Tucked away behind the Mall of the Emirates in Dubai, in an unfashionable part of Al Barsha, is the headquarters of “the biggest little company nobody’s ever heard about”.
That’s how Network International (NI) is described by its chief executive, Bhairav Trivedi. Network may be relatively anonymous at the moment, but if his ambitious plans come to fruition, that will not be the case for long. Network has the potential to be a billion-dollar initial public offer at some stage in the not-so-distant future.
Most consumers will have come across Network when they sign their credit card bills, but probably will not have noticed. Network’s name is printed on the “customer copy” chit we all happily scrawl on after a good meal, or at the supermarket checkout, or at the Dewa office.
“We are not a consumer facing company, but everybody needs us and almost everybody uses us. Our market share in the UAE is between 60 and 70 per cent, depending on whether to measure it by the number or the value of transactions. We’re the largest in the Middle East and North Africa,” says Mr Trivedi.
The Al Barsha HQ with its 410 employees is the centre of a global network that competes with the credit card leaders like Visa and MasterCard, and is a genuine UAE success story.
Network also cooperates with the two credit card leaders, processing their transactions via retail outlets across the region.
It was set up by Emirates Bank 20 years ago to provide payments processing facilities for the bank, before it was merged with NBD. In 2010, the private equity group Abraaj Capital took a 49 per cent stake, leaving Emirates NBD as the majority holder but also opening up the possibility that the Network business might be spun off as a separate corporate entity.
“An IPO could be considered at some stage, but that’s purely a shareholder decision, and not one that I’m involved in,” says Mr Trivedi.
“My job is to ensure the management systems are in place whatever the decision of the shareholders. We’ve been involved in a process of ‘disentanglement’ [from ENBD] for some time and expect the final stages to be completed by the end of this year,” he adds.
Private equity shareholders such as Abraaj typically look to exit an investment in five to seven years, but could do so earlier if company and market circumstances are considered appropriate.
Certainly, Network’s business seems to be thriving (though no separate financials are published), on the back of the economic recovery in the UAE, which has got consumers reaching for the plastic again, and through the global growth strategy forged by Mr Trivedi and his team.
Central to this is Network’s relationship with Discover, the third largest card provider in the world after Visa and MasterCard. “Discover is a US company, and truly innovative. For example, they were the first to come up with the idea of cash back at point of sale positions,” says Mr Trivedi.
In 2008, Discover bought Diners’ Club, the credit card that appeared to have fallen behind its more widely used rivals. It was a perfect fit for Network, which already had the Diners’ franchise in the UAE, Egypt, Jordan and Lebanon. Diners’ is now usable at all Network locations, and is looking to expand the brand in the Middle East from its UAE base.
Via Discover, Diners’ and the Pulse ATM system, Network is available in 145 countries, through 22 million merchant outlets and more than 1 million ATMs.
The relationship with Discover also provided the platform for Network’s recent initiative in the “wage protection service”, a growing market in the Middle East. Many expatriate workers typically use a debit card to withdraw their wages from an ATM, but carrying cash presents its own problems.
Network came up with Mercury, a pre-paid electronic cash card that employees can use for transactions in the UAE and for sending remittances to their home countries, via the Discover global network. “All those hours spent standing in queues at transfer agencies can now be put to better use,” says Mr Trivedi.
For a man whose career has been spent in the development of cashless payment systems (he was previously head of Citigroup’s global remittance business), Mr Trivedi is not prepared to call the end of old-fashioned “folding money” yet.
“Cashless payment is never going to entirely replace paper. Some 85 per cent of global transactions are still done in cash or cheques. It will take many generations to go cashless,” he says.
But he is ready to take advantage of the move to cashless and direct debit systems. “I’m certain there will come a fully fledged direct debit system. It needs a platform, and NI could provide that for all financial institutions here. We’d be keen to service this huge growth market,” he says.
The other market of great potential is in the use of consumer data for marketing and other retail purposes. Network has access to valuable information on consumer spending patterns that retailers would pay handsomely to exploit. “But we would not supply data on individuals, just in anonymous aggregate form. The potential is enormous,” he says.
fkane@thenational.ae
