Escolar Documentos
Profissional Documentos
Cultura Documentos
Table of contents
1- Background ............................. 5
Objective .............. 5
Relevance ............ 6
2- Introduction: Study approach & methodology ...... 6
3- Study limitations .......... 8
4- Executive Summary ....................................... 10
5- International trends in e-banking ....... 12
5.1 General definition of E-Banking services ..................... 12
5.2 International Developments in E-banking Business Models .........................12
5.3 Focus on E-banking in Sweden: trends in mature markets ..................... 13
5.4 Growth potential and track record in comparable markets ...........................14
6- Palestinian Banking sector, current situation, facts and figures ............ 15
7- Critical success factors in e-banking industry: demographics & industry life cycle in Palestine ......................... 21
8. Implications on Investments in Expanded Electronic banking services .......... 25
Market Insight on Current e-banking Services
9- Retail e-banking services in Palestine ........ 28
9.1 Retail e- banking user profiles (based on the banks reports) ......... 28
1: Background
The Association of Banks in Palestine (ABP) and the Palestine International Business Forum (PIBF) have endeavored since 2007 to
facilitate the spread of e-banking services within the Palestinian Banking industry. As part ABPs vision to develop the banking industry
in Palestine and in relation to PIBFs long-term aim to enable private sector efforts toward economic sustainability in Palestine, a successful partnership has been created between the two organizations under a common objective due to both PIBF and ABP recognition
of banking industrys strategic relevance in mobilizing growth in other key industries.
Toward that end, PIBF and ABP have successfully completed the 1st stage of the project which revealed the availability of the needed
technical infrastructure in Palestine to deliver key electronic banking services of; ATM/EFTPOS, credit cards and on-line banking payments. The study was completed in December 2007.
The study concluded that a transformation into a national solution could and should be done in Palestine and proposed two possible
options; one being in-house solutions and two is an external service solution. While the study did not present extensive arguments for
either option since much of the decision is reliant on the size of demand and market potential while a second variable closely involves
the intents of specific interested parties willing to invest; both variables were not part of the scope of the 1st phase of the study.
In the first phase of the study, the study team put forth a recommendation to asses market demand for e-banking services in Palestine
which would reveal much needed insight to instigate committed stakeholders toward making investment decisions as such the needed
follow-up by those toward either option. As such, the pursuit of the 2nd phase of this project is to fulfill the recommendation of the study
team and to further the joint mission for ABP through its Board members decision and PIBF through its board members decision.
Objective
The objective of the 2nd phase was to provide relevant information to estimate the Palestinian market size and assess potential market
demand for three specific e-banking services as an indicators; ATMs, EFTPOS, cards and on-line banking.
Toward that end, a specialized team of local and international consultants was contracted to conduct the required demand and supply
analysis for the three key e-banking services in Palestine.
Relevance
Expanded and optimal use of electronic banking services whether through in-house solutions or a national system managed by a local
company linking all participating banks is envisaged to contribute greatly to grow the customer base and frequency of use for e banking
services, enhance the customer trust and satisfaction, and increase the profitability of the banks through optimizing the performed transactions. Benefits of improved e-banking services are seen to have a positive spill over on all segments of society, particularly utilities,
corporate and even individual retail banking clients both local and international in the case of the tourism industry. Cost efficiencies
related to physical handling for banks is an obvious and indisputable benefit while value for banking clients in terms of their own efficiencies in the case of corporate clients is a clear outcome and while retail clients value in terms of convenience and time values cannot
be understated through e-banking services.
The most immediate relevance of the study is imbedded in the ability of its outcomes to provide a concrete set of indicators to expose
the potentials for new investments in the field e-banking services. From this angle, the study is relevant to investors seeking to explore
new and unique areas for their investments in Palestine. Hence this study could be utilized as one of the foundations to build the needed feasibility study and business plan in the future.
Furthermore, the study outcomes are highly relevant to Palestinian banks, particularly to better serve their client base through improved
marketing strategies in line with this demand assessment and market analysis.
Defined the main electronic banking services available in Palestinian banking industry
Estimated the market size in terms of volume and value of the current electronic banking services in Palestine
Defined the driving factors for establishment of an economically viable national banking services system and company
The
Palestinian
Three distinct surveys were conducted to generate quantifiable information needed in relation to market demand, potentials, trends and
preferences and finally current supply by Palestinian banks that will later represent the actual client base for the intermediary banking
Services Company:
1. The first survey was made up of a representative sample of 790 retail banking clients geographically distributed in all banks branches located in West Bank and Gaza Strip. Sample selection for the retail banking clients was based on a sample size enough to ensure statistically
significant coverage for all banks, their clients at their various geographical branches. In order to include most of the clients segments,
the sample size was proportionally distributed on the branches of different banks operating in cities and villages spread out in the center,
north and south of West bank and Gaza Strip. In each branch a systematic random sample of at least 20 clients was interviewed resulting
in 100% response rate.
