While there are no valid excuses for defaulters in the eyes of the card issuers, sometimes situations do get a bit beyond control.

Read what senior executives at leading banks in UAE have to say about the situation.

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The UAE is estimated to have Dh20 billion as outstanding payment on credit cards. Also, about 8-10 per cent of that could be distressed or delinquent, bank officials told Emirates Business.

“We can expect to see ‘distressed debt’ on credit cards of Dh2bn within the country,” officials said on condition of anonymity. The trend, they added, is expected to continue.

“Yes, we will see a rise in defaults. We’ve seen an increase in delinquencies in the past six months and I expect that to continue for another six months,” said Suvo Sarkar, Executive Vice-President and General Manager – Retail Banking at Emirates NBD.

Vimal Kumar, Senior Vice-President and Cards Business Manager, Mashreq, said, “Given the scale of the correction in the financial and real estate sectors, it is natural to expect an escalation in the level of impaired assets in the [credit] card business.

“We estimate that growth in the payment card market will slow down considerably in the next 12-18 months and borrowing levels may be impacted by the liquidity squeeze, correction in the economic environment and related job losses. We believe this is just the beginning of a long journey for organisations to restructure their operating models to survive in this environment,” Kumar said. He added that the penetration of unsecured exposure as a percentage of GDP is still at a fairly low level.

Sarkar said after very strong growth during 2008, the credit card industry has seen a slowdown. “For most banks, card spend would be down 10-15 per cent compared to the last quarter of 2008. Essentially, consumers are being thrifty and spending less and travelling less often,” he said.

Kumar said the large expatriate population adds to the rise in defaults.

Thimal Perera, Regional Head of Cards, HSBC Bank Middle East, added: “In adverse economic conditions, skips [by expatriate workers] rise and so does bad debt – it is cyclical.”

However, Sarkar pointed out that delinquencies do not necessarily translate to bad debts. “While delinquencies have gone up, with increased collection efforts, we are seeing an increased amount of
recoveries,” he said.

“There are customers who want to consolidate their debt and convert it in to longer term installment loans at lower interest rates – and banks are encouraging this. These are challenging times and banks will have to work closely with customers to work for mutual interest,” he said.

Source Courtery: Shuchita Kapur – Business24-7.ae

AXA Insurance Gulf, the region’s number one international non-life insurer has launched its online service allowing customers to buy and renew their motor insurance policies online.

The service which can be accessed via its website www.axa-gulf.com provides a quote in less than
1 minute and rewards those who buy a new policy online with a 5% discount on their premium. Customers need to fill in the necessary details like car make and driving history in a simple 2 step process and pay via their credit card. The policy documents are delivered to a location of their choice within the UAE by courier.

Alexis de Beauregard, Chief Officer Marketing and Retail Product Offering said, “Through customer insight we found out that our customers wanted a simple and easy way to buy their policies without the inconvenience of battling traffic and trudging all the way to their insurer to buy a policy. If you fill in all your information correctly and provide the right documents you can get your insurance with the click of a button without moving farther than your laptop. To renew a policy is now even easier.”

51% percent of internet users in the UAE reported purchasing products and services online.
E-commerce users in the UAE are estimated to exceed 1.16 million consumers and the UAE’s penetration of e-commerce consumers stood at 25.1%, markedly higher than its neighbours in the GCC region.*

“We expect a significant number of our direct customers to use this unique service and as many as 70% of our customers confirmed that they would be happy to renew their policies online if AXA offered such a service” continued Alexis.

Jean-Louis Laurent Josi, CEO AXA Insurance Gulf, commented, “The UAE is seeing a healthy increase in the number of internet users and is one of the fastest broadband markets with a multiplying population of young tech savvy people. We seek to become as accessible to our customers as possible and this facility was created to save time and money for our clients through technology. By providing a multi-access solution for its products, AXA Gulf is now ahead in this market: we provide to customers based on their needs, they can now choose to buy motor insurance through a broker, our call center, our walk-in offices or, now, via the Internet.”

The company plans to provide all its personal lines products online in the near future enabling customers to buy total insurance solutions via the internet. The online service is just another proof of how AXA Insurance is striving hard to differentiate itself from its competitors to become a preferred insurer and provide better service to its customers.
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Source Courtesy: Al Bawaba www.albawaba.com

Read the following article as reported in Khaleej Times.

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Alertness on the part of an Empost employee helped the police to bust a gang of credit card cheats recently. Three Asians were arrested in this connection.

According to police, an Asian man approached the Empost office in Al Rumool area in Dubai and after claiming to be a GCC citizen, requested for a credit card parcel.

