Financial institutions and merchants must focus to cater to the needs of millennials in the UAE and Saudi Arabia, according to a new report by Visa.
Revealing a wealth of untapped opportunities for banks, issuers and merchants, the report reveals that the payment choices of the segment are influenced by rewards and benefits associated with specific products, especially travel miles, which shows a travel-conscious segment.
The report also highlights that the segment is also unhappy with the online user experience in the region.
The company surveyed more than 1,000 millennials (aged between 18 and 34 years) and non-millennials (over 34 years) across Saudi Arabia and the UAE. The survey highlighted that the segment is a large, influential and increasingly affluent group and the fastest growing section within the region.
The study further indicates that millennials in these two countries, with a higher spending power than their global peers, are contributing to the growth of e-commerce spending in the GCC which rose by 25% in 2015.
E-commerce is said to be the most popular activity, with 76% of UAE and 58% of Saudi Arabia millennials shopping online, while nearly half currently pay their bills online.
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In the UAE, credit cards are the preferred way to pay for all major online categories.
In Saudi Arabia, prepaid cards are the preferred means of payment for electronics (40%), travel for leisure (44%), and travel for business (53%).
Visa believes that credit cards will account for 65% of non-cash retail payment volumes by all UAE residents, while in Saudi Arabia debit cards will account for more than 70% by 2018.
Kriti Makker, of Visa Performance Solutions who undertook the study on behalf of Visa, said: “With millennials in the UAE and KSA having spending power two and five times that of their Middle East peers, there is significant potential for banks, issuers and merchants with the right business models.
“Visa’s research shows Millennials in these countries to be highly sophisticated consumers who have embedded technology into their lives, which has important commercial implications for areas like the development of loyalty programs and the targeting of advertisements.”