Visa and Mena-based digital payment solutions provide Arab Financial Services (AFS) have unveiled their SME partner programme to launch prepaid cards for businesses in Bahrain and Oman.
This collaboration will pave the way for digitising merchant settlements through prepaid cards, the companies said.
The deal seeks to enhance the digital credentials of AFS’s merchant bases in both countries.
CEO at AFS, Samer Soliman, said: “The strategic partnership between AFS and Visa represents a step forward for business’ digital payments in Bahrain and Oman as well as our shared vision of digitised payments ecosystems.
“This will be the first B2B use case for prepaid cards. We plan to expand this offering to other markets in the Middle East and Africa. Together, AFS and Visa can quickly bring to the market prepaid cards that are designed with security at the core. This has the potential for enhancement and growth over time. I look forward to a fruitful and ever-growing collaboration that will evolve to other areas like fintech partnerships.”
Prepaid card penetration remains low in Bahrain, standing at 6.5 cards per 100 individuals in 2022.
However, this is about to change due to growing consumer awareness around the benefits of prepaid cards. For example, transaction volume rose from 10.2 million in 2018 to 14.3 million in 2022, according to GlobalData, publishers of EPI.
The market registered robust growth in terms of the number of cards in circulation, volume and value at respective compound annual growth rates of 9.7 per cent, 8.9 per cent and 11.8 per cent in the 2018–2022 period. This trend is expected to continue till 2026.
Regional general manager in Saudi Arabia, Bahrain and Oman at Visa, Ali Bailoun, said: “Through this partnership, AFS will be enabling their merchant community with Visa prepaid credentials in Bahrain and Oman.
“This is in line with our mission of digitising the merchant ecosystem. We look forward to deepening our partnership with AFS and expanding our collaboration across digital acceptance and fintech enablement.”
Cash accounts for 64.3 per cent of payment transaction volume with cards constituting 32 per cent. The use of payment cards is on the rise in Oman, bolstered by a series of government and bank initiatives to promote electronic payments.
According to GlobalData’s estimates, the rising adoption of contactless, emerging payment methods such as QR-code-based terminals and robust e-commerce growth are boosting electronic payments which is fuelling the shift towards cashless payments.
The frequency of payment cards is predicted to register a compound annual growth rate of 9.1 per cent till 2026.