(MENAFN Editorial) A significant percentage of the region's financial institutions and multi-channel retailers say fraud, security and risk management are considered the biggest concerns affecting their organizations, according to a study unveiled by Network International, the leading payment solutions provider in the Middle East. Titled, "GCC Payments Innovation Survey 2014," the first-of-its-kind payments study in the region is aimed at providing insights into the perception of financial institutions and retailers with regards to the challenges and opportunities faced by the payments sector.
Stakeholders of the payments sector identified seven key themes that are expected to dominate the sector through 2014. These include fraud & security, narrowing payment margins, increasing focus on mobile-related payment modules, value-added services linked to payments, digital wallets, significance of loyalty-programmes and the growing presence of innovation-focused organisations in the payments world, traditionally the domain of financial institutions and banks.
According to the "GCC Payments Innovation Survey," 53% of respondents rated fraud and security as the major payments issues affecting their organizations. The cost of accepting card payments along with narrowing margins for payments (45%) was cited as another key challenge for the stakeholders. Additionally, 51% of the respondents reported risk management represents a key focus area for them.
While security and risk management top the list of challenges, 43% of the industry stakeholders believe that mobile payments represent significant opportunity for banks and retailers in the region, with majority of the respondents feeling optimistic about the untapped possibilities of digital wallets. The ability to enhance consumer experience (62%) and easier payment options (55%) account for the optimism about digital wallets.
Bhairav Trivedi, Chief Executive Officer, Network International, said: "As the payments leader in the region, we are delighted to present the findings of the first GCC Payments Innovation Survey, which was administered with the aim to understand insights of key stakeholders, whilst providing reliable data on the regional ayments industry. By addressing an array of topics, ranging from challenges, opportunities, innovations and future drivers for the regional payments sector, we are confident that the outcome of the study will serve as reference material for a wider spectrum of stakeholders including financial institutions, merchants, and regulators. It is our ambition to provide such valuable insights on a regular basis, thus furthering our understanding about the future of the payments sector."
Meanwhile, innovation is reportedly a key factor that continues to drive the payments industry in the Middle East. Introduction of mPOS machines (51%), followed by contactless payments (44%) and digital wallets (41%) appear to be the latest payment innovations that have enormous growth potential in the region. Representing a significant part to play in payment innovation, three-quarters of the respondents believe that banks and payment institutions will lead future innovations in the sector. The study also reveals that approximately half of the respondents (52%) consider technology giants such as Apple and Google to be the future payments innovators.
Speaking of the survey findings, Paolo Zambonini, Executive Vice President “ Product & Innovation, Network International, said: "The findings from the first-of-its-kind survey are a true reflection of the significant growth potential for the regional payments industry. Furthermore, the themes that have emerged from the survey testify the importance of innovation, which is a critical determinant of the future success of the payments sector. We would also like to thank all valuable stakeholders who have provided great insights through the survey."
Respondents were also asked by Network International to name the factors that will drive the eCommerce and online payments sector. A clear majority (83%) regards secure payments as a key enabler of online payments, followed by fulfilment honouring (64%) and hassle-free check-out facilities (63%). Loyalty schemes appear to be an important element for stakeholders with simpler loyalty programs (69%) cited as more beneficial, followed by travel linked incentives (62%) and location-based loyalty benefits for customers (53%).