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Emerging Opportunities in

the United Arab Emirates’

Cards and Payments

Industry

Market Size, Trends and Drivers,

Strategies, Products and Competitive

Landscape

Product Code: VR0897MR

Published Date: March 2013

TABLE OF CONTENTS

Emerging Opportunities in United Arab Emirates’ Cards and Payments Industry

© Timetric. This product is licensed and is not to be photocopied Published: February 2013

TABLE OF CONTENTS

1 Executive Summary .............................................................................................................................. 8 2 Market Attractiveness and Future Prospects of Cards and Payments Industry .......................... 10 3 Analysis of the UAE Cards and Payments Industry Drivers ........................................................... 12

3.1 Infrastructure Drivers ............................................................................................................................. 13

3.1.1 Migration to EMV cards ......................................................................................................................... 13

3.1.2 Adaption of smart cards ......................................................................................................................... 13

3.1.3 ICT based mobile payments for government services .......................................................................... 13

3.1.4 Emergence of NFC and contactless technology ................................................................................... 13

3.1.5 Dubai Metro launches prepaid card....................................................................................................... 14

3.1.6 Innovative iVestor prepaid card ............................................................................................................. 14

3.1.7 Growing Number of POS ....................................................................................................................... 15

3.1.8 Growing number of ATMs ...................................................................................................................... 16

3.2 Business Drivers .................................................................................................................................... 17

3.2.1 Growing retail industry ........................................................................................................................... 17

3.2.2 Growth in e-commerce .......................................................................................................................... 18

3.2.3 Growth in mobile commerce .................................................................................................................. 19

3.2.4 Outbound business and leisure travel and tourism ............................................................................... 20

3.3 Other Growth Drivers ............................................................................................................................. 21

3.3.1 Consumer confidence index .................................................................................................................. 21

3.3.2 GDP growth ........................................................................................................................................... 22

3.3.3 Inflation rate ........................................................................................................................................... 23

3.4 Card Fraud Statistics ............................................................................................................................. 24

3.5 Regulatory Framework .......................................................................................................................... 25

3.5.1 UAE mandates the migration to EMV ’Chip and PIN’............................................................................ 25

3.5.2 Provisions for use of credit cards .......................................................................................................... 25

3.5.3 UAE mandates the use of IBANs .......................................................................................................... 25

4 Emerging Consumer Attitudes and Trends ...................................................................................... 26

4.1 Market Segmentation and Targeting ..................................................................................................... 26

4.2 Retail Segment ...................................................................................................................................... 27

4.2.1 Targeting high net worth individuals (HNWIs) ....................................................................................... 27

4.2.2 Cards targeted at niche segments ......................................................................................................... 28

4.2.3 Cards targeted at outbound leisure tourists .......................................................................................... 28

4.3 Corporate Segment ............................................................................................................................... 29

4.3.1 Businesses and departments ................................................................................................................ 29

4.3.2 Cards offered for outbound business travelers ..................................................................................... 30

4.4 Consumer Preference ........................................................................................................................... 31

4.4.1 Price ....................................................................................................................................................... 32

4.4.2 Services ................................................................................................................................................. 32

4.4.3 Convenience .......................................................................................................................................... 32

4.5 Online Buying Behaviour ....................................................................................................................... 33

4.6 Preferred Payment Methods .................................................................................................................. 35

5 Competitive Landscape and Industry Dynamics ............................................................................. 36

TABLE OF CONTENTS



5.1 Market Share Analysis by Payment Channels ...................................................................................... 36

5.1.1 Overview of payment channels ............................................................................................................. 36

5.1.2 Cards payments..................................................................................................................................... 37

5.1.3 Check payments .................................................................................................................................... 38

5.2 Debit Cards ............................................................................................................................................ 39

5.2.1 By bank .................................................................................................................................................. 39

5.2.2 By scheme ............................................................................................................................................. 40

5.3 Credit Cards ........................................................................................................................................... 41

5.3.1 By bank .................................................................................................................................................. 41

5.3.2 By scheme ............................................................................................................................................. 42

5.4 Charge Cards ........................................................................................................................................ 43

6 Strategies Adopted by Key Players ................................................................................................... 44

6.1 Market Entry Strategies ......................................................................................................................... 44

6.2 Marketing and Product Strategy ............................................................................................................ 46

6.2.1 Credit cards ........................................................................................................................................... 46

6.2.2 Debit cards ............................................................................................................................................. 50

6.2.3 Charge cards ......................................................................................................................................... 51

6.3 Pricing Strategies................................................................................................................................... 52

7 Market Size and Growth Potential of Payment Card Industry ........................................................ 53

7.1 Market Share Analysis by Type of Card ................................................................................................ 53

7.2 Total Market Size and Forecast of Card Industry .................................................................................. 55

