Electronic payments fuel retail sector

The UAE is predicted to have the highest growth rate for electronic payments in the Middle East in 2006.

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By  Roger Field Published  June 1, 2006

With Dubai now viewed as a top shopping destination, the UAE is fuelling a shift towards electronic payments, according to a study from ACI Worldwide, a company specialising in electronic payments. By 2009, the Middle East is forecast to see electronic payments rise within the region by an annual growth rate of almost 18%, the third highest rate in the world. The market forecast, which was commissioned by ACI Worldwide and conducted with Global Insight, Inc., a financial and economic forecaster, showed that only Eastern Europe and Asia Pacific will experience faster growth of electronic payments. The UAE, which already has a growth rate for electronic payments of 24.1% emerged as the Middle Eastern country predicted to have the highest growth. This rate is set to continue to 2009, increasing the number of its electronic payments by more than 21%. With its population and mature market, Saudi Arabia is also developing strongly, and is set to see an increase of 17.4% to 897 million payments. The study also revealed which countries are forecast to dominate the Middle East’s wholesale payments market. For example, of the 20.85 million large value transactions, 10.7 million will take place in the UAE and 2.7 million in Kuwait, and 320,000 in KSA.The Middle East will also match the global trend of a 3.09% fall in use of cheques. Kuwait was the highest user of cheques in 2004, accounting for 104 million of the 151 million recorded in the Middle Eastern countries studied. Kuwait is also predicted to exhibit the fastest decline, with a 5.7% drop in the use of cheques expected by 2009. James Lotz, Middle East regional manager at ACI, said: “These figures clearly indicate that the Middle East will continue to see significant volume increases in electronic transactions. For both banks and their processing organisations, these numbers represent a serious business opportunity and ACI can ensure banks take full advantage of this.” The global study examined electronic payment types ranging from ATM transactions to credit and debit card payments, direct debit, electronic bill payments, large-value money transfers and bulk file (ACH) transactions.

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