07/04/09 - Abu Dhabi, UAE -  Khaled Mubarak al Awbthani, of Abu Dhabi, uses his debit card issued by Abu Dhabi National Bank for all his purchases.  (Andrew Henderson/The National) *** Local Caption ***  ah_090407_DebitCard_0017.jpg
Khaled al Awbathani, an Abu Dhabi resident, uses his debit card issued by National Bank of Abu Dhabi for all his purchases.

Giving yourself credit with debit



For Khaled al Awbathani, the choice between paying with cash, credit or debit card is clear. Debit cards, he says, offer a better alternative to carrying large sums of cash, steer him clear of incurring debt and help track his expenses and available bank balance. "I can see how much I've spent, and it also helps me see how much I have left in different accounts," he explains. "It's also easier to buy with debit cards." Mr al Awbathani isn't alone. While people in the western world have long been using debit cards to make purchases large and small, the trend of substituting cold hard cash with debit cards - and staying away from credit cards - is beginning to catch on here. The tip in debit's favour stems ultimately from the financial crisis - banks are less liberal with credit than before and have been decreasing credit lines. In these lean times, consumers are also becoming more attentive to the dangers of the enticing power of credit. "People just buy with their credit cards, and every month they buy more with credit and get more debt," Mr al Awbathani says. Indeed, a debit card may be the best cure for an addiction to credit. Debit cards offer the convenience of being able to make purchases with plastic without all the fees and interest charges that come with plunking down your Visa card. When you swipe your debit card, the cost of the transaction is deducted straight away from your current account, just as if you'd withdrawn money from an ATM and paid in cash. The benefits, though, go beyond avoidance of the debt trap. Imagine having to pay for a household appliance that costs thousands of dirhams with cash. If your bank hasn't issued you a credit card or if you are uncomfortable with charging any expenses on credit, a debit card might be just the ticket. On the other hand, some consumers find debit cards particularly useful for inexpensive items because they relieve them of the hassle of searching for loose change through pockets or purses. In the US, where banks have shifted greater marketing energy to debit from credit, the payment industry has promoted debit as a convenient tool for "everyday expenses". More importantly, debit cards, unlike ATM cards, can be used at the point of sale for purchases and for withdrawing cash anywhere in the world because they operate on MasterCard or Visa networks. "Debit cards give customers so much more flexibility and open so many more doors for them," said Anil Chander, the head of cards and business strategy at National Bank of Ras Al Khaimah (RAKBank). RAKBank began offering debit cards in November at the request of its customers. Its new clients receive a debit card, and the bank is converting all its existing ATM cards to debit cards, Mr Chander said. More banks are likely to follow suit and convert their ATM cards to debit cards as attention turns increasingly towards this form of payment. "At the moment credit doesn't look as attractive because banks have to fund the lines of credit when credit is expensive and they are taking on the risk, so more banks are turning to debit," said Olann Kerrison, the head of analysis at the London-based research firm Lafferty Group, which recently completed a study of the card industry in the UAE. Arup Makhopadhyay, the executive president and head of retail banking at Abu Dhabi Commercial Bank, said consumers were now more receptive to debit because economic conditions had made many uncomfortable with using credit cards. Introduction of more debit cards would certainly be welcomed by consumers who are not fond of carrying cash or using credit cards. "I'd rather use [a] debit card than to keep withdrawing cash from ATMs," said Saurav Parida, who recently moved to Abu Dhabi from the UK. Mr Paridasaid he had been making more stops at the ATM than he liked and had paid for all his purchases with cash because his bank, HSBC, does not offer debit cards. Change, however, is coming to HSBC. It will begin rolling out contactless debit cards to all savings and current account holders in June. HSBC, one of the major retail banks in the UAE, said it delayed the introduction of debit cards until it could upgrade its technology. "As a global bank we also have to ensure that all our products and services launched are in line with HSBC Group's guidelines and principles, which at times may take longer than a local implementation," said Thimal Perera, the bank's regional head of cards. So far, banks in the UAE have done little to bring consumers over to debit. Reward programmes on debit cards have been few, marketing barely visible, and many banks until recently had not even offered the cards to their account holders. Yet despite lacklustre efforts to promote debit cards, many consumers have shown a fondness for them. Between 2005 and 2008 debit cards in all categories grew faster than credit cards in the UAE. The number of debit transactions used to buy items grew 115 per cent and the volume spent at cash registers grew 196 per cent, according to the study by Lafferty Group. Still, reward programmes and other incentives might be necessary to win over traditionalists who believe cash is the best medium. Take Indira Sabdula, an Abu Dhabi resident, who wondered aloud why she needed to use cards. "This is a safe country, it is not like I have to worry about having cash with me," she said. "I'm very comfortable with cash because I can count how much I took with me, and when I get home I can count again and know exactly how much I spent." Asked whether her bank could entice her to substitute paper payments with plastic by offering reward points, she had to think about it. "Maybe," she said. But banks are unlikely to offer debit card reward points as readily as they do for credit cards, simply because credit cards are more profitable. With debit payments, banks give up the opportunity to collect interest. They also receive a smaller transaction fee from merchants on debit payments compared to purchases made with credit cards. Some banks have tried to get around this problem by substituting high profit with high volume. If banks can get customers in the habit of using debit cards for small purchases, they reason, they can make money on the sheer number of transactions. For instance, Bank of America, the largest retail bank in the US, introduced its "Keep the Change" programme two years ago. The scheme rounds up all debit card charges to the nearest whole number and puts the difference into a savings account, though it caps the amount awarded at US$250 (Dh918) per year. Mr Kerrison said the "Keep the Change" programme was an example of a reward system that was not expensive for banks and still appealed to consumers. But for many customers who pay with plastic, credit cards remain the preferred product. Patrick Nineur, for instance, an architect who lives in Abu Dhabi, said that even when he uses credit cards for purchases he still pays his bills on time and doesn't incur interest charges. For those like Mr Nineur who pay their credit card bills in full every month, a card that allows them to pay later provides an easy way to help maintain a budget. With all transactions available for viewing on most banks' websites within a day or two of purchases, credit cards give you practically the same transparency in your expenses as debit cards do, with the added bonus that you have up to 30 days to pay off what you spent. What's more, credit cards offer richer rewards. So if you are disciplined in paying your credit card bills, a card that delivers more rewards may be a better choice. If banks in the Gulf keep promoting debit cards, as is expected, they will be following a strategy adopted in other markets about four or five years ago. In the US, the surge in the promotion of debit cards occurred at a time when credit was readily available, but at a time when American banks were trying to convert more cash transactions to plastic. Having concluded that there was little room for growth in credit payments, American institutions saw debit payments as an easy way of growing their businesses. Banks in the UAE, by contrast, are turning to debit cards because of troubles in the credit market and concerns that consumers are becoming more reluctant to charge purchases. Will it work? It's hard to tell, but the success of debit cards here will likely depend largely on how heavily banks promote them, since customers show that they are ready to embrace them, especially if the rewards schemes add extra incentive. mjalili@thenational.ae