2. The second survey, a judgment sample of 47 leading Palestinian corporate/commercial segment through direct interviews, response rate
was consequently in practice 100%.
3. The third surveyed 21 Palestinian banks through questionnaires sent by fax and returned by banks, 50% response rate due to possible
multiple reasons.
Finally the quantitative interviews were used to validate outcomes and to address key stakeholders interest and views toward the creation of national system and a banking services intermediary company.
The team conducted this study during the months of January-May of 2009. Details of the study approach and methodology can be
found in Annex 1 titled study approach and methodology.
3. Study limitations
Statistical material for the current demand for e-banking services, specifically based on the current in-house business model can be
considered highly adequate and sufficient for assessing primary current demand and trends and opportunities for e-banking services
by end users of these services, being the retail and to a lesser extent the corporate market segments.
The main limitation of the study relates to assessing the impact of the above opportunity on the main financial indicators for banks and
the proposed new business model. This aspect of the study is partial and complementary in nature to the overall objective. This limitation is a result is due to the status of the current suppliers of these services being the future market for the intermediary banking service
company namely Palestinian banks. Specifically, the low rate of response by Palestinian banks lead the study to make assumptions
and speculations based on international trends and identified opportunities form the retail survey toward the said company only.
It is believed that and due to the end user being the same now and in the future, the above limitation is minimized since it is this segment
who drives growth according to trends in preferences despite the business model of choice to deliver e-banking services. In essence,
the outcome of the end user retail survey is sufficient to be a basis for the identified opportunities in e-banking services which may
come under any type of investment either through the in-house model or intermediary banking services model.
Some critical facts were identified not relevant to this study yet highly relevant to the development Palestinian banking industry:
Identified that the current architecture of the data bases in Palestinian banks does not enable reporting about the aspects of e channels
without getting in a highly complex data retrieval process.
The corporate sample was a judgment sample that was aimed to reflect the perception of big leading companies regarding the e banking
attributes, toward that end, the results are sufficient. The companies were conservative regarding reporting about the size and percentages
of their banks operations, this was expected and accepted while it does not affect the objective of the study.
The utilities companies were also very cautious to respond on the inquiries of the study team. More than 2 months of following up, none of
the utility companies provided information except the Paltel which provided part of the information.
Consequently, the studys data can address the demand potentials and key factors driving growth as it is deemed sufficient to give
clear indications for estimated volume and market opportunities for the defined e-banking services according to statistical indicators
from the retail survey.
4. Executive summary
Electronic banking services in Palestinian are witnessing the start of the growth stage in this industrys life cycle; hence this an appropriate time for the possible transformation to an expanded business model of an intermediary banking Services Company based on
the below expected benefits to the banking industry and banking clients:
Economies of scale in investments, in revenue stream and in operating cost for Palestinian banks
Synergies in intra-banking relations resulting in value added services and effective communication to e-banking service users also for
Palestinian banks
Convenience, low cost and quality and service variety for Palestinian end user.
The nature of the joint company should first hand take care of back office functions in e-banking allowing each bank to develop their
own profile and product packaging. As such, this company is proposed from pure business logic given the sharing operating cost, investments and expensive cost of service development. The products each bank offers their clients will still be their own competitive
advantage/disadvantage irrespective of what a joint company will handle on behalf of respective client banks.
The expected revenue stream from these services is almost guaranteed to increase if managed proactively while as the research
indicated the difference between on-counter handling of transactions and electronic virtual handling is significantly high, as the cost
differences ranges between $1.5 -2 per transaction for on-counter handling versus about 20 cents in case of ATMs transaction, while
few cents for internet based banking services. Transferring towards e banking will have the potential to increase profit margins significantly.
Most importantly the key success indicator in this industry being IT diffusions within society was clearly reflected in our study to be
positive in terms of availability of computers and internet access at home as such ensuring that these services have the necessary
household infrastructure to be strongly anchored now and in the future.
The study team can conclude and based on all indicators reflected in this report, particularly retail trends, satisfactions and factors
influencing use of the key e-banking services demonstrate the increasing consumer awareness, demand and readiness for ex-
10
11
12
Another model for provision of e-banking services is through outsourcing the service from banks to an intermediary banking Services
Company, concerning back office functions, offered to client banks customers. Benefits of this model are built on synergies and
economies of scale through intra-banking relations managed by the host banking Services Company. Given that e-banking services
are the core revenue generating stream for the service company, this model could allow for ensuring maximum economies of scale,
more diversified mix of e-banking services and finally consistent service quality to its clients.
A third model of e-banking services directly services retail banking clients through connecting them directly with commercial channels.
PayPal is such a form of e-banking business model. This model requires a much higher level of consumer/end user awareness in
addition to the commercial infrastructure to service as a platform. Pay Pal model cannot substitute customer need from a perspective
of the services offered through banks yet it is another form of complementary electronic services.