7.2.1 Analysis by number of cards ................................................................................................................. 55

7.2.2 Analysis by transaction value ................................................................................................................ 56

7.2.3 Analysis by transaction volume ............................................................................................................. 57

7.3 Debit Card Category Size and Forecast ................................................................................................ 58




7.3.4 Other key performance indicators ......................................................................................................... 61

7.4 Prepaid Card Category Size and Forecast ............................................................................................ 63


7.4.2 Analysis by segments – open and closed-loop cards ........................................................................... 65


7.5 Charge Card Market Size and Forecast ................................................................................................ 68




7.5.4 Frequency of use ................................................................................................................................... 71

7.6 Credit Card Category Size and Forecast .............................................................................................. 72




7.6.4 Other key performance indicators ......................................................................................................... 75

TABLE OF CONTENTS



8 Company Profiles, Product, and Marketing Strategies ................................................................... 77

8.1 Abu Dhabi Commercial Bank ................................................................................................................ 77

8.1.1 Strategies ............................................................................................................................................... 77

8.1.2 Abu Dhabi Commercial Bank key financial ........................................................................................... 80

8.2 Dubai Islamic Bank ................................................................................................................................ 81

8.2.1 Strategies ............................................................................................................................................... 81

8.2.2 Dubai Islamic Bank key financial ........................................................................................................... 83

8.3 Emirates National Bank of Dubai........................................................................................................... 84

8.3.1 Strategies ............................................................................................................................................... 84

9 Appendix .............................................................................................................................................. 86

9.1 Methodology .......................................................................................................................................... 86

9.2 Contact Us ............................................................................................................................................. 87

9.3 About Timetric ........................................................................................................................................ 87

9.3.1 Timetric’s approach ............................................................................................................................... 87

9.4 Services ................................................................................................................................................. 88

9.5 Disclaimer .............................................................................................................................................. 89

