For nearly 40 years, Mastercard, a global technology company in the payments industry, has been at the forefront of driving payment innovation in the region. The company has a strong track record in supporting a wide range of stakeholders, from governments and corporations to disruptive fintech players and SMEs, as they navigate the evolving digital landscape.
In this interview, J.K. Khalil, executive vice president and division president for East Arabia at Mastercard, shares insights into the company’s pivotal role in the digital transformation sweeping across the region. He also explores the company’s partnerships that are fuelling the growth of East Arabia’s digital ecosystem for a more connected, more inclusive future.
How is Mastercard leveraging AI to enhance its offerings?
AI is transforming entire industries and opening doors to a whole new world of opportunities, which is why we’ve made it one of our focus areas in terms of innovation. We have been deploying AI models and automated platforms in banking and commerce for decades now, from machine learning credit scoring models to fraud prevention and detection modules and many other areas in loyalty and customer engagement.
We are also working with governments to enhance AI capabilities and readiness in the countries where we operate. In the UAE, we launched the Center for Advanced AI and Cyber Technology in partnership with the UAE Artificial Intelligence Office last year. The project aims to usher in a new era of transformative technology in the region.
Our recent initiatives, such as the AI Challenge in collaboration with the UAE Artificial Intelligence Office and First Abu Dhabi Bank (FAB), demonstrate our dedication to innovation and support for the nation’s digital transformation journey. We have also invested in over 100 AI and cybersecurity projects globally, ensuring we stay at the forefront of technological advancements. As an example from the region, we have made our Brighterion AI-powered fraud prevention solution available to over 60,000 merchants through Network International to protect their transactions.
Disruptive fintech players have emerged as key drivers of innovation in the banking and finance sector. How is Mastercard helping fintech companies amplify their positive impact?
We believe that fintech companies bring something essential to any ecosystem that is developing fast. They are experimenting with new economic models, improving customer experience and enhancing last-mile delivery of products and services, not to mention driving new sustainable and inclusive service models.
The network we have established over the past six decades has been built on one essential premise: partnerships. Even today, this tenet stands unchallenged. We welcome all players in the market, as it fosters innovation and drives the entire industry forward. In fact, we are proactively seeking collaborations with the most promising fintech firms to empower them to reach their full potential.
For example, we have entered a strategic partnership with Pluto, a leading provider of corporate spend management solutions in the UAE, to fuel the growth of business-to-business (B2B) payments across the GCC.
We also have a long history of supporting startups through initiatives like Start Path, providing later-stage fintech startups with access to our wide portfolio. To date, the award-winning program has helped over 400 startups from 54 countries secure more than $25 billion in post-program capital.
How is Mastercard empowering SMEs in the UAE to reap the full benefits of the digital economy?
With its enabling legislation and ease of doing business, the UAE provides an ideal environment for SMEs to set up, build and scale. At Mastercard, we are committed to driving the growth of the country’s thriving SME ecosystem as part of our global goal to bring 50 million micro, small and medium enterprises (MSMEs) worldwide into the digital economy by 2025. I’m proud to share that we recently achieved our target one year before the deadline.
We do this by providing SMEs with the tools they need to pay and get paid quickly and securely, expand their reach and deliver a seamless experience for their customers. To support our objectives in the UAE, we partnered with Abu Dhabi Global Market (ADGM) to digitalize SME payment flows. In addition, we joined forces with 4thWave, an innovative finance and Banking-as-a-Service (BaaS) digital platform provider, to streamline B2B payment flows. We teamed up with the fintech firm Fundbot to introduce a payment platform that seamlessly links buyers and suppliers.
We also collaborated with Aramex and the UAE Ministry of Economy’s The Entrepreneurial Nation to launch the ScaleUp platform, which aims to support SME growth in the UAE. ScaleUp presents an exciting opportunity for startups and SMEs to pitch innovative ideas for a chance to win AED250,000, meet with angel investors and gain several other benefits.
Furthermore, we are equipping small businesses with the knowledge and capabilities that empower them to go digital and grow digital. In this context, we curated The Entrepreneur’s Odyssey specifically for the MSME community. This first-of-its-kind digital education platform brings together a range of world-class academic and business resources to help small enterprises learn and thrive.
What are your expectations for the growth of travel spend in GCC countries and the UAE in particular?
Over the past year, travel spending in the GCC increased by 15 percent, and we anticipate a similar growth trajectory in the coming years, as the region remains a popular destination for business and leisure travelers.
Data by the World Travel & Tourism Council (WTTC) shows that 2023 was a record-breaking year for travel and tourism in the UAE. The sector grew by 26 percent year-on-year and contributed AED220 billion to the country’s GDP, representing 11.7 percent of the entire economy. According to our Travel Trends 2024 report, the UAE is among the top 10 trending tourist destinations worldwide. Dubai alone attracted more than 17 million international visitors last year, surpassing pre-pandemic levels. The study was developed by Mastercard Economics Institute, whose team of economists, analysts and data scientists draws on Mastercard insights and third-party data to deliver regular reporting on the latest macroeconomic trends for key customers, partners and policymakers.
At Mastercard, we are committed to providing seamless and secure payment solutions to support this growth and enhance consumers’ travel experiences. For example, we launched the Emirates NBD Marriott Bonvoy Mastercard World Elite card with premium benefits for people passionate about travel.
UAE consumers are rapidly adopting new payment methods. How do you view these new payment solutions at Mastercard, and how will they contribute to the UAE’s goal of becoming a cashless economy?
The UAE is witnessing a boom in digital payments. The latest data by Checkout.com reveals a 26 percent year-on-year rise in the number of unique cards used for online purchases in the UAE in July and August 2024. Meanwhile, the use of buy-now-pay-later (BNPL) solutions skyrocketed by 200 percent over the same period.
At Mastercard, we are at the forefront of driving the adoption of new payment methods. We firmly believe that payment digitization provides a robust economic foundation to address the wide range of challenges associated with cash. Financial inclusion is one of its greatest benefits. Bringing unbanked and underbanked people into the formal financial system vastly improves livelihoods, enhances ease of doing business, and boosts financial literacy. People and companies can also enjoy a greater choice of payment methods and easy ways to access their funds or obtain credit.
We are 100 percent behind the UAE’s shift away from cash. Our innovative solutions, such as biometric checkout programs and digital wallets, contribute to positioning the country as a global digital payment hub by providing seamless, secure and convenient payment experiences.
How is Islamic finance making use of innovations, such as digitization and AI?
Islamic finance is leveraging innovations to enhance its offerings and meet the evolving requirements of consumers. At Mastercard, we pride ourselves on launching locally relevant products and solutions that focus on the needs of each market. Islamic finance is a great example of how we innovate and collaborate to build robust and inclusive payment ecosystems.
We ensure compliance of our solutions with Islamic principles while driving financial inclusion and digital transformation in the region. Our partnerships with Islamic financial institutions have resulted in the development of several Sharia-compliant digital payment solutions. For example, in the UAE, we joined forces with Dubai Islamic Bank (DIB) to introduce cross-border payment services for peer-to-peer (P2P) and B2B transfers, enabling real-time digital remittances across 40+ countries.
We are also collaborating with our partners to form a new Islamic Council, bringing together a community of experts and practitioners to exchange ideas, shape ethical standards and highlight best practices for the future of Islamic banking.
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