Other variations of business models also exist for different services. For example, in countries such as USA, UK, Germany, France
and Australia a large percentage of ATM machines are not managed by banks, rather by credit unions, building societies and independent deployers. Under this model, all banking customers have access to all ATMs in the country, free of charge except when cash is
withdrawn from special labeled ATMs or from ATMs which are managed by the above non-bank entities. Interestingly, the ATMs business is highly profitable in case of the USA According to the latest General Accounting Office figures, banks make $1.9 billion a year
in surcharges for ATM transactions.
13
Year 2000
Year 2007
1.212.900
2.192.000
Number of checks
2.0
1.0
64
92
256
1.143
4.8
9.8
In a total population of around 8.5 million, Sweden currently has approximately 7.0 million registered Internet bank users according
to Swedish Bankers Association, as some clients have relations to more than one bank the estimated numbers of unique users are
around 4.5 millions, a figure that is expected to increase further.
As a reference it should though be noted that 90 % of all Swedes between the ages of 17-75 uses internet. Internet access in the home
is now around 89%.
The
person to person mobile payments system to allow replacement for cash payments
electronic invoicing
14
Study covered from a customer perspective ATMs, cards and the development of internet banking.
Offering more e-banking services given their ability to invest in the needed equipment and software.
Offering the typical promotional prizes related to holidays, financial prizes, cars, etc.
15
Transformation of the Palestinian banking systems from paper to electronic based transactions has been more pronounced over the
past few years. E-banking services became more familiar and acceptable for individuals and institutional banking clients in Palestine.
More and more customers shifted to using available e-banking services (ATM, visa card, visa electron, internet banking) due to the
time and cost savings involved. ATM was the first electronic channel introduced in the banking industry in Palestine. In recent years,
the overwhelming majority of working banks in Palestine have introduced this service, and client familiarity with, and usage has grown
significantly.
More precisely the initial investment to develop the market awareness and demand for e-banking services has been made hence the
market for these services will only witness the growth stage in the coming years.
In Palestine, the current business model to deliver e-banking services rests on in-house solutions provided individually mainly by large
size banks. There is no national system linking all Palestinian banks within a unified network of inter-banking agreements which will
expedite the development of e-channels to include ATMs, commercial points of sale and utilities payments as such ultimately efficient
and optimal e-banking services to the end user. Worth noting is that the current IT infra structure in the banks is sufficient to enable
the implementation of all routine e-banking transactions on line such as account transfers, balance inquiries, bill payments, and Stop
payment requests.
The total deposits in the Palestinian banking sector in 2008 are 5,846,878,805 as shown in the following table:
Bank Accounts
Number
Value in US$
Current accounts
895,030
2,059,060,724
Savings accounts
974,549
1,389,586,725
Term deposits
183,669
2,398,231,356
Total
2,053,248
5,846,878,805
16
almost all of the banks deal with various numbers of e-banking services. The banks that provide these services widely vary in terms
of volume and value of transactions generated through these services. Generally, ATMs are the most well known and widely used by
salaried employees, and most of the banks either already ATMs, or are under establishment phase.
The total number of different type of cards is summarized in the following table according to the PMA:
Type of the card
62,180
18,017
Debit cards
233,795
The summary of the volume/value on e-banking services that is reported from Palestinian Monitory Authority (PMA) is shown in the
following table:
E-Service type
Number of movement
T. Value in US$
ATMs cards
3,515,116
909,792,821
Credit cards
140,295
28,162,984
Debit cards
1,302,489
351,536,763
Total
4,957,900
1,289,492,568
17
Supply of ATM
Based on the PMA reports, 15 banks out of 20 working banks (In addition to two banks which reported that they are currently in the
process of installing the ATMs) currently provide ATM service, through 240 stations distributed all over the districts of WB and Gaza,
the distribution of these ATMs is shown in the following chart:
73
50
41
North WB
18
Center WB
South WB
Gaza Strip
Most of the banks provide it is own ATM machines adjacent or close to the their branches, only few banks have spread their ATMs in
several centers in addition to those adjacent to the branches, including Arab bank, Cairo Amman Bank, Arabic-Islamic Bank, Bank of
Palestine.
Based on the survey findings, 9 out of 11 surveyed banks, reported that they provide ATM service, through 189 stations distributed
all over the districts of WB and Gaza, The estimated total 2008 volume of ATM cards for the surveyed banks is summarized in the
following chart:
Chart: Number of ATM Cards in 2008, active, inactive, canceled cards
10,307
1,799
56
Active cards
Inactive cards
Cancelled cards
19
251
224
151
North WB
Center WB
South WB
Gaza Strip
Point of sales are relevant to business arrangements could be one promising field that can attract many of the in the service industry,
tourism, retail and wholesale in Palestine, the growth of point of sales will be correlated to the expansion in the usage of credit cards
and visa electron cards. This field could be one of core roles that can be linked to the proposed company, as it could integrate between
the banks regarding the establishments and distribution of the point of sales network, and it will arrange the links with the merchants
and other business entities.