LIST OF FIGURES



LIST OF FIGURES

Figure 1: Current and Future Prospects of Various Cards in the UAE ....................................................................................................... 10 Figure 2: Growth Potential of the UAE Cards and Payments Industry by Area of Use ................................................................................ 11 Figure 3: The UAE Cards and Payments Industry Drivers ......................................................................................................................... 12 Figure 4: Number of POS Terminals in the UAE (Thousands), 2008−2017 ................................................................................................ 15 Figure 5: Number of ATMs in the UAE (Thousands), 2008-2017 ............................................................................................................... 16 Figure 6: UAE Retail Sales Composition (US$ Billion), 2008−2012 ............................................................................................................ 17 Figure 7: Growth in E-Commerce in the UAE (US$ Million), 2011 .............................................................................................................. 18 Figure 8: Proportion of Mobile Purchases Made through Smartphones in the UAE (%), 2012 .................................................................... 19 Figure 9: Outbound Expenditure on Travel and Tourism (AED Billion), 2008−2012 ................................................................................... 20 Figure 10: Consumer Confidence Index of GCC Countries, 2012 .............................................................................................................. 21 Figure 11: GDP Growth Rate (%), 2008−2017 ........................................................................................................................................... 22 Figure 12: The UAE Inflation Rate (%), 2008−2017 ................................................................................................................................... 23 Figure 13: The UAE Card Fraud Statistics (AED Million), 2008–2012 ........................................................................................................ 24 Figure 14: The UAE Cards and Payments Industry Segmentation by Card Type ....................................................................................... 26 Figure 15: Cards for Premium Customers in the UAE ................................................................................................................................ 27 Figure 16: Cards Offered for Travel and Tourism in the UAE ..................................................................................................................... 28 Figure 17: Corporate Cards Offered in the UAE ......................................................................................................................................... 29 Figure 18: Travel Cards Offered in the UAE............................................................................................................................................... 30 Figure 19: Consumer Preferences on Various Types of Cards .................................................................................................................. 31 Figure 20: Consumer Preference for Online Shopping (%), 2012 ............................................................................................................... 31 Figure 21: Most Common Services and Flexibility Offered on Cards by Abu Dhabi Commercial Bank ....................................................... 32 Figure 22: Composition of Total Amount Spent on Online Shopping (%), 2012 .......................................................................................... 33 Figure 23: Sales Statistics by Product in the UAE (%), January 2013 ........................................................................................................ 34 Figure 24: Share of Different Online Payment Options in the UAE (%) ...................................................................................................... 35 Figure 25: The UAE Cards Payments (AED Million), 2008–2012 ............................................................................................................... 37 Figure 26: The UAE Check Payments (AED Million), 2008–2012 .............................................................................................................. 38 Figure 27: The UAE Debit Cards by Issuing Banks (%), 2011 .................................................................................................................... 39 Figure 28: The UAE Debit Card Category Share by Scheme (%), 2011 ..................................................................................................... 40 Figure 29: The UAE Credit Card Category Shares by Bank (%), 2011 ....................................................................................................... 41 Figure 30: The UAE Credit Card Category Shares by Scheme (%), 2011 .................................................................................................. 42 Figure 31: The UAE Charge Card Category Shares by Scheme (%), 2011 ................................................................................................ 43 Figure 32: Market Entry Strategies of Foreign Banks in the UAE, 2012 ..................................................................................................... 45 Figure 33: UAE Marketing Strategies Based on Card Type ........................................................................................................................ 46 Figure 33: Current and Future Prospects of Various Cards in Country ...................................................................................................... 48 Figure 34: Value Added Services Offered by Abu Dhabi Commercial Bank in the UAE ............................................................................. 49 Figure 35: Business Cards Offered by Banks in the UAE ........................................................................................................................... 50 Figure 36: Credit Card Pricing Strategies of Various Service Providers ..................................................................................................... 52 Figure 37: Debit Card Pricing Strategies of Various Service Providers ....................................................................................................... 52 Figure 38: The UAE Cards Industry by Type of Card (%), 2008–2017 ....................................................................................................... 54 Figure 39: The UAE Cards Industry Size by Volume (Thousands), 2008–2017 ......................................................................................... 55 Figure 40: The UAE Cards Industry Size by Transaction Value (AED Million), 2008–2017 ........................................................................ 56 Figure 41: The UAE Cards Industry Size by Transaction Volume (Million), 2008–2017 .............................................................................. 57 Figure 42: The UAE Debit Card Category Size (Thousands), 2008–2017 .................................................................................................. 58 Figure 43: The UAE Debit Card Category Size (AED Million), 2008–2017 ................................................................................................. 59 Figure 44: The UAE Debit Card Category Size by Transaction Volume (Million), 2008–2017 .................................................................... 60 Figure 45: The UAE Card Category Market Size by Frequency of Use (Transaction Per Card, Per Year), 2008–2017 .............................. 61 Figure 46: Debit Card Use at ATMs and POS Terminals (Thousands), 2008–2017 ................................................................................... 62 Figure 47: The UAE Prepaid Card Category Size (Thousands), 2008–2017 .............................................................................................. 64 Figure 48: The UAE Open-Loop Prepaid Cards Segment Size (Thousands), 2008–2017 .......................................................................... 65 Figure 49: The UAE Closed-Loop Prepaid Cards Segment Size (Thousands), 2008–2017 ........................................................................ 66 Figure 50: The UAE Prepaid Cards Category Size (AED Million), 2008–2017 ........................................................................................... 67 Figure 51: The UAE Charge Card Category Size (Thousands), 2008–2017 ............................................................................................... 68 Figure 52: The UAE Charge Card Category Size (AED Million), 2008–2017 .............................................................................................. 69 Figure 53: The UAE Charge Card Category Size by Transaction Volume (Million), 2008–2017 ................................................................. 70 Figure 54: The UAE Charge Card Category Market Size by Frequency of Use (Transaction Per Card Per Year), 2008–2017 ................... 71 Figure 55: The UAE Credit Card Category Size by Volume (Thousands), 2008–2017 ............................................................................... 72 Figure 56: The UAE Credit Card Category Size by Transaction Value (AED Million), 2008–2017 .............................................................. 73 Figure 57: The UAE Credit Card Category Size by Transaction Volume (Million), 2008–2017 ................................................................... 74 Figure 58: The UAE Credit Card Category Size by Frequency of Use (Transactions Per Card Per Year), 2008–2017 ............................... 75 Figure 59: The UAE Credit Card Category Size by Average Transaction Value (AED), 2008–2017 ........................................................... 76 Figure 60: Cards Offered by Abu Dhabi Commercial Bank ........................................................................................................................ 77 Figure 61: Benefits Offered by Abu Dhabi Commercial Bank in the UAE ................................................................................................... 78 Figure 62: Value Added Services Offered by ADCB in the UAE ................................................................................................................. 79

LIST OF FIGURES



Figure 63: Cards Offered by Dubai Islamic Bank ....................................................................................................................................... 81 Figure 64: Insurance Benefits Offered by Dubai Islamic Bank in the UAE .................................................................................................. 82 Figure 65: Cards Offered by Emirates NBD ............................................................................................................................................... 84

