22 vritti August 2020
Mobilution
The Rise of
Digital Payments
According to a McKinsey report, digital consumer
adoption in Qatar is high not only amongst
GCC countries but also compared to various
developed economies of the world. It is leading
the region in risk-taking ability with regard to
embracing new technology. With their risktaking
appetite coupled with favorable
demographics and consumer inclination
towards digital channels, commercial banks
and fintechs are coming up with platforms to
digitize payments. Though mobile payment
service from Ooredoo has been available for
quite some time now, the recent entrants
[1]
including CB wallet from Commercial Bank ,
QPAY, SADAD and SkipCash are bringing
host of new features and services for all
ecosystem partners. Some amongst them
are working on unique business propositions
to drive revenue apart from the traditional
merchant fee model. SkipCash, for example, is
bringing together merchants, digital marketing
players and loyalty service providers on its
platform. With this collaboration it is aiming to
acquire new customers quickly and build
stickiness through loyalty. This stickiness will
be a lucrative proposition for marketing and
loyalty players to promote their brands. Since
the market is just getting warmed up, these
players will be facing stiff competition from
new entrants working to disrupt the space
and get their piece of the digital payments
market. A notable player in this category is
Ahli Bank which is in works to launch its
[2]
digital wallet this year .
Digital Payments
leading to Innovation
The introduction of these new platforms is
going to change the way customers access
financial services in Qatar especially through
their banks. The first significant change will
be on the UI/UX designs. Fintechs are known for
their customer-centric design which gives them
a unique advantage when compared to
traditional banks. However, with changing
customer needs, even banks are now starting to
adopt the new perspective of customer-centricity
which is going to become a hygiene factor.
Secondly, with multiple players vying for the
same pie, new entrants will aim to carve out
their own niche by looking for still un-served
or under served segments and build products/
services for them. In Qatar we can broadly
identify 2 retail customer segments. The first
one constitutes the local Qatari and expats in
white-collar jobs. This segment is digitally
savvy and would be looking for unique
experiences such as complete digital onboarding,
Personal Finance Manager amongst
others. And the second segment comprises
of the migrant blue-collared workers. This
segment will be more interested in platforms
that allow them to access financial services
without having a bank account. Having the
interface in their native language will be a
definite plus, especially for a couple of top
migrant languages.
And lastly, this change will bring in innovative
technologies that provide convenience and
security. Most Qatari banks have launched
contactless NFC cards in the market in the
last 3 to 4 years. However, now banks are
taking it a step further by leveraging HCE and
card tokenization technology. With them
consumers can make payments on POS
terminal by just tapping their NFC capable
Android phones thus eliminating carrying of
physical cards. HCE payments are faster,
convenient and more secure compared to
regular card-present transactions. Commercial
Bank has been the first bank to introduce this
feature to its customers. Owing to the absence
of other international players in this space
such as Apple Pay, Google Pay and Samsung
Pay, it’s a good opportunity for banks to offer
unique experience using their own platforms
and build better customer loyalty. I’m sure
other banks would be following the suit.