20
7. Critical success factors in e-banking industry: demographics & industry life cycle in Palestine.
When speaking of key factors influencing the growth for e-banking services, it is critical to point out that there multiple external variables
which either contributes to growth or slowdown the provision of these services. Globalization, urbanization and demanding lifestyles
as will be demonstrated in the upcoming aggregate statistics have imposed new trends on the Palestinian people like elsewhere in
developing countries. These trends in lifestyle represent the key drivers for current and future demand for e-banking services. A more
obvious trend toward globalization is the drastic increase and reliance on internet access.
The most prominent and complex success factor which must be present to positively influence the growth of e-banking services is the
degree of IT diffusion within the various segments of society. Availability of PCs, use of software to conduct various tasks and internet
use are all indicators to the degree of IT diffusion. This correlation was validated in our studys findings in the retail client survey which
showed that:
84.3% of those who use at least one e-banking service have computer at home
89.7% of those who use at least one e-banking service have internet at home
According to the Palestinian Information Technology Association at the time of this study, the following are some of the ICT key indicators in Palestine of relevance for the retail customers:
49.9% of the persons (10 years and above) who use the computer know how to use the internet.
21
Worth noting that our Retail customers survey showed much higher indicators, namely:
Indicators from PITA and from our survey in comparison to expected levels of the above indicators five years ago; one can safely detect
a substantial growth trend in ICT diffusion.
Despite of the lack of national statistics on the number of internet subscribers, t is estimated that the number of internet subscribers in
Palestine has almost tripled over the past three years to reach 72,834 in 2008 as per the figures provided by Hadara (the main internet
service provider in Palestine) recognizing that Hadara is one of many internet services providers. While another indicator, is the slow
increase in the number of fixed line subscribers in Palestine, reflecting future trend in the growth of internet subscribers. Trends in
growth are reflected in the below charts.
22
72,834
76,861
55,809
27,172
2006
2007
2008
Mar -09
23
357,509
350,442
341,330
2006
24
2007
2008
25
# of years of exposure
26
The 20 Palestinian banks serve four main segments of Palestinian society, individuals through retail services, corporate through commercial services and governmental and non-governmental institutions. As per Palestinian Central Bureau of statistics, the Palestinian
population is approximately 4 million in West Bank and Gaza. The Palestinian population has experienced an upward growth rate
exceeding 30 percent. This indicates that the population in the Palestinian territory is expected to reach 5 million in 10 years.
Approximately, 51% of the population is between 15 - 64 years of age which represents legal age for employment.
Approximately 55% of those employed in Palestine generate their incomes from salaries and wages. Another important demographic indicator is that 53% of the population is residing in urban cities while this trend is also growing, reflecting that the need for fast,
convenient and low cost e-banking services will be more demanded as trends for fast, easy and low cost services become more the
standard of life.
Additionally, the total number of economic establishments including public, private and NGOs in Palestine is estimated at 116,804
majority of which are involved in internal trade and services sectors while 16% are involved in manufacturing as per the PCBS 2007
statistics.
The type of banking services naturally varies widely amongst different segments and sub-segments due to their different needs. Yet
during the surveys it was demonstrated that banks have not expanding on the concept of segmentation and customer profiling to lead
their strategies for better servicing the Palestinian market.
These critical success factors and trends indicate that the electronic culture is becoming the norm and the familiar mode of living in
Palestine. This on its own represents the core of viability for investment and growth in electronic banking services.
In view of historic international trends the internet use and recent trends in Palestine, a general higher internet access, tied to demographical trends and a tactical pricing concept for over counter cash payments will further drive the use of new e-banking payment
solutions.
27
have the educational attainment of bachelors degree with the main service being internet banking
Are employees in the Palestinian authority civil servants with the main service being Visa Electron (not ATM/Visa electron).
28
Have an income between NIS 1,501 2,500 also using Visa Electron (not ATM/Visa electron).
Other indicators worth noting are the 2nd layer of users for e-banking services who:
Have the educational attainment of Secondary schooling mainly using Visa Electron
Have an income between NIS 2,501 3,500 mainly using internet banking.
Have the educational attainment between Secondary schooling and bachelors degrees
* More details on various services and user demographics can be found in the Annex 2
29
94.4
43.9
93.7
91.0
NO
YES
30
5.6
56.1
6.3
9.0
Internet banking
services
ATM machines
Credit cards
Bills payment
9.3 Reflections on Retail e-banking Services: Service description, Usage & Satisfaction of ATM Services
This section presents an in-depth analysis of indicators assessed in the retail clients segment toward ATMs highlights the client trends
in usage, satisfaction levels, key factors influencing their decision and some supply angles related to this service. .