LIST OF TABLES



LIST OF TABLES

Table 1: The UAE Payment Channels (AED Million), 2008–2012 .............................................................................................................. 36 Table 2: The UAE Cards Industry by Type of Card (Thousands), 2008–2017 ............................................................................................ 53 Table 3: The UAE Cards Industry Size by Volume (Thousands), 2008–2017 ............................................................................................. 55 Table 4: The UAE Cards Industry Size by Transaction Value (AED Million), 2008–2017 ........................................................................... 56 Table 5: The UAE Cards Industry Size by Transaction Value (US$ Million), 2008–2017 ............................................................................ 56 Table 6: The UAE Cards Industry Size by Transaction Volume (Million), 2008–2017 ................................................................................. 57 Table 7: The UAE Debit Card Category Size (Thousands), 2008–2017 ..................................................................................................... 58 Table 8: The UAE Debit Card Category Size (AED Million), 2008–2017 .................................................................................................... 59 Table 9: The UAE Debit Card Category Size (US$ Million), 2008–2017 ..................................................................................................... 59 Table 10: The UAE Debit Card Category Size by Transaction Volume (Million), 2008–2017 ...................................................................... 60 Table 11: The UAE Card Category Size by Frequency of Use (Transactions Per Card per Year), 2008–2017 ........................................... 61 Table 12: The UAE Prepaid Card Category Size (Thousands), 2008–2017 ............................................................................................... 63 Table 13: The UAE Open-Loop Prepaid Cards Segment Size (Thousands), 2008–2017 ........................................................................... 65 Table 14: The UAE Closed-Loop Prepaid Cards Segment Size (Thousands), 2008–2017 ......................................................................... 66 Table 15: The UAE Prepaid Cards Category Size (AED Million), 2008–2017 ............................................................................................. 67 Table 16: The UAE Prepaid Cards Category Size (US$ Million), 2008–2017 ............................................................................................. 67 Table 17: The UAE Charge Card Category Size (Thousands), 2008–2017 ................................................................................................ 68 Table 18: The UAE Charge Card Category Size (AED Million), 2008–2017 ............................................................................................... 69 Table 19: The UAE Charge Card Category Size (US$ Million), 2008–2017 ............................................................................................... 69 Table 20: The UAE Charge Card Category Size by Transaction Volume (Million), 2008–2017 .................................................................. 70 Table 21: The UAE Charge Card Category Size by Frequency of Use (Transaction Per Card Per Year), 2008–2017 ................................ 71 Table 22: The UAE Credit Card Category Size by Volume (Thousands), 2008–2017 ................................................................................ 72 Table 23: The UAE Credit Card Category Size by Transaction Value (AED Million), 2008–2017 ............................................................... 73 Table 24: The UAE Credit Card Category Size by Transaction Value (US$ Million), 2008–2017 ................................................................ 73 Table 25: The UAE Credit Card Category Size by Transaction Volume (Million), 2008–2017 .................................................................... 74 Table 26: The UAE Credit Card Category Size by Frequency of Use (Transactions Per Card Per Year), 2008–2017 ................................ 75 Table 27: The UAE Credit Card Category Size by Average Transaction Value (AED), 2008–2017 ............................................................ 76 Table 28: The UAE Credit Card Category Size by Average Transaction Value (US$), 2008–2017 ............................................................ 76 Table 29: Abu Dhabi Commercial Bank Key Financial Indicators, 2010–2011 ........................................................................................... 80 Table 30: Dubai Islamic Bank Key Financial Indicators, 2010–2011 .......................................................................................................... 83

EXECUTIVE SUMMARY



1 Executive Summary

The UAE is an open economy with a high per capita income and annual trade surplus. It is a federation of

seven emirates: Abu Dhabi, Ajman, Dubai, Fujairah, Ras al- Khaimah, Sharjah and Umm al-Quwain, formed

on December 2, 1971. The government transformed the economy by forming a business environment which

directly benefits the economic growth of the country. Such efforts have seen the UAE rapidly emerge as an

important hub for international trade, finance and tourism which has attracted large inflows of foreign direct

investment (FDI) and expatriate workers. Moreover, successful efforts at economic diversification have

reduced the portion of GDP as a proportion of oil and gas output to XX%.

The UAE cards and payments industry presents positive growth potential

The cards and payments industry grew at a CAGR of X.XX% during the review period and was primarily

driven by the prepaid card category. It is expected to grow at a CAGR of X.XX% over the forecast period.

During the review period, prepaid cards occupied the largest share in the overall cards and payments

industry, and recorded a CAGR of XX.XX%. Debit cards grew at a CAGR of X.XX% followed by charge cards

which grew at a CAGR of X.XX% during the same period. Credit cards grew marginally, at a CAGR of X.XX%.

The industry grew significantly in both volume and value terms during the review period. The volume of

transactions grew from XXX.X million in 2008 to XXX.X million in 2012, at a CAGR of XX.XX%. Debit card

transactions remained the key growth driver, followed by charge cards. Over the forecast period the total

cards transaction volume is expected to grow at a CAGR of X.XX% to reach XXX.X million transactions by the

end of 2017. In value terms, the industry grew at a CAGR of XX.XX% during the review period, from

AEDXXX.X billion (US$XX.X billion) in 2008 to AEDXXX.X billion (US$XXX.X billion) in 2012. It is expected to

grow at a CAGR of XX.XX% over the forecast period (2013−2017), from AEDXXX.X billion (US$XXX.X billion)

in 2013 to AEDXXX.X billion (US$XXX.X billion) in 2017.

