Dubai: The payments service provider Network International expects Middle East consumer spending to go through a “gradual” recovery in the next six months. But international spending will continue to lag.
This mix of spending patterns will eat into revenues for the second-half, and reflect in a revenue drop of 17-20 per cent.
"In the UAE, as we have stated previously, we expect interchange fees to be regulated, which represents the largest cost for the merchant," the company said in the statement. "This would have very little impact on our business, as it is typically a pass -through cost. There has been no formal update on the prior announcement from the Central Bank."
As for other Gulf markets, the “intention [is] to move forward with expansion in Saudi Arabia,”, through on the ground data centre deployment as soon as its “practical to do so”.
Saudi Arabia "could" become its second largest market over time. Expansion there will require capital investments of $25 million over an 18-24 month period. "Our decisions announced first-quarter, to pause on capital expenditure related to the separation of shared services with Emirates NBD, and defer the ordinary dividend payment in respect of the 2019 financial year, remain in place," the statement added.
The Dubai firm sees its first-half numbers remain broadly flat at about $133 million to $134 million in revenues, in fresh guidance issued to investors. Its shares are listed on London Stock Exchange.
And down the line, there will be opportunities to make full use of the digital transition. The cash-to-digital move “remains in high growth across our markets”, the company added.
Simon Haslam, CEO, said: “We have enabled online payments for a large number of merchants through our proprietary N-Genius gateway, and have a strong pipeline of demand. Whilst COVID-19 is causing some short-term disruption, we are fortunate to be operating in high growth and fragmented digital payments markets, where we are seeing signs of an acceleration in underlying trends and the long term opportunity remains significant.
“As the only independent payments processor of scale across our regions, we are best positioned to capitalise on these opportunities, which means we continue to pursue new customers, continue discussions with banks in regard to outsourcing, and scan the market for selective acquisition opportunities.”