The survey findings indicate that more than 86% of clients had the card since more than one year ago, as it could be in the charts
below:
While 62.5% have had before two years reflecting that e-banking services particularly cash withdrawals as an ATMs service maybe
reaching its maturity state within the current locations while other functions are still in the early phases of introduction. Hence the opportunity for optimal utilization is strongly present for other functions in ATMs.
Less than 1 Years;
13.1
Before 2 Years;
62.5
31
0.0
94.4
86.8
94.0
94.4
88.4
24.6
NO
YES
100.0
Cash
withdrawal
5.6
Request
cheques
13.2
Deposit
6.0
Charging
mobile
5.6
payment of
bills
11.6
Transfer from
account to
account
75.4
Inquire about
the balance
As mentioned earlier and further demonstrated in the above chart, other types of ATM functions are significantly underutilized, yet
slowly gaining momentum. Reasons could be related to the fact that these services have yet to gain grounds through proactive promotions and awareness building tools.
ii. Frequency of usage for ATM Cards
With respect to the frequency of usage, the survey findings show that at least 30 percent of clients use the ATM machines at least once
weekly, as it could be observed from the following chart:
32
Once a week;
21.2
Once a month;
29.2
The above may indicate that the number of transactions via the ATMs is already quite high as such traffic on ATMs may also be high
indicating the need to expand the number and geographical spread to ensure convenient services.
A major misconception validated by the survey was the fact that 51.1 % of the clients think that their banks charge commission on the
ATM usage. This supports the assumption that retail e-banking clients are not well informed of benefits of e-banking services by their
banks staff or material..
33
94 agree that ATM machines are easy to use for cash withdrawals
76% agree that ATM is a safe means for withdrawals while comparatively speaking almost 20% agree that it is a safe means for deposit.
Only 33% agree that ATM machines do not stop while 43% believe that ATM are not reliable
Only 56% agree that ATM machines are well spread and easily accessed
In summary, the above reflects that there is still much more room for improvements in ATM services and function utilization.
Details on level of satisfaction from ATM services are summarized in the following table:
Satisfaction indicators
Agree
Neutral
Not agree
Total
33.9
21.6
43.6
0.8
100
76.7
15.3
7.6
0.4
100
20
2.1
8.1
69.8
100
54.7
19.2
22.6
3.4
100
75.7
10.6
12.3
1.3
100
94
4.7
0.9
0.4
100
17.1
1.3
2.5
79.1
100
56
16.2
16.7
11.1
100
18.8
2.1
4.3
74.7
100
45.3
5.6
46.1
100
34
If anything, the above depicts that clients rated user friendliness and availability to be the most important factors while the least
important factor in return for the above benefits is commissions and charges. This means that if the first two were strongly available
then clients are most likely willing to pay for these attributes.
First Importance
Second Importance
Third Importance
Forth Importance
Fifth Importance
Commissions/Charges
15.7
9.3
16.8
55.4
62.5
Availability
20.9
40.9
25.0
9.7
0.0
Usability
52.3
22.8
14.9
13.3
0.0
Safety
8.9
26.5
42.8
21.0
0.0
Other
2.1
0.5
0.5
0.5
37.5
Total
100.0
100.0
100.0
100.0
100.0
The most interesting findings is that safety is considered is a limited concern held by only 8.9 percent, which indicate that customers
are highly feel safe to use the ATMs.
Spread of ATM 15 banks currently provide ATM service, through 240 stations
35
security measures/tools
Watching camera
Pin code controlled by the client
Separation between handling the card and the pin code (different employees handle each one)
Stand by generators for ATMs, special room for ATMs
limitations set on (withdrawals, deposit, Withdrawal limit range from $800 - $1500
transfers)
Limits on transfers from account to account (one bank reported a limit up to $5000)
issuance procedures
the replenishment
monthly frequency
36
and Special employee accompanied with security guard (2-3 times a month)
For far machines, the replacement cassette is filled with currency in the branch,, then an employee
accompanied with security guard in special car replace the empty cassettes with the new filled out cassettes
Each time the an employee match between total value of transactions with the amount of currency inserted in
the cassettes
once weekly we replenish our ATMs unless was a need for short period and two employees manage the
replenishment process of which is the branch supervisor
lack of needs assessment for updating the electronic banking process
absorbing the new systems, the hackers
maintenance of the electronic systems, to be in use all the times
people still need awareness campaigns usefulness of ATMs and others
9.3.2 Credit Card Services: Service description, Usage & Satisfaction of credit cards Services
This section presents an in-depth analysis of indicators assessed in the retail clients segment toward credit cards, highlights the client
trends in usage, satisfaction levels, key factors influencing their decision and some supply angles related to this service.
i.Credit Card trends in usage
Credit card is a payment instrument with a line of credit. The issuer of the card grants a line of credit to the consumer (or the user). A
credit card is different from a charge card, where a charge card requires the balance to be paid in full each month. In contrast, credit
cards allow the consumers to revolve their balance, at the cost of having interest charged. Level of credit often fixed to a set amount.