On being asked by the Empost staff whether he had received any intimation from Empost, he said since he was passing by he thought of collecting the parcel personally. The man aroused the suspicion of the Empost staff, who expressed their inability to hand over the parcel. Promptly, they informed the bank, which advised them to send an alert if the man came again to claim the parcel.

The bank, meanwhile, contacted the owner of the credit card, who told them that he did not visit any Empost office. The bank then alerted the Criminal Investigation Department of Dubai Police.

When the man again approached the Empost office on June 7 to claim the parcel, he was arrested.

Colonel Khalil Ebrahim Al Mansouri, director of the Criminal Investigation Department, said the suspect told the police that the forged documents were given to him by two Asians, who were also arrested. Police recovered many forged salary certificates and credit cards from the two.

The arrested men confessed that they had received the information about the owner of the credit card from and employee of a foreign bank in the UAE.

The suspect employee at the foreign bank confessed that he leaked confidential information about the owner of credit card to the suspects, to enable them to get the card from Empost.

Dubai Police have referred all the arrested men to Public Prosecution.

Courtesy: Amira – Khaleej Times

Read the following article published in Gulf News:
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By Siham Al Najami, Staff Reporter
Published: June 08, 2009, 23:22

Dubai: Dubai Police have launched a weeklong awareness campaign on protection of credit cards amid a global increase in counterfeiting crimes.

At press briefing of the campaign yesterday, Lieutenant-Colonel Ali Ahmad Ganem, Director of Al Rashidiya Police Station and head of the campaign, highlighted the need to keep the cards secure particularly during the summer season.

Globally, the number of counterfeit cases and revenues collected from these crimes has significantly increased with $200 million (Dh734 million) in 1983 to $1.25 billion in 1992, he said.

“In comparison to many major countries and capitals across the globe we have relatively small numbers of cases related to credit cards. It is still under control as we only had 19 cases in 2008,” he said.

The campaign aims at educating employees in banks, shopping malls, and the public in general about the different ways they can protect credit card data.

Awareness banners will be displayed on ATM machines across Dubai.

Source: http://www.gulfnews.com/nation/Police_and_The_Courts/10321126.html

In theory, the concept of mobile payments has a strong business case, given the high market penetration rates of mobile devices, such as cellular phones and PDA?s, in many parts of the world. In addition, mobile operators and financial institutions, through the use of these devices, envision an attractive way to enable their customers to make payments. On the consumer side, users can reap the benefits of convenience, permitting them to buy goods and services from any location.

In principle, a mobile device can be used as a POS (point of sale) tool. Mobile operators and financial institutions consider this concept as the next logical step in making mobile devices a trusted payment device for consumers, acting as a payment instrument supplementing cash, cheque, credit card and debit card.

Currently, financial institutions are rolling out wireless POS capabilities to merchants which are in-turn competing with a consumer?s mobile phone. Several new services have been introduced around the world in which merchants are accepting payments from wireless POS terminals. These wireless POS terminals, for example, allow merchants to offer home delivery services in which payments are presented and accepted upon delivery of goods or services at the consumer?s location.

Wireless POS terminals use the wireless networks of mobile operators to send payment instructions to a merchant acquirer?s payment server. Consequently, wireless POS services are classified as an extension of traditional payment services. Given that in some areas of the world almost everyone will soon own a mobile phone, and most merchant locations offer POS terminals as a form of payment, it is at least conceivable that the mobile device will take over a large part of the retail payment market.

Since wireless POS implementations are an extension of current payment infrastructures, users still need to use a credit or debit card to make purchases. The convenience associated with current wireless POS methods have to do with the fact that these terminals are brought to the location of the purchase. For example, in a restaurant environment with the user paying for their bill via debit card from their seat, or for their groceries which have been delivered to their front door.

Mobile devices enable the use of numerous services, services that do not need card readers, personal computers, and modem combinations or a merchant?s wireline POS terminal. Nowadays, mobile devices have an embedded chip that can be used to store information and provide secure authorization and identification.

The Need for Interoperability

But to make these services available to the majority of mobile users, mobile payment service providers need to roll out services that offer interoperability. There have been numerous mobile payment pilots conducted that enable mobile devices to be used as a payment option, some of which have advanced into full mobile payment services (e.g. PayPal, PayBox, MovilPago). To date, we?ve discovered that the key to providing a successful mobile payment service has to do with the benefits it gives the end user and the end user’s customers: convenience, security, and freedom being a few key elements.

Though the industry has a long way to go before mobile devices will become a consumer?s payment instrument of choice, to ensure the stability of a viable mobile payments infrastructure, collaboration is the key.

