GN Focus | Credit, Debit and Loyalty Cards

Soaring beyond free tickets

Credit cards providers in the UAE are moving past traditional frequent flier programmes to offer value-added services on travel-related products, including discounts on holiday packages, duty-free rewards and insurance

  • By Shalini Seth Specialist Writer
  • Published: 00:00 November 29, 2012
  • GN Focus

  • Image Credit:

That the UAE consumer travels is not news. According to a MasterCard survey released late last year, 70 per cent of consumers said they plan to travel for leisure in coming months. While most card companies and loyalty programmes find that a travel-related reward programme is a must in their portfolio, they are also keen to differentiate the offering by customising it to preferences.

“When it comes to most economies, 70 per cent of their people will not travel in the next few months. To that extent, the UAE is unique,” Raghu Malhotra, Division President, Middle East and North Africa, MasterCard Worldwide, tells GN Focus at the launch of the company’s latest product, the Emirates NBD dnata World MasterCard Credit Card. “In a market like the UAE different products that have travel-related benefits will exist. The consumer can graduate from one to the next. Various segments gravitate to what they want.”

“We want to move away from mass benefit or segmented products to truly customised ones. We want to transform our loyalty programme from a segment-based to an individual-based programme”

Rasool Hujair, CEO, Majid Al Futtaim Finance

Not only do consumers travel, prelaunch research by card majors suggests that they prefer travel-related rewards over, say, cash benefits or entertainment-related points.

Rasool Hujair, CEO, Majid Al Futtaim (MAF) Finance, says, “When we studied the market, it was clear that when it comes to loyalty, consumers would prefer travel. So air tickets come ahead by a mile. Second were things that make travelling more comfortable, such as lounge access — consumers want to be looked after. The third was dining.”

Travel is certainly important and a quick scan of the credit card offering will reveal that almost all companies have products that cater to this demand. The differentiator is now the detail. No longer is the consumer satisfied by a free ticket offered conditionally.

“We found that people like to travel for free, but they want it to be convenient. They want to use the free miles when they want to use them and not when we tell them when to use them,” says Hujair, talking about MAF’s Najm Platinum Visa credit card and PremiumRewards loyalty programme which comes with real-time redemption of travel rewards anytime, from anywhere, on any route and without blackout dates.

In a premium travel segment, Dubai First’s high-value Skyy Miles card comes topped up with enough miles to take the traveller to New York and back. The card company acts as a bulk buyer for tickets, which means that the consumer is free to use up the airline’s miles in addition to what is topped up on the card, even as they get additional reward points for using it.

While there is room for cards that are affiliated to one airline, more and more companies are acting as travel agents by creating a booking engine on their site. And many are launching more than one product.

“Our Emirates NBD Skywards card is for consumers who travel by one airline. Our new card is for customers who want choices — they may want to travel by various airlines, budget or premium. You have a choice of 130 airlines with dnata,” Suvo Sarkar, General Manager, Retail Banking, Emirates NBD, tells 
GN Focus.

Other single airline cards include Mashreq and Air Arabia, which have offered a loyalty card since 2009. Among other benefits, the cardholders get 10 per cent off on many items at Sharjah Duty Free, along with a complimentary Priority Pass card with access to more than 600 airport lounges worldwide across 300 cities. They can use the rewards to buy tickets to any of the airline’s 65 destinations across the Middle East, North Africa, Asia and Europe.

The UAE also has consumers across all segments choosing to travel by air, whether or not they have credit cards. With high internet penetration, shopping online for air tickets is prevalent and encouraged, which is where prepaid cards come in.

“We do see that as a trend simply because large parts of this population might not be credit worthy yet. Those who do not fit into this segment are excluded, so a prepaid caters to those people, for instance, the 18- or 20-year-olds who need to access services. The world is moving online. There is only one way you can shop online — you need a product,” says Malhotra, speaking of MasterCard’s DXB Connect, the world’s first airport prepaid card, launched at Dubai International Airport in November last year.

Eugene Barry, Senior Vice- President, Commercial, Dubai Airports, says that DXB Connect is accepted easily among travellers from the subcontinent where prepaid is more prevalent. It comes with an Etisalat SIM card, discounts at duty-free stores, hotel stays, spas, F&B outlets and family entertainment venues, both inside and outside the airport.

Another example of a prepaid product that targets those without credit cards is the partnership between cashU, an online payment provider, and Kuwait-based airline Jazeera Airways. Samar Mushainesh, Head of cashU Prepaid and cashU Direct, says that the company is in talks with more regional carriers. “The response has been very good; introducing cashU as an alternative payment option to Jazeera Airways customers who don’t have access to credit cards or don’t wish to use it online have reduced the number of last-minute abandoned sales,” she says.

Most cards offer more than just a ticket. Bundled offerings include duty-free rewards, points for shopping internationally, lounge access and insurance. “Apart from this, we have a year-long travel programme — from discounts on flights and up to 25 per cent off on more than 50 holiday packages, to options to convert travel bookings into easy monthly instalments at zero per cent interest,” says Nimish Dwivedi, Head of Payments, Mashreq.

Going forward, the products are likely to be fine-tuned. Barry says, “We are always looking to improve the programme. We have recently completed a significant upgrade to the services available on the card. Other improvements since the launch have included the online reload facility and no-cost card-to-card transfer, as well as the single card product for passengers who do not require an Etisalat SIM card.”

Fact Box

Know your customer is a mantra taken very seriously these days. Rasool Hujair (below), CEO, Majid Al Futtaim (MAF) Finance, says, “The biggest area we are investing in is understanding customer behaviour. There is technology to enable this so we know not only where they shop but exactly what they are buying. Then we understand exactly what they value. We want to move away from mass benefit or segmented products to truly customised ones. We want to transform our loyalty programme from a segment-based to an individual-based programme. If we manage to do that we will always keep up with the changing lifestyle of the consumer. That is the next big thing.

“There are other sides to this. One is the information we are trying to get via technology from the merchant. That is a lot of data and there are ownership issues. Analysing it to create benefits that are unique is also a function of technology. And then we track how the consumer will take advantage of it. That loop is self-feeding and will continue to become more relevant.

“The crisis forced the consumer to be much more intelligent. People look at how they spend, their pension, their savings. The consumer became more savvy in the way they spend their money. They shop around and look for benefits,” he says.

Issuers find data collected from card use helpful in planning and strategising. At London’s Heathrow airport, for instance, data collected each time passengers use a BAA WorldPoints loyalty card (360,000), comes in handy in strategic commercial decisions or while keeping passengers updated of relevant developments.

At Dubai Airport too, says Eugene Barry, Senior Vice-President, Commercial, Dubai Airports, “Data mining has allowed us to customise and streamline our 2013 initiatives. The data is commercially sensitive. It is also important that our cardholders are assured of the strictest standards in data privacy when it comes to protecting their personal information.

According to a 2011 research by the United Nations World Tourism Organisation, on average, a UAE resident spends about $22,000 (Dh80,806) a year on flights and accommodation alone, totalling $6.6 billion annually on outbound travel. Further, a study unveiled at Arabian Travel Market in 2012 revealed that UAE nationals are the second-most frequent travellers in the GCC (following Saudi nationals), with 53 per cent travelling to between two and five countries in a year.

— S.S.

GN Focus