Identity and mobile figure large at payments and cards event
Some 5,000 delegates registered for the event and its associated identity and mobile shows
The themes of security, identity and mobility ran strongly through the Cards and Payments Middle East conference in Dubai this week – and not just because the event itself is sandwiched between related and interlinked events focusing on Mobile and Identity.
The UAE government is supporting the expansion of mobile services through an identification authority that will provide secure authentication of individuals using such services.
Dr Ali Mohamed Al-Khouri, director general, Emirates Identity Authority, told the that the government has tens of strategic initiatives around what he called an identity management infrastructure to enable identification and authentication of individuals with multi-factor authentication including biometrics, digital certificates, one-time passwords and digital signatures.
“These will provide a new level of customer experience,” he said. With secure identity authentication, individuals in the UAE will access government and private sector services. Through its integration platform, more than 15 government organisations will connect with the identity management infrastructure to improve the efficiency and effectiveness of the public sector.
“The UAE will support a digital economy to make us among the best countries in the world,” he added.
Just in time too, said Brett King, a banking consultant, author and founder of the Moven mobile banking service front-end. He told the conference that the Gulf States had 227% mobile penetration – residents carry more than one mobile device.
The growing use of mobile, especially among Gen Y, will require bankers to rethink their business model, he said. “Gen Y will turn to mobile banking first; you don’t have five or 10 years to get it right,” he added. “This is happening right now. It is the fastest growing segment in retail banking and payments today.”
By 2016 the average retail banking customer will have 300 digital interactions for each one in the branch, he added. “The branch is not going to save you. You have to have a digital relationship with your customers.”
The debit card is the most used transaction tool today, but it is dumb, or the bank services behind it are dumb, said King. “How about a service that can give your balance before and after the transaction, delivered to your mobile phone,” he asked. Moven can provide running monthly totals of payments, on a mobile. He gives the example of being surprised to learn he had spent $687 on taxis in New York in one month; if asked, he would have estimated the amount at $200 or so.
“This is where we can have control over our savings and spending,” he added. “Banks have made a lot of money on our ignorance, how much you are putting against your balance with each credit card payment? They don’t want you to know. Utility is key but context makes utility something special.”
Another speaker, Ed McLaughlin, chief emerging payments officer for MasterCard, echoed this, saying that young people like his daughter don’t think of text messages as technology; it’s just the way they communicate.
“The concept of a stamp is completely baffling to her. Consumers are moving from off-line to intelligent connected devices and that is changing how we learn, how we get information, how we entertain ourselves and most importantly how we connect to family, friends, governments and community.”
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Consumers will use a variety of devices – PCs for content creation, cards and devices like PayPass for shopping, internet-connected refrigerators and thermostats, plus tablets and smart TVs for entertainment, he said.
“It’s not about the specific device, rather it is about how we can use these new capabilities to provide consumers with richer, more secure more convenient shopping experiences and bring the benefits of financial inclusion to billions of consumers we could not reach before,” he said. “Consumers want all of this connected, and connecting is at the heart of what MasterCard does.”
It is also important to be flexible in product design. In the UAE, MasterCard has worked with Al Hilal Bank Qibia in Dubai to develop a Sharia-compliant card.
The account has many unique benefits, said McLaughlin. It does not allow transactions that are not compliant and a small percentage of each transaction goes to alms giving. Users can round up local retail transactions and credit it to Red Crescent or other charities and the card provides travel benefits during haj, where a majority of the spending is still in cash: the card includes a digital compass, which will show the direction of Mecca with the press of the button.
In Egypt, where 65% of the population is unbanked, MasterCard is working with the central bank to reduce reliance on cash and promoting safer electronic payments, he added. Now MasterCard provides a payroll card for state employees and prepaid cards for individuals receiving benefits like pensions. This provides greater transparency and peace of mind because it ensures that payments are on time. It is the largest public sector payroll program in the Middle East.
“During the political unrest, the only public sector employees to receive their payments on time were those in the program,” he said.
