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Payroll cards expected to post strong growth in Middle East during 2017-2021

Payroll cards expected to post strong growth in Middle East during 2017-2021

Payroll cards expected to post strong growth in Middle East during 2017-2021

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Financial inclusion is one of the key concern areas in Middle Eastern region owing to its large unbanked population. Egypt ranks first as it has largest unbanked population in the world. However, in recent years there is positive approach towards adoption of electronic payments and prepaid cards gradually in this region. UAE already has high adoption of prepaid payroll cards. The country's payroll prepaid card market in terms of transaction value is expected to record a CAGR of 24.4% during 2017-2021 to reach US$ 1,385.9 million by 2021, increasing from US$ 578.0 million in 2017. Over the last five years the sector has recorded a CAGR of 33.2%, increasing from US$ 142.8 million in 2012 to reach US$ 449.3 million in 2016. Currently, one of the key highlights in this segment is increased adoption of payroll cards. There have been certain developments in past couple years which shows slow adoption of payroll cards among working population.

  • Recently, Qatar based largest commercial bank, Doha Bank signed an agreement with global payment technology and service provider MasterCard for enhancing services extended to payroll customers and employees. This partnership is in line with supporting the implementation of Wages Protection System (WPS) framework. Under this partnership new service offerings are expected to be introduced that will be aimed at majorly workforce population with importance given to remittance service and contactless payment solutions.
  • Last year, Visa introduced payroll card education programme in Egypt aimed at knowledge sharing towards payroll card usage for government employees. This had been considered a major step towards activation of financial inclusion in the country. The service provider also plans to expand its payroll card services by collaborating with local institutions.
  • Cross border payment service provider, UnionPay International had partnered with electronic payment and payroll card service provider, Mint last year, for issuing EMV chip based UnionPay Salary Cards in the GCC region. The service was aimed at providing electronic payment facility and other value added services to more than 500,000 workers. This service was intended at improving financial and digital inclusion of workers who can not avail banking services fully. Mint currently has a card holder base of 400,000 with a processing volume of 400 million Dirhams per month. On the other hand, UnionPay has the largest portfolio of issuing cards across 150 countries and regions along with strong partnerships with major financial institutions. With this partnership, Mint will gain access to global exposure through UnionPay and stable business expansion in the country for a steady foothold in the market. UnionPay gains access to Middle Eastern market which has untapped potential in terms of payroll and prepaid cards usage and mobile payments.

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

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