Credit interest in general higher than for more standard lines of credit, bank loans etc
The survey findings indicates that only 6.5% of the individual clients have credit cards, 51% of them have got the card since more than
two years, as it could be in the charts below:
37
The survey findings show that about 66.6% use the credit card for different purposes while only
33.3%% of persons who have credit cards rarely use it.
58.8% of the clients who have credit cards use it while traveling (outside Palestine), while the rest use it in Palestine. This indicates a
growing trend in the use of credit cards in Palestine and the development of the commercial/retail infrastructure to support this trend.
Also we can say that 63.6% use credit card for cash withdrawal while 36.4% dont.
Other;
11.8
Outside Palestine while travelling;
58.8
Shopping inside Palestine;
58.8
38
Once a week;
5.9
Once a month;
23.5
From the above it could be observed that the usage of credit cards is less frequent than the ATM cards, for reasons attributed for the
charges imposed on each transaction. Credit cards are mainly used for business oriented customers who travel, and/or use the cards
for over drafting advantages. We can also assume that ease of obtaining a credit card is directly correlated to low levels of frequency
in use.
39
iii.Client satisfaction
A set of indicators were put forth for evaluation of retail clients satisfaction levels from credit cards which reflect the following major
points to be considered as per the corresponding table:
97% of respondents agree that the bank staff tolerate/understand their queries
Only 61% agree that the fees for issuing the cards are reasonable
Out of the respondents using credit cards, the majority of users are satisfied with respect to the different attributes relevant to the credit
cards.
Satisfaction indicators
Agree
Neutral
Not agree
Total
85.2
2.9
5.8
5.9
100.0
Interest is reasonable
67.7
2.9
26.5
2.9
100.0
88.2
5.9
5.8
0.0
100.0
76.5
8.8
11.7
2.9
100.0
97.1
2.9
0.0
0.0
100.0
61.8
17.6
17.7
2.9
100.0
70.5
8.8
11.8
8.8
100.0
91.1
5.9
2.9
0.0
100.0
40
The table below details the factors influencing usage of credit cards with respect to the degree of importance:
First Importance
Second Importance
Third Importance
Forth Importance
Fifth Importance
Commissions/Charges
14.7
3.7
8.0
42.9
15.8
Availability
5.9
29.6
24.0
23.8
10.5
Usability
47.1
33.3
16.0
14.3
10.5
Safety
17.6
22.2
32.0
9.5
26.3
Spread Of POS
14.7
11.1
20.0
9.5
36.8
Total
100
100
100
100
100
41
4,119
2,242
2,007
573
North WB
42
Center WB
South WB
Gaza Strip
84,933
24,872
14,907
The total value of the credit cards transactions is estimated at an approximate money value of US$ 48,385,770, To highlight the value
of the total of credit cards transactions, with respect to the type of these transactions based on the reported information from the 3
banks, the following chart summarize the survey findings in this regard:
43
37,60
7,66
1,02
Total annual amount
cash withdrawal locally
2,01
Total annual amount
cash withdrawal internationally
As it could be observed from the above, withdrawals locally are the most type of transactions that is used by the clients, in the second
rank are international purchases. Another point can be detected from the above chart, that the clients used cards outside the country
for purchases mainly, while they use these cards for cash withdrawals locally.
44
45
Bank 1
$70
$140
Bank 2
$60
$90
Bank 3
$30
$60
Bank 4
$35
$71
Bank 5
$25
$50
As it could be observed there are no standardized commissions on different types of cards and different banks. This is attributed mainly
to the bargaining power of the banks when negotiate with the international credit cards providers, as economies of scale is considered
in this regard, which may give a positive indicator for issuance of local card linked to international provider, as this can grant the better
terms and charges.
46
The commission and interest on cash withdrawals and purchases using credit cards for the surveyed banks could be summarized in
the table below:
commission and interest of cash withdrawal (using credit cards)
Commission
interest
Bank 1
3.8% /transaction
20% annually
Bank 2
$4% /transaction
1.2% monthly
Bank 3
$4% /transaction
1.67 monthly
interest
Bank 1
20% annually
Bank 2
1.2% monthly
Bank 3
1.67
1.67 monthly
ix Other e-services
In fact the credit card is correlated to many other e-services that may introduced in the international and local markets such as e discount, e-commerce which is an expanding field for applying agent technologies. A related service which should be used as an indicator
on commercial points of sale readiness is the e-Points launched to Palestinian consumers this year. So far it has already attracted
over 100 participating merchants from the leading dining, fashion, gift, service, family circle and foodstuff outlets in the West Bank, and
expects to create a solid clientele base of 30,000 cardholders by the end of this year1.