As banking customers become more sophisticated, banks must differentiate their product offerings, and card

customization is gaining more attention. Other services include internet banking or serving niche segments

such as high net worth individuals (HNWIs).

Marketing strategies in the prepaid card category to drive growth

The prepaid card category recorded a surge in growth due to the marketing strategies of banks:

Payroll cards are becoming increasingly prevalent in the UAE, driven by the government-mandated

wages protection system (WPS). This is an initiative to safeguard the payment of workers’ wages via

transfers through selected financial institutions and exchange houses.

Jebel Ali, a mid-market mall, is considered a pioneer of the prepaid cards industry in the country.

In April 2010, the Dubai Financial Market (DFM) launched a card which enabled retail investors to

directly receive DFM dividends via the iVestor card. iVestor is issued by the Dubai bourse and is an

open-loop, reloadable prepaid product. Launched in 2010, the card enables shareholders of DFM-listed

companies to efficiently access their annual dividend payments. It also serves as a replacement for

conventional checks and debit account-based methods of paying dividends.

The government’s G2 E-Dirham card launched in May 2009 provides an electronic platform for the

payment and collection of government and non-government services. These include fees, the payment

of bills and fines, internet and mobile phone payments. The system provides top-up facilities through

different accredited and outlets channels, including the National Bank of Abu Dhabi ATMs, direct debits

and mobile phone payments.

Similarly the UAE Exchange, in partnership with Electra Card Services (ECS), launched gocash, a

multi-currency prepaid travel card in 2012.

EXECUTIVE SUMMARY



Infrastructural improvements have driven the payments industry in the UAE

The Central Bank mandated the use of EMV cards effective from 2012. Various service providers such as

Emirates NBD Bank, HSBC Bank and American Express were some of the early adopters of this technology.

In 2011, Abu Dhabi Islamic Bank (ADIB) migrated to EMV cards from magnetic strip cards. Moreover, as of

April 2012, XX% of debit card transactions from Emirates NBD were EMV-compliant and XX% of transactions

performed were from Chip and PIN enabled cards.

Service providers such as Dubai First, Mashreq Bank, Emirates National Bank of Dubai and Abu Dhabi

Commercial Bank issued PayPass cards in 2012. HSBC issued around XX,XXX debit cards equipped with

NFC technology that can be used at approximately XXX outlets. Emirates NBD also released similar cards

which are accepted at around XXX POS terminals. The bank also launched a contactless watch credit card,

enabling customers to make contactless payments at a cost of less than AEDXXX.

Growth of mobile commerce to drive Industry

Mobile commerce (M-commerce) has been enhanced by increased smartphone use in the UAE. The

increasing capabilities of smartphone devices, an exponential rise in applications and declining handset prices

have been instrumental in driving m-commerce. In the UAE, more than XX% of the residents own a

smartphone and the country has twice as many mobile phone subscribers as inhabitants. Moreover, XX% of

the mobile purchases was made through smartphone in 2012.

Sharia-compliant cards

In the UAE, various service providers such as Abu Dhabi Commercial Bank, Dubai Islamic Bank and Emirates

NBD offer cards compliant with Sharia principles. Sharia law prohibits the fixed or floating payment or

acceptance of specific interest or fees known as Riba. Owning to this, banks in the UAE offer cards which are

subject to these laws.

Rapid growth as consumers continue to move from cash to financial cards

According to the Anatomy of E-commerce in the UAE study by JadoPado in 2012, XX% of the total population

prefers to pay via credit card and XX% by debit card, while X% use prepaid cards. Similarly, a study

conducted by Ernst & Young in December 2012 revealed that XX% of the population prefers to pay with

plastic. Banks such as Dubai Islamic Bank and Abu Dhabi Commercial Bank offer various cards targeting the

online shoppers.

Outbound tourism has driven the industry to develop globally accepted debit, credit and prepaid

cards

According to the World Travel and Tourism Council in 2012, the total expenditure on outbound travel

increased from AEDXX.X billion in 2008 to AEDXX.X billion in 2012, after registering a review-period CAGR of

X.XX%. Citibank offers the Citi Travel pass, a credit card enabling a credit limit of up to AEDXXX,XXX.

