Visa saw a 182 percent growth in the prepaid card sector in the Middle East last year, with consumers in the UAE saying they are keen to move away from credit cards and cash.
Research by TNS Global has revealed that just six percent of UAE consumers are currently using prepaid cards.
But Satish Dave, senior director, Financial Services revealed that almost 50 percent of consumers are ready to shift to a prepaid product immediately.
A prepaid card is pre-loaded with the owner's money and purchases can be made according to how much is on the card so differs from a credit card as it doesn't entail the user going into debt.
Dave added that unbanked but affluent populations like the UAE would be the main driver of general prepaid products, adding that the youth segment would emerge as the fastest growing.
"The UAE alone has a youth population of around 450,000 and our research revealed that one third of them see prepaid as a useful tool for their daily life.
"In addition the prepaid potential is cutting across markets, with both unbanked teens and women across multi income levels showing an interest in prepaid," he said.
He added that Saudi Arabia has a youth market of more than six million, with more than half having no access to a card or even to a bank.
It is estimated that the prepaid card sector in the Middle East, central Asia and Africa will be worth more than $250bn in 2012, according to a host of experts at the second regional Prepaid Summit in Dubai.
Visa said the Middle East represented one of Visa's fastest growing prepaid markets, driven by the globalisation of the work force, increasing spending power among youth and a general shift from paper to electronic payments.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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