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Debit cards in demand as financial crisis bites.

MANAMA: People all over the world are migrating from credit to debit cards to avoid the serious implications of the economic crunch, an expert said yesterday.

Economic Development Board international business development director Trevor Stokes said part of the reason was a money crunch among those who use credit cards and others.

"The global crisis we have been witnessing over the last more than a year has made more people default on credit card payments and debts have piled up."

Mr Stokes was speaking on the opening day of the First GCC Cards Summit at the Ritz-Carlton Bahrain, Hotel and Spa.

The event, organised by MTI Consulting and Veritas Investments, is being attended by experts in the cards business who are discussing and identifying future strategies for the regional cards industry.

Mr Stokes said there has overall been a 10 per cent decline in transactions and that has led to people switching over to debit cards.

"Market surveys tell us that 20 per cent of the credit card segment gives the industry 85 per cent of the profit and that is true in Bahrain as well."

He said the downturn has also resulted in several changes in strategy planning in Bahrain and the rest of the world.

"The malaise and disease that has gripped the world is, however, slowly making way for a healthy rebound."

Earlier, the summit was opened by MTI Consulting chief executive officer Hilmy Cader.

He said due to the economic downturn the flavour of the year has been the restriction of credit facilities, reduced card acquisition, lower consumer spend, greater focus on risk and governance reputation management and cost containment.

"Very few players in the region spent heavily on marketing campaigns and the ultimate aim is to protect the premium card customers who deliver the majority of profit."

Veritas Investments executive director Premal Patel said the summit has brought together industry thought leaders to discuss, debate and develop key topical issues the sector is facing.

"With a new paradigm upon the horizon, there could be no better time for Bahrain to host the first GCC Cards Summit in which industry leaders in the debit, credit, charge, prepaid, store and loyalty card services will meet to discuss a wide array of strategic topics that address impact to bottom line performance of card businesses."

He said the summit will act as an ideal platform for industry experts to reshape their business strategies, take away practical business solutions and vastly improve return on their marketing investments next year.

The highlights of the summit, which concludes today, include master-class sessions with experts in the field of sales and service, risk management and reputation management.

Copyright 2009 Gulf Daily News

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Publication:Gulf Daily News (Manama, Bahrain)
Date:Oct 22, 2009
Words:457
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