By Hadi Raad
A single glance at the world around us, and it is evident that people are living increasingly digital lives. Information and communications technology consumption is growing at an exponential rate; so much so that by 2020, the number of mobile subscriptions will closely be on par with the number of people on the planet. What’s more, two out of three of these will be smartphone subscriptions. Mobile is undoubtedly central to our daily lives. It is a life companion serving our information, entertainment, health, organisation, and communication needs. In fact, studies show that on average, a consumer checks his or her phone 150 times a day, or five-six times every waking hour.
We see these trends reflected in Qatar, ranked second amongst the world’s top 10 countries for household Internet penetration according to the “State of Broadband – 2015” report published by the UN Broadband Commission. Furthermore, the 2014 ICT report issued by Qatar’s Ministry of Information and Communication shows that on average a household in the country has nine mobile phones and at least three laptops. While these are ideal circumstances for mobile and digital payments to thrive, in reality, only 13% of the Internet users in Qatar shop online.
Among the top reasons cited for this lag in adopting online payments were concerns about the lack of security and control, as well as the ease of use. Interestingly enough, industry stakeholders are evolving their platforms to address these issues that prove to be bottlenecks in the digital payment ecosystem. Our goal at Visa is to make our services as easy to use and accept in the digital world as they are in the physical world.
For example, Visa Checkout, which enables convenient payment methods for online shoppers on PCs or mobile devices, by storing their shipping and payment information securely, is seeing wide global acceptance with over a quarter million merchants offering the payment option and over 330 financial institutions enrolled to the service.
In the Middle East, Visa Checkout was launched in the UAE in April this year, and already has been adopted by nine UAE issuing banks, representing more than 80% of Visa’s UAE e-commerce volumes. According to a Visa-commissioned study by Millward Brown, 95% of online customers enrolled in Visa Checkout in the US say sign-up was easy, and 96% feel secure making a purchase with Visa Checkout - underlining how such technology can enhance the online retail environment.
Currently, mobile is being increasingly seen as a game-changer in the online commerce space. According to a 2014 comScore report, 60% of retailers’ traffic is generated through mobile devices – already exceeding traffic generated by desktops. Mobile payments, on the other hand, account for only 15% of the transactions in the digital space. That said, the opportunity for growth of retail payment on mobile devices is huge, and expected to reach 30% of all online retail at a value of $707bn by 20187.
Understandably, the future of retail hinges greatly on the various possibilities that mobile presents, which to a large extent are defined not by what retailers want to sell, but more by how and what consumers want to buy. Mobile is leading the purchase environment convergence or omnichannel retail, which includes in-store payments, traditional online, online and in-store pickup, and mobile point-of-sale delivery models. In addition, the mobile channel is also making it possible to create new purchasing experiences through contextual offers, location-based content and “tap-n-pay” experiences that are available at the palm of the consumer’s hand.
The latest innovation that facilitates growth on this trend is token-based technology, which enhances the digital payment experience – online, at the point-of-sale or in-app - by adding an extra layer of security to every transaction. Visa Token Service can enable interoperable NFC mobile payment solutions that work on Visa’s Paywave platform worldwide. Solutions such as Apple Pay, Samsung Pay, and Android Pay are powered by Visa Token Service. Visa’s Digital Enablement Program streamlines the process for merchants and financial institutions to adopt new digital and mobile payment solutions powered by Visa Token Service.
Visa is inviting the entire industry to join us in the pursuit of new commerce and payment models. We’re doing this by opening the edges of our network; providing a growing ecosystem of clients, partners and developers fast and secure access to VisaNet through Visa’s Developer Platform. Visa’s open approach to payments is already accelerating the development of innovative applications and services.
As Qatar moves forward with its National Vision 2030, at the core of which is developing the nation’s digital agenda, the opportunity to adopt innovative payment technology is growing. Moving from card payments to digital and specifically mobile payments will constitute a major part of this evolution. At Visa, we believe this change can be brought about only through collaborative initiatives that seek to understand the needs of the market and develop solutions that keep the customer experience at the front, while being scalable, secure, and sustainable.
♦ Hadi Raad is head of Emerging Products and Innovation, CEMEA, Visa
