Interview: Abdulla Qassem

To what extent can the National Innovation Strategy (NIS) and Dubai Smart City initiatives stimulate e-payment expenditure and awareness?

ABDULLA QASSEM: With the launch of the NIS during the “Year of Innovation” in 2015, many governmental initiatives, such as Dubai Smart City and the Dubai Now mobile application, have helped to successfully meet the challenges of an ever-changing marketplace and have helped shape the region’s payment services industry. For instance, in line with the Dubai Smart Government strategy, point-of-sale machines will soon be in use in all Roads and Transport Authority taxis in Dubai.

By the end of 2016, we expect 20-30% of taxi users to pay their fare by debit or credit card, which is an impressive achievement seeing as Dubai remains a relatively cash-based economy. To keep pace with the evolution of plastic money and e-payment developments, Dubai must invest in research and innovation.

However, as far as payments solutions providers are concerned, innovation needs to be combined with necessity. It should not only address the pain points of payments at various levels, but it should also bring into the payments universe large chunks of demographies not currently included. For innovation to be inclusive and for invention to be applicable, it has to be relevant to the needs of the various stakeholders.

What measures can be introduced to reduce added costs in non-cash banking transactions?

QASSEM: Reducing added costs for plastic money transactions can only be achieved if some banks agree to adopt a new scheme all together in order to share the cost of that technology among the industry players. This synergy will not only encourage customers to conduct more electronic payment transactions as they are cheaper and faster, but will also become a valuable asset for all corporate banking procedures.

Another important sector to benefit from the increase in electronic transactions will be the government. There is a maximum fee, for such transactions, and this will encourage people to use electronic payments more often and will make corporate procedures more efficient. Some of the benefits of this shift include better control and monitoring of transactions, enhanced efficiency, as well as faster and safer operations to name but a few.

What challenges and opportunities are presented by micropayment and e-commerce services?

QASSEM: Today’s rapidly changing payments landscape is being driven by digitally empowered consumers, whose expectations have been transformed by the smartphone and the services it supplies. This means that more than ever before, consumers expect payments to be fast, convenient and hassle-free.

Although most micropayment services will still be handled with cash, the use of pre-paid cards will pick up very quickly in 2016. Banks need to align their strategy to create certain incentives for prepaid payment and online transactions. They are saving on costs with the growing use of plastic money, so it needs to become a genuinely cheaper option for customers, too. Now that more people are using alternative payment solutions, it shouldn’t mean that banks provide fewer incentives to use them or stop promoting them. Smaller internet-based transactions are also becoming more important. Online ticketing for the major airlines with a presence in Dubai is probably the strongest example, as it has shown impressive growth over the past few years. Companies need to develop innovative products in that growing niche.

The Middle East, the last region to adopt dynamic currency conversion, has already become the largest market using it worldwide. This success, in addition to the development of Emirates Airlines and Dubai’s aviation hub, is largely thanks to Dubai having adopted the latest technology without going through all the steps that many of its competitors had to undertake.