Strenuous efforts to convert Egypt into chip credit and debit card technology
Converting Egypt's cash-dominated society to a one reliant on a card-based payment alternative is a must due to the rapid evolution of chip card technology.
Credit and debit cards are now using chip technology instead of magnetic strip, allowing cardholders to finalize their transactions via smart I. card. According to Anne Cobb, President of Visa International in the Central Europe, Middle East and Africa (CEMEA) region, Egypt has one of the strongest reasons for switching to visa cards pointing out that Egypt has best Internet infrastructure in the region.
She predicted that Egypt will witness a great leap in chip card technology similar to that realized in the communications and mobile services as well as the fast semi- free Internet.
Cobb expounded that one of the main reasons for shifting to Visa cards is because cash and paper money-based system have variable cost, while the electronic card systems have fixed costs. Besides the multi-function benefits of the smart card, it helps reduce fraud across the globe, she added.
Cobb pointed out that there are strong demand for a common standard, unifying all these functions on a technological base, more efforts should be exerted to accelerate migration of Egyptian cash society to chip card technology.
She noted that Egypt realized only 9 percent growth rate in volume of card-payment compared 40 percent in CEMEA region last year.
Although, there are 23 Egyptian banks dealing with Visa International, yet still 97 percent of Egypt's population depend on cash-payment, according to Tarek Al-Husseini, General Manager of Visa, Egypt.
According to Visa international, all countries in CEMEA region will use chip technology in 2006.
It has established a $ 36 million fund to help countries of the region accelerate transferring to chip technology.
So far, the region has three million chip cards out of a total of 60 million. However, growth indicators show that by the end of 2004 the number is likely to reach 6.9 million.
To compare this with the region's 2004 first quarter indicators, Visa figures indicate that fraud constitutes 0.36 percent of all transactions in Egypt to 0.23 percent, Saudi Arabia, 0.11 percent in the United Arab Emirates (UAE) similar to the UK, 0.43 percent in Morocco and 0.19 percent in Lebanon.
In all Arab states, the average is 0.12 which equals the world average.
The multi-application card includes, credit and debit payment, electronic purses and signature, metro-ticketing, medical insurance as access to all government's subsidies in retail stores.
Moreover, chip cards is not only limited to online payments via the Internet or mobile phones but also used to identify the cardholder in any banking transaction such as online-banking and online-brokerage.