Visa card transactions in the UAE grow at slower rate

The UAE’s digital spread has encouraged the use of electronic commerce. Antonie Robertson / The National

Visa, the card payment company, on Monday said that transactions in the UAE grew at a much slower rate last year.

The company recorded a 10 per cent growth rate last year, which was half the 20 per cent increase in 2015.

The card payment company said that its tie-up with the Dubai Shopping Festival (DSF) has led to a 5 per cent jump in card transactions among visitors from the UK, Russia, India, Oman and Qatar. However, it added that visitor spending was 8 per cent higher during last year’s festival.

“Visa still saw growth in 2016 but it slowed noticeably compared to 2015,” said Karim Beg, head of marketing Mena for Visa.

He said Visa’s key competitor is cash and the company’s strategy is to switch customers to electronic commerce.

“While many parts of the Middle East are a long way behind mature markets with regard to electronic payment, the UAE is almost at the same level. The international demographic and the youth of the population, with many millennials, means there is an embrace and trust in card payments.”

The UAE’s digital spread has encouraged the use of electronic commerce.

Dubai’s taxis can now take card payments and the exponential growth of Careem and Uber has been fuelled by the use of electronic payment, making the need for cash redundant.

The retailer and mall operator Majid Al Futtaim has introduced Beam Wallet, a cashless payment vehicle.

Visa experienced an 11 per cent growth in sales transactions over online channels last year as UAE residents increasingly look to e-commerce and online channels for retail. While cash on delivery is still the main payment method, an increasing number of customers trust in the electronic option.

“While 20 per cent of our sales are through credit cards, we see this number grow double during our big campaigns such as White Friday and DSF as we partner with Visa or MasterCard which offer an additional 10-15 per cent discount,” said Mahendra Asar, general manager at Souq.com​.

“These partnerships incentivise more customers to pay online. In the long term, we see that online payments will grow significantly as the tech-savvy consumers in the region are becoming increasingly comfortable with online payments.”

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