Across the Asia/Pacific, Middle East and Africa (APMEA) region, one area that MasterCard is expanding boundaries is in the field of Islamic banking. Estimates from Ernst & Young in their latest World Islamic Banking Competitiveness Report show that Islamic banking assets topped US$1.7 Trillion in 2013. Islamic Banking is an important segment of focus across the world and is gaining increased attention across many markets in South East Asia and not only in Islamic countries such as Brunei, Indonesia and Malaysia but also Singapore which recently hosted the sixth World Islamic Banking Conference.
Being extremely relevant to the populations at large, as well as to the financial services industry serving these markets, MasterCard is committed to helping develop a comprehensive range of innovative Shariah-compliant payment products and solutions, to help Islamic consumers and businesses manage their finances safely and securely, both domestically and overseas. There is significant interest in serving this important market, and this is why we have invested in specialist expertise from the financial sector, hiring people with deep experience in Islamic banking. This helps us ensure that we’ve got the right people on our team who understand the needs of this market, and who ensure we are building propositions that are relevant to their needs.
It could be from something as simple as enabling Bahasa Indonesia as an option on ATM screens in Saudi Arabia, to ensuring that pilgrims from rural areas of Indonesia travelling to Saudi Arabia for Hajj can be more comfortable using the ATM in their own language and gain access to the safety, security and convenience of the global MasterCard ATM network, rather than carry cash for this very important personal event. Indonesia already imports 40-foot containers filled with Saudi riyal to distribute travel allowances to the 200,000 Indonesian pilgrims who make up the largest foreign Hajj migrant population each year. Of course, carrying cash has many downsides: it takes time to access, is riskier to carry, and involves costs including production, transportation, handling, and security. Simply providing a card or at the least ATM access also significantly reduces the costs for the government and its banks who support the process.
In Malaysia this week, MasterCard and Lembaga Tabung Haji, the hajj pilgrims fund board which facilitates savings for the pilgrimage to Mecca, unveiled the world’s first non-banking Islamic debit card. The Tabung Haji Debit-i MasterCard allows Malaysian Muslims to enjoy the convenience of a globally accepted MasterCard Debit card, whilst giving them access to their Tabung Haji accounts whether at home in Malaysia, travelling to Mecca or Medina as part of the Hajj or Umrah, or in other locations. This is indeed a huge opportunity area. And by delivering access to funds on a Debit card, MasterCard is helping Tabung Haji make this important life event less worrisome for their Malaysian customers.
Supporting the interests of Islamic migrant workers is also important, and so MasterCard is working with a number of Islamic financial organizations to offer payroll cards to these workers. This not only gives them greater control over their finances but can help give access to lower cost remittance services using MasterCard’s MoneySend platform, important when reducing the costs of sending money home, and has a direct and material impact on the quality of life of the family they are supporting back home.
MasterCard is committed to expanding financial inclusion for greater prosperity across all segments of society and to accelerate the global migration to electronic payments. There are many, varied opportunities for Islamic finance in this part of the world, and it’s something we’re looking to develop specific products for, in the future. It’s a critically important initiative for the company.
What do you think can be done to support the growth of Islamic banking in your market?
- Read a press release about the first reloadable Hajj prepaid card in Bangladesh.