Millennial driving adoption of prepaid cards and mobile wallet across Middle East

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According to PayNXT360’s Middle East Consumer Survey, millennials are driving the growth of mobile payments and e-commerce segment in the Middle East region. Higher spending tendency of consumers in age group of 18 to 24 years has resulted 35% rise in m-commerce spending in GCC. Around 80% UAE and 52% Saudi millennials perform online purchases and half of them make online bill payments. Technology is a part of millennial lifestyle and they contribute significantly towards adoption of alternative payment options such as prepaid cards and mobile wallets. In Saudi Arabia, 48% consumers in this age group make prepaid card payments for electronics, 53% for leisure travelling and 59% for business travels. In UAE 60% consumers are aware of digital wallets and extensive smartphone usage is propelling its increased adoption.

Digital banking is preferred by more than half of millennial in Saudi Arabia and UAE and close to 80% of them pay electricity and water bills online. Growth in m-commerce is increasing the confidence of millennials towards digital payments. Economic recovery in UAE has been steady in past two years which is driving the growth of prepaid card industry. According to PayNXT360’s recently published reports on Middle East, prepaid cards and mobile payment transaction values are expected to record a CAGR of 15% and 27% on an average during 2016-2020.

In terms of mobile wallet, bank supported Trriple payment platform is quite popular which facilitates payments at merchant POS and online purchases in UAE. The wallet top up can be performed through multiple channels. There has been a recent tie up between Beam Wallet and MasterCard to launch in-store reward based payment platform at3,000 stores. Digital payment platform MasterPass by MasterCard is already doing business in this segment.

However, amidst this development, there is a satisfaction gap between usage of prepaid cards and mobile wallets and benefits earned. Consumers showed dissatisfaction towards travel miles and cashback options in UAE, while in Saudi Arabia there is a demand for travel miles in addition to voucher options. It is evident that prepaid cards and mobile wallets are being preferred by younger generation in Middle East and introduction of effective loyalty programs and consumer awareness can further enhance adoption of such payment systems.

To know more and gain deeper understanding of prepaid card industry in Middle East, click here