1 www.ameinfo.com/news/Company_News/E/e-Points
47
9.3.3. Visa Electron Services: Service description, Usage & Satisfaction of Visa Electron
This section presents an in-depth analysis of indicators assessed in the retail clients segment toward Visa Electron, highlights the client
trends in usage, satisfaction levels, key factors influencing their decision and some supply angles related to this service.
Visa electron cards provide mixed services that combine debit and credit services. The difference between Visa Electron and Visa
Debit is that payments with Visa Electron require that all the funds be available at the time of the transfer (i.e., Visa Electron card accounts cannot be overdrawn). As a comparison, Visa cards allow transfers of unavailable funds below a certain limit. As a result, some
online stores and all offline terminals (e.g., onboard trains or planes) do not support Visa Electron because their systems cannot check
for the availability of funds.
Traditional ATM cards are being replaced by Visa electron by leading banks while some banks still provide both types of cards. And the
majority of the banks only provide traditional ATM cards.
The survey findings indicate that 51 percent of clients have visa electron while 69.6% have had the visa electron card for more than
two years as it could be in the charts below:
More than 2 years;
69.2
48
49
Once a month;
40.8
The above indicates that the monthly usage of VISA electron is consistent and quite high, demonstrating dependability of user on this
service.
50
When asked about the use of Visa electron in another banks ATM machines, responses were:
No,without reasons;
37.8
Yes;
21.9
This leads us to say that the majority 39% are under the wrong impression and do not fully understand the benefits of Visa Electron in
terms of flexibility in ATMs otherwise they could use this function. While 21% only recognize the benefits and use this function. Finally
37% do not use it for other reasons, could be due to the large spread of their own banks ATMs or low spread of Visa Electron ATMS.
51
Agree
neutral
not agree
Total
56.0
17.0
18.0
9.0
100.0
77.5
10.0
3.5
9.0
100.0
68.5
5.0
11.0
15.5
100.0
82.5
7.5
4.5
5.5
100.0
75.0
9.0
7.5
8.5
100.0
73.4
11.1
14.0
1.5
100.0
52
Commissions/Charges
First Importance
Second Importance
Third Importance
Forth Importance
Fifth Importance
12
9.6
18.7
35.3
24.5
Availability
17.8
41.9
21.9
9.8
6.4
Usability
58.6
19.8
11
13.5
9.6
Safety
7.3
22.2
38.7
32.3
6.4
4.2
6.6
9.7
9.0
53.2
100.0
100.0
100.0
100.0
100.0
Total
The above reflects that VISA electron is still in the early stage of introduction where many misconceptions need to be altered in terms
of usability. The non-availability factor says a lot in terms of users interest and demand to have this service hence the low levels of
supply in this respect.
Worth reflecting on is the variation in responses amongst different regions in Palestine.
% of clients who selected each factor as one of most three factors influencing their
usage of VISA ELECTRON
Usability
Availability
SOPOS
Safety
All PT (%)
North WB
14.2
19.0
22.7
19.5
3.8
5.7
21.4
5.0
Region
Center WB South WB Gaza
12.1
17.2
16.5
16.5
17.9
18.8
17.1
20.5
21.6
29.9
33.2
32.0
53
27,066
cash withdrawal locally
54
purchases locally
101,356
cash withdrawal internationally
22,125
purchases internationally
801,02
1,11
cash withdrawal locally
purchases locally
1,09
cash withdrawal internationally
0,57
purchases internationally
However, with respect to the number of visa electron cards, 4 banks reported that the total number of active visa electron cards is estimated at 198,011 cards while 40,000 were reported as inactive cards. Only two banks (with 133,942 issued cards) provided information
about the distribution of issued visa electron with respect to region as it clear from the chart below:
55
34,621
20,834
North WB
Center WB
South WB
Gaza Strip
It worth observing that, the Visa electron follows the same pattern of the ATMs cards distribution, where the northern region of west
bank is the highest region with respect to the number of cards.
The volume of the visa electron transactions on the level of the 3 surveyed banks was approximately 2,969,580 of locally cash withdrawals valued at an approximate value of US$ 801,020,000. This leads to the conclusion that the VISA ELECTRON CARDS are
used widely in the local market yet still to be exploited in international usage. Possibly there needs to be more awareness building
campaigns on the values present internationally.
