Prepaid card market set for expansion in Bahrain
Manama, July 3, 2013
The prepaid card market, fuelled by a preference for Islamic banking, is growing rapidly in Bahrain, a report said, adding that it is expected to see a compounded annual growth rate of 17.27 per cent by 2017.
Domestic card issuers, offering Sharia-compliant cards, are expected to lead the payments channel up to 2017, according to a new report by Timetric, reported the Gulf Daily News, our sister publication.
Islamic banking refers to a system of banking consistent with Sharia.
Prepaid cards are gaining popularity in Bahrain as they are compliant with Islamic principles.
Domestic banks are more popular than international ones due to their ability to offer Sharia-compliant products.
This makes them the preferred choice of payment channel in Bahrain despite international competition. Marketing efforts and product innovation help domestic banks maintain their dominance in the industry. The principle of interest-free banking is a barrier for credit card companies in Islamic countries.
Banks in Bahrain have responded to this issue by creating credit cards based on Sharia standards. Ithmaar Bank offers the Sharia-compliant Al Rubban credit card, which has all the features of a conventional credit card.
Instead of charging interest, the bank earns income through card maintenance fees. According to Timetric, a growing number of banks are expected to launch Sharia-compliant cards by 2017. – TradeArabia News Service