MasterCard, the world’s second-biggest payments processor, has trialed a scheme that would allow UAE shoppers to pay for goods with a swipe of their mobile phone.
The company is piloting a service that would embed phones with a chip that holds credit and debit card details. Shoppers would just swipe the sales terminal with their cell, and key in a pin.
The payments processor said 20 percent of total electronic transactions in the Middle East are currently made online and the figure is growing in triple digits.
“Our pilot was 500 phones…it was being done in the JBR area. The idea was that those residents were given a phone and they can use the whole [mobile payment service],” said Raghu Malhotra, general manager for MasterCard Middle East.
The rise of mobile payments has been hailed as a revolution for consumers amid a saturated market for credit and debit card providers.
Rival payment firm VISA this month acquired South Africa’s Fundamo in a deal valued at $110m, in a bid to develop mobile payment services in lucrative development markets.
MasterCard acquired the Ireland-based Orbiscom, a payments solutions provider, for around $100m in 2009. The firm hopes to launch Orbiscom’s inControl platform, which allows users to customise their credit and debit cards, by the end of 2011, said Malhotra.
The company said it is seeing its biggest growth in e-commerce and prepaid cards buoyed by the Middle East’s young, tech-savvy population.
“E-commerce is very big, much bigger than people think even here in the Middle East. It grows in triple digits. It is already over 20 percent of spending for commerce, and I suspect it will be true of all electronic payments,” said Malhotra.
“70 percent of the population here in the Middle East is less than 35 years old so their uptake of technology is far greater than it was five seven years back. The youth today…is really comfortable just saying I don’t need anything physical [to make payments].”
The uptake of prepaid cards, aimed at the younger generation, is growing rapidly, said Malhotra. “I can safely say there will be triple digit growth in this region, Prepaid is going to be huge.”
MasterCard in May said its first quarter revenue increased 14.8 percent to $1.5bn as consumers spent more on their credit and debit cards and bought more than just necessities.
Global purchase volume increased 12.9 percent, the highest quarterly rate since the third quarter of 2008, said MasterCard.
Follow us on
