Interview: Abdulla Qassem
To what extent can e-payment spur the growth of small and medium-sized enterprises (SMEs)?
ABDULLA QASSEM: A strong SME sector is the backbone of any modern economy, which is why the federal government is working to boost its share of economic output from 60% to 70% by 2021. E-payment systems can play a key role in catalysing such a transformation by streamlining the payment process for SMEs and reducing their operating costs, allowing them to allocate more resources to activities that drive top-line growth. We are already beginning to see increased adoption of these types of technologies among SMEs, especially as many are inherited by the second and third generations of families who often find it necessary to modernise and professionalise how the businesses are run.
There is still a long way to go, however. The UAE – like many of its counterparts in the region – is still very much a cash-based society, and SMEs, in particular, are not used to utilising e-payment solutions. This creates significant opportunities in the payments market. Credit card and banking penetration rates are also still relatively low on an individual level, especially among the country’s large expatriate working-class population. It is essential, then, that private and public entities work together to promote greater financial literacy and inclusion across society and the business community as a whole – something that the government is addressing in conjunction with its current development goals.
How will blockchain technologies open up opportunities for businesses and consumers in Dubai?
QASSEM: Blockchain is a widely discussed subject at the moment, and its implications on the wider economy are still unknown due to how new the technology is. That said, there does seem to be a few immediate applications that look promising. For one, it has the potential to greatly simplify trade financing by making transactions in different currencies more efficient. The technology can also create a more unified system for the parties involved who, in the past, may have been constrained by the differences in accounting and other financial processing procedures utilised in their respective countries. Trade licence records, for example, can be validated quickly and efficiently without all of the steps that were needed previously, which should spur trade and business in general.
There may also be applications for the remittances industry, which of course is a very important one in the UAE and broader region. Anything that makes it easier for expatriates to send money to their home countries will have a positive impact on the economy. Again, it is just the beginning. The innovative idea behind blockchain is that it can serve as a platform for sharing data easily and efficiently among counter-parties, whether they are small merchants, banks or other players. As a company that deals with millions of transactions in realtime, Network International is watching with interest the development of potential blockchain applications specific to the financial services sector.
How are new payment solutions being promoted?
QASSEM: The Smart Government initiative has done a lot to increase awareness of the benefits of ICT services. One of the reasons that e-payment processing took off in Dubai, and the UAE in general, is because it serves as a hub for the airline industry. As that industry continues to expand and change rapidly, demand will be created for new and innovative e-payment solutions.
Dubai has also done a good job of developing into a centre for retail, tourism, banking and logistics – all of which are sectors that need these kinds of services. The retail industry, in particular, is rapidly evolving, and as more and more people begin to utilise e-commerce services as a means to purchase goods, there will be demand for new services in the payments space. E-commerce has yet to catch on in the UAE as it has in other parts of the world, but the change is starting and will only become more pronounced going forward.
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