass, which was launched by MasterCard, and lets smartphones store credit and debit card information in digital form, enabling users to make purchases with their phone instead of a card.
However, a delay on their part will enable non-bank players to swiftly move in and capture the market. The substantial success of the UAE-based Beam Wallet is a case in point. While this competition between banks and non-banks plays out, regulators will also catch up with the trend. The Central Bank of the UAE has already approved mobile wallets and it’s only a matter of time before other central banks recognise this trend and introduce norms for orderly growth.
The rapidly evolving mobile payment architecture will affect key stakeholders such as service providers (credit card companies and banks, for example), retailers, customers and regulators. Among them, customers are the most ready and will drive the change while others will catch up. Who knows, in about three years you might be able to forget your wallet at home – but not your smartphone.
M R Raghu is the managing director of Marmore Mena Intelligence, which is based in Chennai and has its parent company in Kuwait.
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The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
Mountain%20Boy
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Company%20profile
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COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Tips on buying property during a pandemic
Islay Robinson, group chief executive of mortgage broker Enness Global, offers his advice on buying property in today's market.
While many have been quick to call a market collapse, this simply isn’t what we’re seeing on the ground. Many pockets of the global property market, including London and the UAE, continue to be compelling locations to invest in real estate.
While an air of uncertainty remains, the outlook is far better than anyone could have predicted. However, it is still important to consider the wider threat posed by Covid-19 when buying bricks and mortar.
Anything with outside space, gardens and private entrances is a must and these property features will see your investment keep its value should the pandemic drag on. In contrast, flats and particularly high-rise developments are falling in popularity and investors should avoid them at all costs.
Attractive investment property can be hard to find amid strong demand and heightened buyer activity. When you do find one, be prepared to move hard and fast to secure it. If you have your finances in order, this shouldn’t be an issue.
Lenders continue to lend and rates remain at an all-time low, so utilise this. There is no point in tying up cash when you can keep this liquidity to maximise other opportunities.
Keep your head and, as always when investing, take the long-term view. External factors such as coronavirus or Brexit will present challenges in the short-term, but the long-term outlook remains strong.
Finally, keep an eye on your currency. Whenever currency fluctuations favour foreign buyers, you can bet that demand will increase, as they act to secure what is essentially a discounted property.
Andor
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Brief scores:
Toss: South Africa, chose to field
Pakistan: 177 & 294
South Africa: 431 & 43-1
Man of the Match: Faf du Plessis (South Africa)
Series: South Africa lead three-match series 2-0
COMPANY PROFILE
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
Lampedusa: Gateway to Europe
Pietro Bartolo and Lidia Tilotta
Quercus
COMPANY%20PROFILE
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Timeline
1947
Ferrari’s road-car company is formed and its first badged car, the 125 S, rolls off the assembly line
1962
250 GTO is unveiled
1969
Fiat becomes a Ferrari shareholder, acquiring 50 per cent of the company
1972
The Fiorano circuit, Ferrari’s racetrack for development and testing, opens
1976
First automatic Ferrari, the 400 Automatic, is made
1987
F40 launched
1988
Enzo Ferrari dies; Fiat expands its stake in the company to 90 per cent
2002
The Enzo model is announced
2010
Ferrari World opens in Abu Dhabi
2011
First four-wheel drive Ferrari, the FF, is unveiled
2013
LaFerrari, the first Ferrari hybrid, arrives
2014
Fiat Chrysler announces the split of Ferrari from the parent company
2015
Ferrari launches on Wall Street
2017
812 Superfast unveiled; Ferrari celebrates its 70th anniversary
Thank You for Banking with Us
Director: Laila Abbas
Starring: Yasmine Al Massri, Clara Khoury, Kamel El Basha, Ashraf Barhoum
Rating: 4/5
Kill%20
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The biog
Name: Sari Al Zubaidi
Occupation: co-founder of Cafe di Rosati
Age: 42
Marital status: single
Favourite drink: drip coffee V60
Favourite destination: Bali, Indonesia
Favourite book: 100 Years of Solitude
UAE currency: the story behind the money in your pockets
Jigra
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
Call of Duty: Black Ops 6
Developer: Treyarch, Raven Software
Publisher: Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5
COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
The specs
Engine: Direct injection 4-cylinder 1.4-litre
Power: 150hp
Torque: 250Nm
Price: From Dh139,000
On sale: Now
Tree of Hell
Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla
Director: Raed Zeno
Rating: 4/5
Dubai Rugby Sevens
November 30, December 1-2
International Vets
Christina Noble Children’s Foundation fixtures
Thursday, November 30:
10.20am, Pitch 3, v 100 World Legends Project
1.20pm, Pitch 4, v Malta Marauders
Friday, December 1:
9am, Pitch 4, v SBA Pirates
Company%20Profile
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COMPANY%20PROFILE%20
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The%20specs
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