MARKET ATTRACTIVENESS AND FUTURE PROSPECTS OF

CARDS AND PAYMENTS INDUSTRY



2 Market Attractiveness and Future Prospects of Cards and Payments

Industry

Government efforts have seen the UAE rapidly emerge as an important hub for international trade, finance

and tourism. It continues to attract large inflows of FDI and expatriate workers, and is increasingly playing an

important regional economic role. The UAE cards and payments industry is expected to register a CAGR of

X.XX% over the forecast period to reach XX.X million cards in circulation by the end of 2017. Prepaid cards

gained significant momentum during the review period and recorded a significant adoption rate. Prepaid card

volume grew from X.X million cards in 2008 to X.X million in 2012, at a CAGR of XX.XX%. Over the forecast

period, the category is expected to grow at a CAGR of X.XX% to reach X.X million cards in 2017.

As a consequence, the UAE card industry offers growth opportunities for banks and non-banking card issuers.

Figure 1: Current and Future Prospects of Various Cards in the UAE

Source: Timetric analysis © Timetric

ANALYSIS OF THE UAE CARDS AND PAYMENTS INDUSTRY

DRIVERS



3 Analysis of the UAE Cards and Payments Industry Drivers

The UAE prepaid cards industry recorded significant growth during the review period. This not only resulted in

an increase in the volume of cards issued, but also showed improvements in both process and functions.

Cards issued by UAE banks are now accepted worldwide.

The industry is becoming more competitive every year, with banks and card-issuing companies now forced to

offer more attractive products in order to retain their market positions. Significantly, the emergence of highly

secure payment gateways increased public confidence in payment cards, and had a positive impact on the

overall market development. The rapid expansion of the UAE online retail and outbound travel industries also

supported the country’s cards and payments industry.

Figure 2: The UAE Cards and Payments Industry Drivers



DRIVERS



3.1 Infrastructure Drivers

3.1.1 Migration to EMV cards

The Central Bank stated that, effective from 2012, all debit cards should be EMV compliant and by the end of

2014 all credit cards in UAE should be EMV migrated. According to the Central Bank in 2011, the total use in

terms of value of POS terminals totaled to AEDXX.X billion. In contrast, an amount equivalent to AEDXXX.X

billion was withdrawn from ATMs. This specifies the increase of card use in the UAE.

Various service providers such as Emirates NBD Bank, HSBC Bank and American Express have adopted

EMV cards. For example, in 2011, Abu Dhabi Islamic Bank (ADIB) migrated to EMV cards from magnetic strip

cards. Moreover, as of April 2012, XX% of debit card transactions from Emirates NBD were EMV compliant

and XX% of transactions performed were via Chip and PIN enabled cards.

3.1.2 Emergence of NFC and contactless technology

In collaboration with UAE-based telecommunication provider, Etisalat, MasterCard launched contactless

mobile payments in 2012 through its PayPass terminals. Around XXX terminals accounting to X% of the total

POS terminals in the country support PayPass contactless technology.

Service providers such as Dubai First, Mashreq Bank, Emirates National Bank of Dubai and Abu Dhabi

Commercial Bank issued PayPass cards in 2012. HSBC issued around XX,XXX debit cards equipped with

the NFC technology that can be used at approximately XXX outlets. Emirates NBD also released similar

cards which are accepted at around XXX POS terminals. The bank additionally launched a contactless

watch credit card, enabling customers to make contactless payments.

Emirates NBD’s mobile banking app has also been linked to its internet banking service, enabling customers

to access services through their smartphones. These include viewing financial summaries and scheduled

transactions, checking loan details and transferring funds.


DRIVERS



3.2 Business Drivers

3.2.1 Growing retail industry

According to the Economic Intelligence Unit, in 2010 UAE retail sales accounted to AEDXXX.X billion. The

retail sector is the second largest in the Gulf Cooperation Council (GCC).

Figure 3: UAE Retail Sales Composition (US$ Billion), 2008−2012


COMPETITIVE LANDSCAPE AND INDUSTRY DYNAMICS



4 Competitive Landscape and Industry Dynamics

Amidst an uncertain global economic environment, the UAEs economy showed relative signs of resilience as

the cards and payments industry grew and reached a value of AEDXXX.X billion (US$XXX.X billion) in 2012,

at a CAGR of XX.XX%. Driven by a number of macro pillars such as trade, logistics, tourism and services,

GDP growth is forecast at X.X% for 2013. There are a wide range of payment methods available to

consumers, merchants, businesses, corporations and governments in the UAE. However, consumer-oriented

payment systems such as cash and cards account for most transactions.

This section contains the market shares of various payment channels, and details how they have grown

during the review period. The channels covered include checks and card payments.

4.1 Market Share Analysis by Payment Channels

This section explores the market shares of various payment channels and details how these channels have

grown during the review period. The popular payment channels were checks and card payments. During the

review period, cards payments recorded an increase in market share from XX.X% in 2008 to XX.X% in 2012.