Indika

Developer: 11 Bit Studios
Publisher: Odd Meter
Console: PlayStation 5, PC and Xbox series X/S
Rating: 4/5

Museum of the Future in numbers
  • 78 metres is the height of the museum
  • 30,000 square metres is its total area
  • 17,000 square metres is the length of the stainless steel facade
  • 14 kilometres is the length of LED lights used on the facade
  • 1,024 individual pieces make up the exterior 
  • 7 floors in all, with one for administrative offices
  • 2,400 diagonally intersecting steel members frame the torus shape
  • 100 species of trees and plants dot the gardens
  • Dh145 is the price of a ticket
Soldier F

“I was in complete disgust at the fact that only one person was to be charged for Bloody Sunday.

“Somebody later said to me, 'you just watch - they'll drop the charge against him'. And sure enough, the charges against Soldier F would go on to be dropped.

“It's pretty hard to think that 50 years on, the State is still covering up for what happened on Bloody Sunday.”

Jimmy Duddy, nephew of John Johnson

COMPANY PROFILE

Company name: ASI (formerly DigestAI)

Started: 2017

Founders: Quddus Pativada

Based: Dubai, UAE

Industry: Artificial intelligence, education technology

Funding: $3 million-plus

Investors: GSV Ventures, Character, Mark Cuban

Company Profile

Name: Direct Debit System
Started: Sept 2017
Based: UAE with a subsidiary in the UK
Industry: FinTech
Funding: Undisclosed
Investors: Elaine Jones
Number of employees: 8

The Roundup : No Way Out

Director: Lee Sang-yong
Stars: Don Lee, Lee Jun-hyuk, Munetaka Aoki
Rating: 3/5

The Mandalorian season 3 episode 1

Director: Rick Famuyiwa

Stars: Pedro Pascal and Katee Sackhoff

Rating: 4/5 

AIDA RETURNS

Director: Carol Mansour

Starring: Aida Abboud, Carol Mansour

Rating: 3.5./5

Day 2, Dubai Test: At a glance

Moment of the day Pakistan’s effort in the field had hints of shambles about it. The wheels were officially off when Wahab Riaz lost his run up and aborted the delivery four times in a row. He re-measured his run, jogged in for two practice goes. Then, when he was finally ready to go, he bailed out again. It was a total cringefest.

Stat of the day – 139.5 Yasir Shah has bowled 139.5 overs in three innings so far in this Test series. Judged by his returns, the workload has not withered him. He has 14 wickets so far, and became history’s first spinner to take five-wickets in an innings in five consecutive Tests. Not bad for someone whose fitness was in question before the series.