Both mobile operators and financial institutions have tried, with little success, to implement their own individual pilot projects. Both parties have encountered numerous difficulties. Mobile operators, for example, because of their extensive existing customer base, technical know-how and billing comprehension, seemed the most likely candidates to provide mobile payment services. However, problems associated with risk management and the collaboration of numerous providers needed to accomplish interoperability have arisen. Financial insitutions on the other hand are confronted with a limited number of users and high infrastructure costs. To remedy these problems, mobile operators and financial institutions have begun collaborating to jointly offer mobile payment services to their customers. For instance, leading Dutch direct bank ING/Postbank Nederland, has partnered with the Netherlands number three mobile carrier Telfort, to offer users mobile access to the bank?s retail applications and link user bank accounts to Telfort?s prepaid service top-up capabilities for account recharging. In this case, the fact that these two entities are taking advantage of their natural symbiosis is a big step in the right direction.

Right now there are four entities needed to make a payment via credit card (acquirers, issuers, merchants and consumers) to make a payment via mobile device, there are five (mobile operators, acquires, issuer, merchant and consumers). As a result, the ideal business model includes the cooperation between mobile operators, financial institutions, technology suppliers and industry associations to create a certain amount of standardization which will ensure the successful implementation of a strong mobile payments infrastructure.

Still, numerous issues, including limited functionality available through the current generation of networks as well as a lack of standards to name a few, are still hampering the efforts being carried out by these industry players. In addition, questions regarding successful revenue generating business models also remain.

Conclusion

As mentioned earlier, cell phone and PDA penetration rates are higher then they’ve ever been, with forecasted growth rates showing exponential increases in consumer adoption. Accordingly, industry focus should be centered around the business side. Right now it is not feasible for a mobile operator or a financial institution to role out competing services on a proprietary model that does not include interoperability. Mobile operators and financial institutions must work together to implement mobile payment services that marry a consumer?s bank account with their mobile subscription. Offering payment services should not be seen as a competitive advantage, but rather as a necessity which will drive the success of the rollout of mobile commerce.

Today we see several initiatives taking place including the creation of various industry associations designed to address the different issues associated with the mobile industry. With these activities underway-mobile operators and financial institutions are beginning to work together to roll out new payment services. Pre-paid top up, for example, is the first real commercial mobile payment application that is being introduced into several markets. Financial institutions and mobile operators are collaborating to enabling mobile subscribers to electronically pay for their pre-paid wireless accounts using several banking channels such as telephone banking, Internet banking, and ATM and mobile banking, completely automating the ?top-up? experience using SMS (Short Message Service).

Currently, payment instruments are stored in virtual wallets residing either on the mobile device or centralized on the open network service platform. Consumers register for the service through their financial institution, mobile operator or service provider, depending on how the service is setup. The registration is necessary to link the consumer?s subscription data with their financial information and provision the mobile device for the service. Future methods may see users using their mobile device as a way to simply access their bank accounts, whereby the mobile operator?s function will be simply to transport the data. In addition, smart cards issued by financial institutions may begin to become more prevalent.

As mobile services and infrastructures evolve we will begin to see the true notion of mobile payment instruments living up to the hype of ?anytime, anywhere payments.? Soon, mobile payments will become an integral part of consumer lifestyles, replacing the payment instruments we have hidden in our wallets today. It is clear, that the co-operation between mobile operators and financial institutions is needed to build a viable mobile payments offering. It is also clear that the next logical payments industry step is to provide consumers with the ability to make payments for goods and services on their mobile devices. The only true concept of ?anytime anywhere payments? is conceivable through access via a mobile device. ‘Where there’s a wireless, there’s a way’ and the key to the success of the industry is as simple as giving consumers what they want.

Article Source: http://EzineArticles.com/?expert=Torbjorn_Zetterlund http://EzineArticles.com/?Mobile-Payments—Collaboration-is-the-Key&id=16047

But is everything truly so disturbing and past hope?

Read the following article published by Gulf News on the Filipino statistics which does give an indication of +/- percentages that might be applicable for other nationalities also.
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Asian diplomats: no drop in the UAE workforce

The overall expatriate workforce in the UAE has not dropped drastically, according to Asian diplomats who backed their claims with statistics which indicate an increase for some nationalities in the first quarter of this year.

Virginia Calvez, a labour attaché at the Philippines consulate, said that Filipino community had not been affected dramatically by the financial crisis.

While 3,000 Filipino workers in Dubai and Northern Emirates have been made redundant due to the crisis, some 5,000 Filipinos entered the country in the first quarter of 2009, according to Philippines consulate’s statistics.

Currently, there are 300,000 Filipino workers in the UAE with 215,000 working in Dubai and the northern emirates indicating that only about 1.4 percent of the Filipino workforce has returned home, according to Calvez.

Source courtesy: http://archive.gulfnews(dot)com/articles/09/04/30/10309007.html
By Wafa Issa, Staff Reporter
Published: April 29, 2009, 23:08