MasterCard use doubles in Middle East as company works toward cash-less, card-less future

MasterCard recently reported that the number of users in the Middle East and Africa has doubled in the last three years to 100 million users.

The Middle East and Africa region is one of the fastest growing markets in terms of digital banking, in part because it has the most room to grow. The region is still primarily cash based, with 85 to 90 percent of all retail transactions still being made in physical currency, according to MasterCard.

If MasterCard leaders had their way, cash would be out of the picture completely.

“We are focused on developing innovative electronic payment solutions for all sectors of the market, including cardholders, merchants, banks and governments,” Eyad Al Kourdi, senior vice president and general manager of MasterCard in the United Arab Emirates, told Gulf News Journal. “Awareness of the benefits of electronic payments is crucially important for our growth, and we work closely with banks and other financial institutions to both reward and educate cardholders and merchants for choosing cashless methods of payment.”

Government initiatives have played a large role in MasterCard’s recent growth in the Middle East and Africa.

In the United Arab Emirates (UAE) for example, MasterCard has implemented an electronic salary transfer called the Wages Protection System.

In Egypt, MasterCard developed a partnership with the government allowing the company to produce digital ID cards equipped with banking information. Egyptian citizens can use their national ID cards to make payments.

“The system allows the government to issue digital ID cards, which can be used to pay for a number of services including government fees, mobile bills, merchant purchases and domestic remittances," Kourdi said. "In addition, salaries and social benefits can be electronically disbursed through the card."

MasterCard says it is also working with the Nigerian government to roll out similar national ID cards.

The company is playing to countries' national security and budget concerns by promising their technology provides a more secure and traceable financial system than cash. Cash costs countries up to 1.5 percent of their annual GDP to produce and is impossible to trace,  Kourdi said.

“Over the past few years, governments around the world have realized that greater financial empowerment has a dual benefit: it improves the livelihood of individuals and families, and it lays the foundation for economic growth that’s more inclusive and more sustainable,” Kourdi told the Gulf News Journal. “Governments are leveraging the power and reach of technology to help strengthen the social contract with their citizens in ways that make a difference in their everyday lives.”

MasterCard representatives say the company has spent 30 years investing in the Middle East region and considers it one of its key growth markets – specifically the countries of Saudi Arabia, UAE and Egypt.

Getting a MasterCard into the hand of every person, though, is not the end goal.

“As we look to the future, MasterCard is focused on driving not only toward a world beyond cash, but a world beyond plastic,” Kourdi said. “Our strategy is simple: we’re focused on providing the technology, expertise and flexibility needed to give consumers anytime, anywhere, any device access to their payment accounts – now and in the future.”

A card-less future is beginning to take shape in Egypt already. MasterCard is dealing in smartphone technology in the country, launching mobile money wallet technology that allows smartphone users to pay their bills, and for goods and services, directly from their phones.

“These wallets can be downloaded on to any smartphone or feature phone, and mean that anyone with a registered mobile phone can enjoy access to the formal financial ecosystem and can carry out transactions from their device,” Kourdi said.

Innovation is key to recruiting and retaining customers, according to MasterCard, and consumers in the Middle East and beyond should expect to see even more modernization from the company in coming years.

“Through public dialogue, public-private partnerships, and a desire to foster financial empowerment, MasterCard will continue to work with governments to support the move toward a world beyond cash, where everyday payments are safe, simple and secure for everyone,” Kourdi said.