ID card to spur financial inclusion in UAE [Gulf News (United Arab Emirates)]
(Gulf News (United Arab Emirates) Via Acquire Media NewsEdge) Dubai
Enabling the national ID card issued by the Emirates Identity Authority as a tool to withdraw cash and make payments will not only offer convenience to UAE residents, it will also spur financial inclusion in the country, a top official said yesterday.
The Arab states, including the UAE, are home to a significant number of unbanked residents. As of 2011, only a small proportion, 18 per cent, of the population in the Middle East and North Africa were using financial services. In the UAE, the majority, or 60 per cent, did not have a bank account.
The Emirates Identity Authority has recently tied up with Al Hilal Bank to test the capability of the national ID card as a financial tool. Dr Ali Al Khouri, director general of the Emirates Identity Authority, said several other banks in the UAE have also expressed interest in rolling out the service to their customers.
He said the scheme will definitely encourage low-income residents, especially the unbanked blue-collar workers in the country to use the financial services. He also sees the national ID being linked to the Wages Protection System (WPS), a digital salary transfer system that allows the payment of workers' salaries through banks or exchange bureaus.
It is not clear when every legal resident in the UAE will eventually use their ID card for ATM and retail transactions, but Al Khouri said the wide adoption of the technology will largely depend on the banks. To enable banking customers to use their ID card for withdrawals, banks need to replace or upgrade their ATM machines.
"The Emirates Identity Authority has invested in setting up an infrastructure for the past six or seven years. Today, the ball is in the court of the service providers. It's very much dependent on themselves," Al Khouri told reporters on the sidelines of the Cards and Payments Middle East show.
"The pilot is going on and will continue until the end of this year. In 2015, or towards the end of this year, we are going to see more and more applications," he added.
The UAE is not the first country to integrate a government-issued ID card into the financial services industry. In Nigeria, the National Identity Management Commission has introduced 13 million multipurpose, MasterCard branded national identity smart cards. In the first phase of the programme, the smart cards will have 13 applications, including a prepaid payment technology.
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