Check payments also grew at a CAGR of XX.XX% during the review period.

Table 1: The UAE Payment Channels (AED Million), 2008–2012

Payment Channels AED Million, 2008 Market Share (%), 2008 AED Million, 2012 Market Share (%), 2012

Cards Payments XXX,XXX.X XX.X% XXX,XXX.X XX.X%

Check Payments XXX,XXX.X XX.X% X,XXX,XXX.X XX.X%

Total X,XXX,XXX.X XXX.X% X,XXX,XXX.X XXX.X%


MARKET SIZE AND GROWTH POTENTIAL OF PAYMENT CARD

INDUSTRY



5 Market Size and Growth Potential of Payment Card Industry

The following section contains an overview of the size and growth potential of the UAE cards and payments

industry. The section is divided into six chapters. Chapter one includes an industry share analysis by type of

card, chapter two discusses the share and future growth of the total card industry by value and volume,

chapter three provides the size of the country’s debit card category, chapter four discusses the category size

of prepaid cards in the UAE, and chapters five and six cover the size and growth potential of the charge card

and credit card categories respectively.

5.1 Market Share Analysis by Type of Card

The card industry as a whole grew significantly at a CAGR of X.XX% during the review period, primarily driven

by the debit and prepaid card categories. The slow growth rate was mainly due to the global economic crises.

During the review period, prepaid cards grew significantly and recorded a CAGR of XX.XX%. Debit cards

grew at a CAGR of X.XX%, followed by charge cards which grew at a CAGR of X.XX% in the same period.

The overall card industry is expected to grow at a CAGR of X.XX% over the forecast period, driven primarily

by the prepaid cards category, which is expected to grow at a CAGR of X.XX%. The debit cards category is

also expected to grow, at a CAGR of X.XX% over the forecast period, while charge cards are expected to

exhibit positive growth at a CAGR of X.XX% followed by the credit cards category, which is expected to grow

at a CAGR of X.XX%.

Higher crude supply and oil prices, backed by strong trade, tourism, logistics and manufacturing industries,

and the UAE’s early efforts to diversify its domestic economy, lead to the timely support of public revenues.

Table 2: The UAE Cards Industry by Type of Card (Thousands), 2008–2017

Types of Card: 2008 2012 2013 2017 CAGR 2008–2012 CAGR 2013–2017

Debit card

X,XXX.X

X,XXX.X

X,XXX.X

X,XXX.X X.XX% X.XX%

Credit card

X,XXX.X

X,XXX.X

X,XXX.X

X,XXX.X X.XX% X.XX%

Prepaid card

X,XXX.X

X,XXX.X

X,XXX.X

X,XXX.X XX.XX% X.XX%

Charge card

XX.X

XX.X

XX.X

XX.X X.XX% X.XX%

Total XX,XXX.X

XX,XXX.X

XX,XXX.X

XX,XXX.X X.XX% X.XX%


MARKET SIZE AND GROWTH POTENTIAL OF PAYMENT CARD

INDUSTRY



5.2 Total Market Size and Forecast of Card Industry

The card industry grew in both volume and value terms during the review period. Over the forecast period it is

expected to increase at a CAGR of X.XX% in volume terms and XX.XX% in value terms.

5.2.1 Analysis by number of cards

In terms of card volume, the industry grew at a CAGR of X.XX% during the review period, and is forecast to

post a CAGR of X.XX% over the forecast period. Growth in the volume of prepaid cards is expected to drive

the industry.

Table 3: The UAE Cards Industry Size by Volume (Thousands), 2008–2017

2008 2009 2010 2011 2012

CAGR

2008–2012

Total Cards – Review XX,XXX.X

XX,XXX.X

XX,XXX.X

XX,XXX.X

XX,XXX.X X.XX%

2013 2014 2015 2016 2017

CAGR

2013–2017

Total Cards – Forecast XX,XXX.X

XX,XXX.X

XX,XXX.X

XX,XXX.X

XX,XXX.X X.XX%


Figure 4: The UAE Cards Industry Size by Volume (Thousands), 2008–2017


APPENDIX



6 Appendix

6.1 Methodology

All Timetric cards and payments reports are created by following a comprehensive, four-stage methodology.

This includes market study, research, analysis and quality control.

1) Market Study

A. Standardization

Definitions are specified using recognized industry classifications. The same definition is

used for every country.

Annual average currency exchange rates are used for the latest completed year. These

are then applied across both the Review and forecast data to remove exchange rate

fluctuations.