The verdict Stranger things have happened, but it is going to take something extraordinary for Pakistan to keep their undefeated record in Test series in the UAE in tact from this position. At least Shan Masood and Sami Aslam have made a positive start to the salvage effort.

UAE currency: the story behind the money in your pockets
Four motivational quotes from Alicia's Dubai talk

“The only thing we need is to know that we have faith. Faith and hope in our own dreams. The belief that, when we keep going we’re going to find our way. That’s all we got.”

“Sometimes we try so hard to keep things inside. We try so hard to pretend it’s not really bothering us. In some ways, that hurts us more. You don’t realise how dishonest you are with yourself sometimes, but I realised that if I spoke it, I could let it go.”

“One good thing is to know you’re not the only one going through it. You’re not the only one trying to find your way, trying to find yourself, trying to find amazing energy, trying to find a light. Show all of yourself. Show every nuance. All of your magic. All of your colours. Be true to that. You can be unafraid.”

“It’s time to stop holding back. It’s time to do it on your terms. It’s time to shine in the most unbelievable way. It’s time to let go of negativity and find your tribe, find those people that lift you up, because everybody else is just in your way.”

MATCH INFO

Uefa Champions League semi-finals, first leg
Liverpool v Roma

When: April 24, 10.45pm kick-off (UAE)
Where: Anfield, Liverpool
Live: BeIN Sports HD
Second leg: May 2, Stadio Olimpico, Rome

The Department of Culture and Tourism - Abu Dhabi’s Arabic Language Centre will mark International Women’s Day at the Bologna Children's Book Fair with the Abu Dhabi Translation Conference. Prolific Emirati author Noora Al Shammari, who has written eight books that feature in the Ministry of Education's curriculum, will appear in a session on Wednesday to discuss the challenges women face in getting their works translated.

Confirmed bouts (more to be added)

Cory Sandhagen v Umar Nurmagomedov
Nick Diaz v Vicente Luque
Michael Chiesa v Tony Ferguson
Deiveson Figueiredo v Marlon Vera
Mackenzie Dern v Loopy Godinez

Tickets for the August 3 Fight Night, held in partnership with the Department of Culture and Tourism Abu Dhabi, went on sale earlier this month, through www.etihadarena.ae and www.ticketmaster.ae.

Sarfira

Director: Sudha Kongara Prasad

Starring: Akshay Kumar, Radhika Madan, Paresh Rawal

Rating: 2/5

Super Mario Bros Wonder

Developer: Nintendo EPD
Publisher: Nintendo
Console: Nintendo Switch
Rating: 4/5

WHY AAYAN IS 'PERFECT EXAMPLE'

David White might be new to the country, but he has clearly already built up an affinity with the place.

After the UAE shocked Pakistan in the semi-final of the Under 19 Asia Cup last month, White was hugged on the field by Aayan Khan, the team’s captain.

White suggests that was more a sign of Aayan’s amiability than anything else. But he believes the young all-rounder, who was part of the winning Gulf Giants team last year, is just the sort of player the country should be seeking to produce via the ILT20.

“He is a delightful young man,” White said. “He played in the competition last year at 17, and look at his development from there till now, and where he is representing the UAE.

“He was influential in the U19 team which beat Pakistan. He is the perfect example of what we are all trying to achieve here.

“It is about the development of players who are going to represent the UAE and go on to help make UAE a force in world cricket.” 

THE STRANGERS' CASE

Director: Brandt Andersen
Starring: Omar Sy, Jason Beghe, Angeliki Papoulia
Rating: 4/5

SPECS

Engine: 2-litre 4-cylinder petrol (V Class); electric motor with 60kW or 90kW powerpack (EQV)
Power: 233hp (V Class, best option); 204hp (EQV, best option)
Torque: 350Nm (V Class, best option); TBA (EQV)
On sale: Mid-2024
Price: TBA

The specs: Macan Turbo

Engine: Dual synchronous electric motors
Power: 639hp
Torque: 1,130Nm
Transmission: Single-speed automatic
Touring range: 591km
Price: From Dh412,500
On sale: Deliveries start in October

COMPANY PROFILE

Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
$3.6 million led by Global Ventures

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.

Read part three: the age of the electric vehicle begins

Read part two: how climate change drove the race for an alternative 

Read part one: how cars came to the UAE

COMPANY PROFILE

Company name: Klipit

Started: 2022

Founders: Venkat Reddy, Mohammed Al Bulooki, Bilal Merchant, Asif Ahmed, Ovais Merchant

Based: Dubai, UAE

Industry: Digital receipts, finance, blockchain

Funding: $4 million

Investors: Privately/self-funded

Du Football Champions

The fourth season of du Football Champions was launched at Gitex on Wednesday alongside the Middle East’s first sports-tech scouting platform.“du Talents”, which enables aspiring footballers to upload their profiles and highlights reels and communicate directly with coaches, is designed to extend the reach of the programme, which has already attracted more than 21,500 players in its first three years.


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