The mechanisation of public sector wages will benefit the Egyptian economy if electronic cardholders use cards in their direct purchases, said Tarek Mahfouz, Egypt’s director of Visa Inc.
Mahfouz said, in a Visa session organised by Al-Ahram Regional Institute for Journalism (AHRIJ), that the existence of public wages in the banking system will help stimulate the economy “even if the cash stayed for few days”.
The Egyptian government, represented by Prime Minister Ibrahim Mehleb and Minister of Planning Ashraf El-Araby, have decided the automation of salaries of public employees will start from 30 June.
The move is considered to be a step to engage more people into the Egyptian banking system, as the service will be offered to 6.5 million public employees.
The Ministry of Finance held several meetings in early May with several banks regarding the mechanisation, most prominently the National Bank of Egypt (NBE) and the Housing and Development Bank.
A total of 11 banks, including Piraeus Bank and the Commercial International Bank (CIB), have contracted with E-Finance Company to mechanise public sector salaries. This will increase their customer base in this category, according to E-Finance’s head of Business Development and Sales Ahmed Abou El-Dahab.
Abou El-Dahab said, earlier in May, that the NBE is occupying the largest portion in this project, followed by Banque Misr, the Housing and Development Bank, the Arab Banking Corporation and the Arab African International Bank.
Only 6-8 million individuals are customers in the Egyptian banking sector, according to NBE Chairman Hisham Okasha.
The Middle East and North Africa region (MENA) has recorded the highest total volume of Visa prepaid card usage, with Egypt registering 10% penetration. This is compared to 60% in the UAE, Visa MENA director of prepaid products Sumit Tyagi said in September.
There are 12 million credit cards in Egypt, but approximately 33 million mobile phone customers do not use any method of electronic payment. This creates an opportunity for bankers to convince people to use mobile phones in payment process.