1st credit card issued in Yemen [Archives:2005/815/Front Page]
By Peter Willems
Yemen Times Staff
The International Bank of Yemen (IBY) has added more products and services for its customers as it continues to lead the development of retail banking in the local banking sector.
This week, IBY launched a Visa card which the bank claims to be the first real credit card available in Yemen. Until now, financial institutions have been offering debit cards, but with IBY's Visa card, customers can pay what is owed with small monthly payments.
“The Visa card we are issuing is actually the first credit card in Yemen,” said Ahmed Nagi, Head of Card Center at IBY. “Instead of a debit or charge card other banks are issuing, this is a real credit card that carries with it all the unique features that will give our customers many advantages.”
IBY has also become a Principal Member of Visa, now responsible for issuing cards for other banks operating in Yemen instead of using other banks abroad, such as in Bahrain.
“Along with us being the first to issue Visa cards here in Yemen instead of having to have cards sent from other countries, we are now the Principal Member of Visa so that other banks can issue new cards locally through IBY,” said Ahmed Al-Absi, IBY's General Manager.
With the Visa credit card, IBY offers Visa Electron, a debit card that is recognized worldwide, IBY is expecting to see a large increase in business in the near future resulting from connecting Yemen to the rest of the world. Yemeni cardholders will be able to use credit cards and Electron at the bank's ATMs and businesses using the point-of-sale strategy implemented in Yemen by IBY and in foreign countries. Tourists and foreigners living in Yemen will also be able to use their Visas in the local market.
“We are currently connecting our ATMs and points-of-sale to the international Visa network. Anyone from all over the world can use them here in Yemen, and those who get Visas at IBY can use them all over the world to get cash and make purchases,” said Nagi.
Also in the making is IBY to become a Principal Member of another leading credit card company, MasterCard. According to Al-Absi, the deal should be finalized within the next six weeks.
IBY was the first local bank to allow customers to make purchases at retail outlets using plastic instead of cash. Since the point-of-sale operation was established last June, up to 350 businesses have joined. With the bank's new relationship with Visa and MasterCard, it expects the number of point-of-sale locations to increase dramatically. Nagi said that the number of businesses taking part will jump to 1,000 in the next six months.
For IBY to stay out front in retail banking, it has established a research and development department to continuously bring out something new for its customers. Al-Absi said that the department is currently working on 60 new products. One example is for Yemeni-American citizens that have retired in Yemen to soon receive their social security funds by having it sent to their IBY accounts instead of having to travel to the US Embassy in Sana'a.
“Those who have retired in Yemen will no longer have to take a trip to the US Embassy to pick up the check and deposit it in a bank,” said Al-Absi. “The money will be credited online at IBY, and the customer will be able to simply go to an ATM, in let's say Rada or Taiz, and get the money.”
IBY has been aggressive in expanding on ATMs nationwide. It now has 30 ATMs standing in many of the country's governorates – the largest number of ATMs held by a bank in Yemen – and aims to have 100 by the end of the year. For the convenience of wiring money, the bank plans to increase its Western Union outlets from 80 to 200 to reach more customers by next June.
IBY's retail strategy has shown strong results. Its fee based income out of total income jumped from 15% in 2003 to 60% last year. The bank's gross profits doubled: From $900 million in 2003 to $1.8 billion in 2004.
“Retail banking is the future of the banking industry,” said Al-Absi. “Banks around the world have focused and capitalized on retail banking in recent years. We have to take the necessary steps to be the leader of retail banking and modernize the banking sector in Yemen.”