End looms for plastic fantastic in the UAE

A UAE start-up backed by MAF Group aims to make credit and debit cards obsolete for shoppers in this country and the wider world.
A person tries a smartphone loaded with Google Wallet at the National Retail Federation in New York. Mark Lennihan / AP Photo
A person tries a smartphone loaded with Google Wallet at the National Retail Federation in New York. Mark Lennihan / AP Photo

How close are we in the UAE to seeing our mobile phones replace our wallets?

The idea has been bouncing around for a few years now but it seems that 2015 will see a confluence of technology from Apple and Google combined with a local start-up, Beam Wallet, that could change our shopping habits for ever.

It is not just the technology that will change our buying patterns, it is the people behind the multi-million dollar investment into the UAE start-up – MAF Group, the company that arguably in 2005 took the retail landscape in this country on to another level when it opened Mall of Emirates. It has seen a host of imitators enjoying the fruits of its bold decision ever since. If the investment into Beam Wallet is as successful and as mimicked then wallet and purse makers would be wise to look for alternative sources of income.

The Apple iPhone 6 and 6 Plus are on track to be the headline winners of technology gifts both here and overseas, with the Apple chief executive Tim Cook saying demand for the iPhone 6 was “off the charts”.

Mr Cook says he has “never felt so great” about the launch of a gadget as he had about the smartphones, which went on sale last month.

“We are selling everything we make,” he says.

Apple shipped 39.27m smartphones in its fourth quarter, compared with 33.79m in the same period last year, setting a new record for the company.

That may not be of interest to those who do not tote the Silicon Valley product in their pockets but the implications of the ubiquitous iPhone could well have a major impact on our shopping behaviour.

Consumers in the UAE will be able, from next year, to make payments with Apple’s digital wallet Apple Pay, which will be integrated into the iPhone 6 and the new Apple Watch. It has been developed by Apple in collaboration with MasterCard, Visa and American Express. That would seem to have all the major credit technology players on board to assuage any concerns one may have over security.

Using your phone as a wallet has been possible for a few years now but has not really caught the public’s imagination. Apple Pay, which launched in the United States in October, uses near-field-communication (NFC) while Google Wallet started with NFC but now uses a software called Merchant Customer Exchange (MCX).

Google Wallet first utilised NFC for digital payments in 2011 with the launch of the Nexus S smartphone. Since then, major retailers and NFC competitors have been jockeying for position within the industry, preparing for the new age of consumer spending. The fight between NFC and MCX, however, need not be a game changer here in the UAE because of Beam Wallet.

Beam is an app where you register with your debit, credit or pre-payment card and then instead of using cards to make payments, you do it through your phone. It also supports Apple Pay and Google Wallet – it does not mind what you pay with as long as you use Beam as the platform. A QR Code, a sort of barcode, is shown on your phone when you are ready to transact and the merchant scans that code to complete the transaction. Obviously, the merchant needs to accept Beam as a form of payment. It has more than 1,100 retailers in the UAE already signed up with some 100,000 users since it went live commercially at the end of 2012.

The fact that MAF – the owner and operator of 18 shopping malls, 56 Carrefour hypermarkets and 53 supermarkets, 11 hotels and nine multiplex cinemas – has taken an equity stake in Beam Wallet suggests we will be see a big push in this country for mobile payment in 2015 and far more people using the platform.

“Just the amount of smartphone users, which is the essence of a personal computer, in the country made us interested in the product, when we saw how it enhanced the retailing landscape we decided to look closer,” says Rasool Hujair, the chief executive of MAF-Finance.

“We spent a year doing the due diligence into the company and the platform and made the investment in November, it’s a big investment for us, a multi-million dollar investment,’ he says, declining to identify the specific amount.

“This is the first time that technology enhances the customer experience and changes the way retailers and their consumers interact and will interact in the future. Obviously, it will help the payment industry grow, but it is really a marketing tool for retailers.”

The fact that Beam Wallet offers incentives and motivation to use the phone rather than physical cash is crucial to the success of the platform.

Customers get value from the app and retailers get customers. Retailers pay a certain amount for the use of the platform as a marketing tool. An example is that of a cafe owner and a customer. If you have used a specific cafe before, then the cafe owner, via a beacon in the mall, will know you are in the mall and he can message you via the app to for instance offer you a free dessert if you call in for a snack.

The marketing is directly between the retailer and the customer, the app logs the amount of traffic and usage so as a retailer you only pay for what benefits you.

Carrefour, as part of the MAF Group, already takes the card but is now discussing ways of extending the experience. Today you can pay for your Carrefour shopping through Beam, in the future there will be new functionality that allows Beam users to skip the queues and walk away having paid virtually. It requires a further investment from retailers but the technology is there now and will be changing the way we shop over the next few years.

“The UAE is digitally savvy market and a smartphone-heavy market. People like to shop and people have credit cards, which makes it a unique place and allows for the widespread adoption of this technology,” says Shezan Amiji, the co-founder of Beam Wallet.

“With regard to the business, there can be no greater growth curve than the mobile commerce space at the moment,” he says.

“Nearly everybody carries a smartphone and yet there is very little to enhance the buying and shopping experience. Beam Wallet does that by rewarding you for using it – it’s that simple.”

Beam Wallet is built to drive sales, attract customers and retain existing customers. If a retailing ecosystem embraces that strategy, the phone as a wallet is closer than we may think. With the geographical reach of MAF and the relationships it has with other retailers 2015 could well be the year that the wallet went digital in this country and the wider world.

“Beam is a global company and we intend to take it across Mena but it is in Australia and Sweden has expressed interest in using the technology,” says Mr Hujair.

“We will begin with the GCC first and will pursue opportunities as we see them globally. 2015 will be a major year for us and we will increase the number of users 6 fold, we will have more than 500,000 users by the end of the year.

“Wherever a credit card is accepted so should Beam – that is our aim.”


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Published: December 31, 2014 04:00 AM


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