Appeared on Business Intelligence Middle East, July 1, 2010
Thursday, July 01, 2010
Following a recent visit to the Middle East, ACI's president and CEO expressed his views regarding the state of the payments business in this important region and how the recent global economic downturn has affected the view of the Middle East as a strategic market.
While the global economic downturn has impacted almost every corner of the planet, the growth in the Middle East payments market has predominantly continued at rapid pace.
New technology and business initiatives are still being sought by the major banks in the region, who continue to adopt cutting edge solutions in an attempt to drive consumers away from the traditional use of cash.
This has been seen through the widespread interest and adoption of prepaid cards, and a real drive by banks to acquire a significant proportion of the un-banked population. For example, new legislation in the Kingdom of Saudi Arabia is driving organisations to look at the strength of their wholesale payment solutions. In future any organisation with more than 100 employees will be forced to make salary payments through ACH.
The consequences of this initiative are far reaching and impact transaction volumes in a variety of banking systems. This not only drives further growth in the wholesale/corporate payment volumes, but has a knock-on effect in retail, as employees of larger SMEs will now have to withdraw cash from ATMs, or use debit products for purchases at POS. Either way this will drive the use of electronic payments and provide significant growth.
One negative impact of the global economic downturn has been the increase in card and account fraud in the region. There are many reasons to account for this, and to an extent some of the growth could be attributed to the globalisation of fraud as a business in its own right. What is not in question however is the fact that fraud is on the increase and is now a massive cause for concern.
As such, the financial institutions in the region are busy adopting anti fraud measures such as full roll out of EMV chip cards. Additionally banks are seeking to compliment fraud prevention solutions such as EMV with sophisticated fraud monitoring and alerting tools which minimise the impact of this growing problem in the region.
Recent activities and initiatives by many organisations in this region, cement ACI's decision to continue to build our presence in the Middle East. What I heard and saw in my recent visit simply confirms our firm belief in this market which has huge potential for continued growth for ACI's retail and corporate payments solutions.
Source: ACI Worldwide, Author: Philip Heasley