DUBAI: Financial institutions and merchants in the UAE and Saudi Arabia are falling behind when it comes to meeting the needs of millennials, who are frustrated by the online user experience in the region, according to a new report by payments technology company Visa.
Millennials in the region are higher spenders than their global peers. In the UAE, they are expected to generate $40,000 (Dh146,800) in average annual gross income by 2019, according to Visa’s ‘Understanding the millennial mindset and what it means for payments in the GCC’ report, which interviewed more than 1,000 millennials (aged between 18 and 34) and non-millennials in the UAE and Saudi Arabia.
Millennials in the region are also tech-savvy and are actively online between 4.5 and 6.5 hours a day. Credit cards are now the preferred way to pay for online purchases across major categories in the UAE, the report said.
More than 50 per cent of millennials in the UAE and Saudi Arabia prefer to bank digitally, but they are frustrated by the user experience. Some of the service gaps in the UAE that Visa has identified in the report include the inability to monitor card transactions, payment alerts and a lack of personalisation.
“Millennials will continue to drive the trend towards increased card usage over the medium-term, and Visa predicts that by 2018, credit cards will account for 65 per cent of non-cash retail payment volumes by all UAE residents, while in Saudi Arabia, debit cards will account for more than 70 per cent,” Visa said in a statement.
Millennials in the UAE are also dissatisfied with their travel miles and cash back offerings, according to the report.
Visa said that merchants, banks and issuers should adapt to millennials’ changing preferences by adopting a business model focusing on personalised services, creating an interactive digital community centred around the brand, integrating customer experience across various touch points and accurately target consumers with communication.
