Harness power of Internet to manage your cash

HOW long do you spend online – either on your computer or mobile phone? It seems we’re a nation of cyber spacers, and are increasingly harnessing technology to hunt down the best deals, manage our money on the move and pay for goods and services.

As the online world becomes increasingly accessible through smart phones and tablet PCs, more and more consumers are turning to the internet.

Many parts of the Middle East and Northern Africa (MENA) region are experiencing a staggering increase in internet usage, up from 7.8 million to 187 million users in the last decade, according to research agency TNS MENA.

Steve Hamilton-Clark, chief executive of TNS MENA, says: “Over the past ten years, internet use in the greater MENA region is up 2,300%. I am seeing this as one of many indications that consumer brands must change the way they do business.”

Online research

A recently-published TNS Digital Life global survey looks at how consumers in 60 countries behave online. It shows that 90% of MENA-based consumers conduct online research before making a purchase.

Some 84% of the global population belong to one or more social networks and 47% of region-based respondents cite social networking as their most important online activity.

UAE residents spend about 15 hours a week surfing the web for personal use, including three hours on social networking sites.

“Brands must keep in mind why users are online in the first place if they are to harness the power of the social explosion,” says Hamilton-Clark.

E-commerce boom

Saudi Arabia and the UAE lead the GCC in consumer e-commerce, with an estimated $520 million and $1.9 million spent respectively during 2010, according to a recent report from IMRG and Visa Middle East. It estimates that consumer e-commerce spending in the GCC will reach $15 billion by 2015.

Online retailers are tapping into the internet boom. Namshi.com, the e-tailer of 20,000 designs of footwear, clothing and fashion accessories, said earlier this month that it had expanded its operations to ship goods to consumers across the GCC and Egypt.

The website, which was launched in January delivering only to the UAE, has also introduced a new Arabic language interface, and has designs of becoming the region’s preferred shopping destination.

“Our success thus far is a testament to the rise in popularity of online shopping in the Arab world,” said Louis Lebbos, co-founder of Namshi. “We saw a great opportunity in the e-commerce space, as Arabs and expats living in the Middle East become more comfortable making online transactions.”

Money management

With 60 million internet users in MENA, we are also increasingly turning to the internet when it comes to our finances.

Search engines are the most used and most preferred tool for finance research in the UAE, according to a poll commissioned by Google.

The study showed that, while consumers here mostly prefer to purchase finance products offline, much of our research happens online, with 52% of the 1,000 people surveyed saying they used a search engine to obtain information on products such as bank accounts and personal loans. Almost 40% say they bank online on a monthly basis.

Money on the move

The global mobile money industry reached revenues of $1.6 billion in 2011. Francesco Burelli, a partner at Value Partners Management Consulting, says: “Looking at the Middle East, the mobile money sector, which includes mobile banking, is developing rapidly. Our forecast is that the trend will continue at an average growth of 88% between 2009 and 2013.”

MENA boasts 80 million mobile phone users, with those aged under 25 expected to drive the region’s digital growth.

“The 90s saw the mobile phone turn from a luxury to a mass market proposition and this has enabled the launch of additional mobile services, including financial services,” says Burelli. “Today, mobile is a mainstream distribution and business channel in the financial services landscape.”

Prepaid plastic cards

Prepaid cards are also finding their niche in the Middle East as the region’s population embraces a digital and mobile lifestyle.

The Middle East region hosts a large unbanked population made up of immigrant workers and young citizens, with these two groups of people expected to drive the growth in prepaid technologies.

James Ratcliff, editor of Cards International and spokesman for the Prepaid Summit held in Dubai in March, says: “With almost 65% of the population under 25, the Middle East has massive potential in youth-led prepaid services, particularly in areas like online spending, events and gift cards.”

Strong growth is also expected across the travel, general purpose, remittance, payroll and government payments sectors.

New entrant

Visa has just launched a prepaid card, MyNetCard, dedicated solely to online purchases. The card, provided by Majid Al Futtaim Finance, functions like a credit card but without the hassle of credit checks, lengthy application process or need for a bank account.

MyNetCard can be purchased over-the-counter at more than 100 outlets across the UAE, including ENOC, EPPCO, Zoom, Al Fardan Exchange, Al Ghurair Exchange, Micro and Carrefour hypermarkets, and loaded with funds for immediate use.

Rasool Hujair, chief executive of Majid Al Futtaim Finance, hails the card the “next generation of online accessories for the UAE market”.

“MyNetCard is ideal for those who want added security when making online purchases, or for those who don’t necessarily qualify for a credit card,” he says. “It’s accessible to all and allows everyone to enjoy online shopping opportunities that were previously limited to credit card holders.”

Mobile payments

We're also ready for mobile payments, whereby instead of paying with cash, cheque or credit card, you can tap your mobile phone across a sensor.

In a report by Mastercard, the UAE is seventh in terms of being ready for mobile payments, although actual penetration and consumer awareness is lagging.

Have you joined the technology revolution? Do you research products, bank online or use a prepaid card? Go on, share your stories...