B. Internal audit

Review of in-house databases to gather existing data:

Historic market databases and reports

Company database

C. Trend monitoring

Review of the latest cards and payments companies and industry trends

2) Research

A. Sources

Collection of the latest market-specific data from a wide variety of industry sources:

Government statistics

Industry associations

Company filings

International organizations

Cards and payments regulatory agencies

B. Expert opinion

Collation of opinion taken from leading cards and payments industry experts

Analysis of third-party opinion and forecasts:

Broker reports

Media

Official government sources

C. Data consolidation and verification

Consolidation of data and opinion to create Review datasets

Creation of models to benchmark data across sectors and regions

3) Analysis

A. Market forecasts

Feeding forecast data into market models:

Macroeconomic indicators

Industry-specific drivers

Analysis of cards and payments industry database to identify trends:

Latest cards and payments trends

Key drivers of the cards and payments industry

APPENDIX



B. Report writing

Analysis of market data

Discussion of company and industry trends and issues

Review of financial deals and cards and payments trends

4) Quality Control

A. Templates

Detailed process manuals

Standardized report templates and accompanying style guides

Complex forecasting tool used to ensure forecast methodologies are consistently applied

Quality-control checklists

B. Quality control process

Peer review

Senior-level QC

Random spot checks on data integrity

Benchmark checks across databases

Market data cross-checked for consistency with accumulated data from:

Company filings

Government sources.

6.2 Contact Us

If you have any queries about this report, or would like any further information, please contact

[email protected].

6.3 About Timetric

Timetric is an innovative, fast-growing economic and business research firm that provides critical intelligence

on emerging economies and key global industries. Timetric provides detailed independent economic and

sector research, business insights and authoritative, independent commentary, all delivered using

sophisticated content delivery and data visualization technologies.

Timetric collects data through an extensive primary and secondary research network using robust

methodologies and highly innovative data acquisition and storage technologies. Its highly qualified teams of

economists and analysts draw on their collective industry experience to deliver analysis, comment, opinion

and advice on the latest country and market trends and conditions. Timetric provides extensive data services

and commentary to influential business media operations around the globe.

The Timetric product team is based in London, San Francisco, Hyderabad, Sydney and Singapore, and

consists of over 300 economists, analysts, journalists and researchers, and a team of 40 software engineers.

6.3.1 Timetric’s approach

All Timetric’s products and services are founded on three key principles:

High-quality data

All Timetric’s services are grounded in high-quality data. Timetric collects data in a number of innovative ways

– including extensive business and consumer surveys conducted through sophisticated market research

technology, exclusive industry research programmes and models, the systematic collection and curation of

huge public data sets such as national statistics sites, regulatory filings and procurement databases, mining of

business and government ‘exhaust data’, plus analysis of business and social media sentiment.

mailto:[email protected]

APPENDIX



Combined, the Timetric data assets consist of well over 1 billion time series, and tens of billions of data points,

creating a powerful resource for data models, forecasts and analysis.

Expert analysis

Timetric’s intelligence services are provided by in-house teams of economists, analysts and researchers,

working to programs that are guided by global advisory boards of leading economists and industry advisors.

Our analysts collectively have hundreds of years of research experience from leading institutions.

Timetric analysis draws on high-quality data sources, including proprietary panel and survey data, and is

grounded in proprietary data analysis methodologies, analysis frameworks and forecasts.

Powerful delivery and visualization tools

Timetric understands that its users want to spend more time analyzing information than finding it, so it has

created a highly intuitive and extremely responsive user interface that organizes data in subject-specific

modules, coupled with powerful search and index technologies to enable data to be easily found, classified

and cross-referenced. The Timetric interface is designed by specialized UI experts, and builds on a platform

constructed specifically to enable fast, powerful access, visualizations and analytics of big data and content

sets.

6.4 Services

Timetric offers a range of economic, industry and consulting services:

Economic Intelligence Services

Timetric leverages its extensive data assets, through the use of innovative technologies, in order to produce

thought-provoking analytical content delivered in the form of economic briefing services. Timetric also enables

users to access the data components that power this analysis, enabling the reader to understand further, dig

deeper or create their own assessments.

Industry Intelligence

Timetric’s industry Intelligence Centers are premium web-based services that provide access to interactive

tools, comprehensive research and expert analysis in key industry sectors. They provide invaluable decision

support presented in an easily digestible format and grounded in deep research.

Consulting

Timetric specializes in the development and delivery of innovative research solutions that are designed to

provide competitive advantage and profitability to its clients. Timetric’s cutting-edge research processes,

ground-breaking technology and expert researchers and analysts can be used to produce timely, cost-

effective, insightful and actionable recommendations to support users’ growth strategies.

APPENDIX



6.5 Disclaimer

All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any

means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the

publisher, Timetric.

The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please

note that the findings, conclusions and recommendations that Timetric delivers will be based on information

gathered in good faith from both primary and secondary sources, the accuracy of which Timetric is not always

in a position to guarantee. Timetric will accept no liability whatsoever for actions taken based on any

information that may subsequently prove to be incorrect.

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