Visa cardholders in Qatar are rapidly switching from old fashion cash to modern card payments according to statistics released by Visa International, the world’s leading provider of payment solutions. Qatar has the fastest retail card spending growth of any country in the Middle East for the second year running. Payment for goods or services that were made using Visa payment cards, excluding cash withdrawals from ATMs, grew by 83 percent in 2005.
Travel has been one of the driving forces behind the rapid retail spending growth. Among GCC countries, Qataris, along with Omanis, registered the highest percentage of spending per card while they are travelling outside the country. Qatari-issued payment cards were mostly used in the U.K. which reflects that it’s the favourite destination for the residents of Qatar with the biggest expenditure being made on lodging and hotels while abroad.
Kamran Siddiqi, General Manager for Visa International in the Middle East, said “Qatar spending statistics for 2005 reflect a trend among travelers away from hard currency to payment cards. “As the most widely accepted payment card around the world and the most convenient and secure way to pay, Visa cards are becoming an increasingly indispensable aid while traveling. Carrying cash from one developed country to another is simply not necessary anymore. Using Visa payment cards is easier and safer. The risk of receiving counterfeit currency during travels is removed and travelers can easily keep track of their expenses whilst away from home.”
With a 50% increase in the number of Visa cards issued in 2005, the growth of retail spending by Qataris was mainly due to the Visa Electron Card, which achieved its highest ever expenditure amounts for Qatar growing by 116 percent year on year, while the spending on Visa Gold and Platinum Cards grew by 74 percent.
Siddiqi attributed the growth in Visa Electron Card spend to the ongoing promotional and educational campaigns carried out by Visa International and its Member Banks in the region about the benefits of using Visa Electron for payments rather than for withdrawing cash.
Using a card for everyday shopping brings a broad range of benefits: it is safer and more convenient for the cardholder; it increases revenue and customer satisfaction for merchants; it keeps money in the banking system, which reduces cash handling costs and makes funds available for economic loans, which are vital to support the emerging sectors of the economy.
Electronic payment systems lower transaction costs, increase government efficiency, stimulate consumption, help bring people into the banking system and fight corruption and the shadow economy by improving financial transparency. All these things help boost gross domestic product (GDP) growth. In 2004, Qatar's Gross Domestic Product (GDP) grew by 28.8 percent, while GDP growth in 2005 is estimated to grow by 29.1 percent. And of course increased GDP leads to increased expenditure on cards – it’s a virtuous circle.
As one of the fastest growing economies in the world, Qatar has emerged as one of the wealthiest countries in the world in terms of per capita income with 2004 figures showing a record level of $36,105, and an estimated GDP per capita as high as $45,085 in 2005.
Economic expansion in Qatar is set for the long term due to the abundance of natural resources and the ongoing population growth, which between 1997 and 2004 increased at an annual average of 5.3 percent, making a total 42.5 percent increase over a period of eight years. Because of these factors, there has been a rapid growth in the economically active population in all major economic sectors, including the retail and service segments.
Overall, Visa International’s member banks in Qatar are playing a significant role in the country's move towards becoming a cashless society. Electronic payments have revolutionized the industry, offering consumers a more convenient, secure, transparent and flexible alternative to cash.
© 2006 Al Bawaba (www.albawaba.com)
