Best Credit Cards on the MarketThe best credit cards on the market
Cards have long been an important instrument for credit institutes competing for market shares in Bahrain's highly competetive bank industry, and from a consumers point of view there has never been so much variety in the domestic market, with both traditional and Muslim credit optioning. Bahrain's main domestic and international credit card companies, such as American Express and Credimax, provide credit cards for Bahrainians.
The majority of issuing banks have more than one credit cards available, with the Arab Bank, Citibank and the National Bank of Bahrain (NBB) each offering the broadest choice of three different cards, from traditional entrance cards to premiums. In recent years, intensive rivalry in the credit cards sector has led to a considerable decline in the initial demands placed on the lending side and is the reason for the spread of a variety of interest rate terms.
For example, starting from zero for entry-level cards, minimal pay levels range up to BD3000 ($7903) for Ahli United Bank (AUB) and NBB platform cards. Annuities are usually low; in fact, the NBB does not levy a commission on any of its offers, and BD35 ($92) is a standard commission for an entrance or middle ticket from other suppliers.
There is a broad variety of interest rate options on the market for traditional cards, ranging from 0.88% on the Standard Chartered Visa Classic to the 3% on the AUB Standard Cards. However, Sharia-compliant cards often charge higher charges to compensate for the zero interest rate offered. In addition to the competition for pay, annuities and interest rate compensation, Bahrain's credit cards publishers have launched other innovative products to capture market shares.
Bahrain's first co-branded map came in late 2012, when Gulf Air, the airline's domestic airline, worked with Standard Chartered to create Standard Chartered frequent flyer credit cards. These new cards were available in three variations (blue, silvery and gold) and enabled clients to transform their daily bank operations, as well as bank accounts, into flying awards at a two to six Falconflyer mile per BD3 ($7.90) rating.
Clients were awarded 1200 to 2400 mileage when registering or updating their cards. In 2014 the Asian Banker received the "Best CreditCard in the Middle East" and in 2015 the "Most Improved Payment Card " at the Smart card and Payments Awards in Dubai.
As a result, other map publishers in Bahrain have chosen the path of co-branding. Most notably, Citibank Bahrain, which has its Bahrain based headquarters and works with Emirates Airlines to provide two different products: the Ultimate Visa, which gives all credit holders easy laptop room at more than 70 international destinations, regardless of ticketing category or carrier selection; and a standardized co-branding service that awards Skywards Miles to those who use the cards.
Despite the seemingly vivid revolutions in Bahrain's bank sectors, however, cardholder utilization is still relatively low by region, indicating that there is much scope for emitters to develop their credit-chart departments in the years ahead. The information solution provider TimeRic recorded sound economic expansion in the Bahraini credit cards and settlement industries between 2009 and 2013, with the number of cards in use ( incl. credit and debit cards ) increasing from 830,360 to 1 million during the reporting year, corresponding to an average of 5.49% per annum increase (CAGR).
Bahrain's credit card transaction value also increased significantly during this period, rising by a 17.37% to BD1 based on AAGR. 1 billion ($2.9bn) in 2013. Within the broader picture of payments cards nevertheless have a relatively minor impact despite increasing popularity: between 2009 and 2013 the proportion of cards in the overall payments system increased from 0.4% to 0.6%, with credit transfer and check transfer still dominating the market with 99.4%.
While much of this payments will certainly stay outside the range of the retailing credit cards sector, Bahrain's relatively low map permeation rates in comparison to other countries illustrate the significant growth in the use of cards in the Kingdom: in 2013 Bahrain had 0.80 cards per capita against 1.96 in the UAE, 1.32 in Kuwait and 1.03 in Oman.
Bahrain registered 15th place in Bahrain in respect of usage frequencies. In 2013, there were 6 operations per ticket, while Kuwait had 47. There are a number of contributing drivers to support the credit market's outlook for Bahrain's credit market expansion. Increased confidence in credit cards as a safe means of payments is an important engine of economic development as the domestic market reacted to increased credit scams in the early 2000s, which began to jeopardize their ability to survive.
To prevent this, the Central Bank of Bahrain (CBB) has pushed through the acceptance of the all-in-one Europay, MasterCard and Visa (EMV) protocols, which set improved safety levels and conformity requirements. Thus the Bahrain bank has concluded the legally required process of migrating its credit cards from the conventional magnet stripe to the much safer EMV chips.
The gradual introduction of this system is reflected in the reduced number of cards frauded in the Member State and has proven to be a useful instrument for promotion. Also, the involvement of the CB in the introduction of credit cards has expanded to include awareness-raising activities, which were particularly important in the early phase of credit marketig. The information provided by the regulatory authority included the advantages of credit cards, the comparison of credit cards charges and the most efficient protection against credit cards frauds.
Higher web spend is another important driving force for credit use in Bahrain. Bahrain is part of a booming region in e-commerce thanks to the country's 96% web reach, which, according to Frost & Sullivan, a consultancy and market research company, will grow by 40% by 2020 compared to 2015 when it comes to the volume of goods and service for GCC citizens via the intranet.
The growing use of smartphones, a young and technically skilled workforce and a growing choice of on-line shopping opportunities at home, regionally and globally are the main drivers supporting this development (see Telecommunications and IT chapter). Whilst e-commerce between businesses and consumers will be an important driving force for the increase in credit cards use, governments and consumers will also have an important impact on the expected rate of inflation.
Bahrain's economic expansion is fuelled by the emergence of e-government, a process that in recent years has become a cause of great concern for the Bahrain state. Bahrain has become a regional e-government leader as a direct outcome of these joint efforts, taking first place in the GCC and third place in the Asia rating in the 2010 UN Global e-government Survey.
Many Bahrainis have now adopted on-line payment of federal charges and credit cards as standards, and further investments in the e-government projects indicate that it will continue to be an important driving force for further expansion of credit use.