Visa, which processes credit card payments in more than 200 countries, registered 14 percent growth in payment processing worldwide last year, but in the Gulf volumes jumped 19.5 percent compared with 2009, said Elizabeth Buse, Visa’s Group President for Asia Pacific, Central Europe, Middle East and Africa.
“The Gulf is a huge opportunity for us. The fundamentals are so strong, starting with demographics, the young population and the fact that this population is growing,” said Buse.
“They are technology-adaptors, much of the consumer purchases are still made in cash ... These things represent a long-term opportunity for us.”
The San Francisco-based company faces tighter regulations in the US, where debit card fees have come under scrutiny, but investors have been heartened by strong growth in payment volumes.
“We have seen tremendous growth in our debit products and increasingly prepaid products work very well here in the Gulf, both for the guest workers and for the residents.”
When asked whether unrest across the region this year had affected growth Buse said: “It’s too early to tell. While certainly the specific countries in which there has been unrest have been affected, such as Egypt and Tunisia, in some cases it has just been a shift (in spending patterns).”
Growth in the UAE is expected to accelerate to 3.4 percent this year as it puts the global financial crisis behind it.
The financial crisis exposed excessive borrowing in the UAE, where residents alike took advantage of easy credit to enjoy lavish lifestyles.
Local banks were also hit by debt troubles in Dubai. The emirate relied heavily on debt-fueled state companies to drive growth in real estate but when the property boom ended, Dubai was left hanging.
Sentiment has improved since state-owned Dubai World sealed a deal in September to restructure $25 billion in debt, although uncertainty remains given the huge maturities the emirate’s companies face in the next few years.
Consumers have had to cope with two consecutive years of tighter lending standards, but local banks have become more willing to extend credit.
Dubai First, a consumer finance company offering credit cards issued by Visa Inc and MasterCard Inc, said in February appetite for bank lending to consumers was returning.
Spending with internationally-issued Visa cards during the Dubai Shopping Festival this year was $406 million, compared to $297 million the same period last year, Visa said.
To further support growth, Visa aims to get more people in the region, where cash payments remain common, to use electronic forms of payment, Buse said.
“We are very focused on financial literacy, financial inclusion, and making sure that we have a range of payment products available to our financial institutions,” she said.
