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The Investor 15

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
shopping, they just walk out. Amazon cent of people polled said they needed
claims it can track the items automatically more convenience and less hassle in their
through a combination of computer vision transactions. That opens up a US$3 billion
and deep-learning technologies. market in the UAE alone by next year,
according to Research Moz. But who will
After barter and money, plastic cards capitalize on this opportunity?
represented the third generation of payment
systems. However, the world is already Banks are the usual suspects, but they run
moving to the fourth-generation concept, the risk of viewing this as another add-on
viz mobile payments. It is surprising that service and may miss the trend completely.
the GCC enjoys one of the highest mobile The GCC banks have so far demonstrated
penetration rates (about 175 subscriptions a lackadaisical attitude about embracing
per 100 population) but is yet to embrace digital banking and are now under
mobile payments, which account for a considerable pressure to innovate digital
paltry 1.3 per cent of global transactions services. The dent the global financial
compared with about 37 per cent in Asia- crisis had on their balance sheets kept
Pacific. them busy restructuring and cleaning up,

October 2017 Issue 1