56
interest
commission
Commission/charges of using Visa Electron card in cash withdrawals Internationally (equivalent to US$)
0.05%
$2.75
Commission/charges of using Visa Electron card in cash withdrawals using other bank ATM (equivalent to US$)
0.05%
$2.75
It is worth mentioning that withdrawals using visa electron from an ATM machine of other bank is considered as international
transaction
57
To indicate the increase of number and volume of visa electron transactions is the potential growth of FX transactions as summarized
with the below table:
Example on usage of ATM cards (which include FX transactions)
Visa Electron
Year
Number of transactions
Value USD
2006
106,121
13,283,982
2007
107,548
12,664,774
2008
110,614
17,969,343
This table is developed based on data was provided only by one bank
9.3.4. On-line Banking: Service description, Usage & Satisfaction On-Line Banking
This section presents an in-depth analysis of indicators assessed in the retail clients segment toward on-line banking, highlights the
client trends in usage, satisfaction levels, key factors influencing their decision and some supply angles related to this service.
The findings show that only 7.6% of the surveyed clients use Internet banking, while the rest do not use Internet banking services for
various reasons that will be demonstrated in the upcoming sections. As expected, this is the least used form of electronic banking
services due to its recent introduction which is in-line with trends all over the world.
However, positive signs of IT diffusion within the surveyed segment reflect the likelihood of increased demand for on-line banking.
Particularly, survey findings indicate that 71.4% of clients do have computers and 52% do have internet accessibility at home, among
them 34.6 have internet in work place. As shown in the table below:
58
Total
No
Yes
39
369
408
No
372
377
44
741
785
Total
Furthermore the correlation of IT diffusion and users of online banking is clearly validated as 88.6% who do use Internet banking also
have internet subscription.
i Client satisfaction
The majority of those using online banking 72% are satisfied. Which indicate that the on line banking prove to be acceptable and satisfactory by the clients, which may encourage the possibilities of increasing the client base of the internet banking services.
The table bellow shows the level of satisfaction of different variables:
Agree
Neutral
Do not agree
Total
75.5
19.3
5.3
100.0
75.9
12.1
12.1
100.0
55.2
24.1
20.7
100.0
How do you evaluate the Internet banking services (Accessible any time)
82.2
10.7
7.2
100.0
59
40.2%
use the net, but does not know if the bank offers this service, but in the case he knows, he would use the Internet banking
33.3%
He/she use the net, but does not know if the bank offers this service, but in the case he knows, he would not use the Internet banking 8.7%
knows about the service, but never use it
60
17.8%
iii E-billing:
As part of on line banking services, the survey findings show that the overwhelming majority of clients still use traditional payment methods way as it shown on the chart:
14.3
84.9
99.4
99.0
88.4
99.4
98.7
NO
YES
85.7
15.1
0.6
Throughthe
internet
1.0
By phone
banking
11.6
1.0
1.3
As it could be observed a neglectable merger of the clients are using the e billing approach. However, when the clients were asked
about the preferred way in the future to pay bills it was found that about one fifth of the clients indicated to the electronic methods such
as internet banking, phone banking, ATMs. As it is shown in the chart:
61
By phone banking;
1.4
On counter of providing company;
37.8
Throughthe internet;
14
62
70701
87828
90448
89858
116,804
2003
2004
2005
2006
2007
Taking in consideration that 95% of private companies are small in size and family based ownership and management, a certain small
number of establishments have yet to open bank accounts. Even though it is believed that this segment is very small and the majority
of the establishments conduct the bulk of their financial transactions through banks to manage their various operational processes.
63
43%
16%
0-4 employees
5-9 employees
10 and mor
As it could be observed from the above, the larger establishments tend to be more IT oriented in comparison to smaller ones. For those
organizations that have computers, the vast majority of them use internet as the following chart summarize:
64
35%
31%
18%
70701
87828
90448
65%
69%
82%
0-4 employees
5-9 employees
10 and mor
The above may give a general indication on the extensive use of internet in corporate usage particularly that the difference in internet
access is not limited to large size companies and is more or less the same between small and medium size companies.
65
66
Before 1- 2 Years;
23.1
It was found that 73.8% of companies who have credit cards are satisfied from this product. Interestingly, the survey shows that 58.3%
of the surveyed establishments are willing to use local credit card despite the major use being international travel.
67
ii Online banking
The survey findings of a selected big leading corporate show that 73.2% of the big surveyed companies use on-line banking as shown
in the following chart:
No;
26.8
Yes;
73.2
68
The findings show that about 73% of those using online banking use it for balance inquiry and bank statements and to a much lesser
degree for intra accounts fund transfer
Reasons for not using online banking by other companies are summarized accordingly:
To avoid mistakes.
The company policy uses the traditional way to deal with banks.
The banks branches are spread and not far from companies.
For those who use the on line banking services, the findings show that 81% are satisfied, and 63.3% consider it better than physically
visiting banks.
The survey findings prove that, once the companies realize the merits of on line banking, they will be highly satisfied as the current
practitioners indicated about their experience. This could be a further indicator on the role that may be done by the proposed intermediary banking Services Company.
69
Special considerations
This section handles important information received during the Banks survey yet it is not reflective of the whole banking industry or client base.
More specifically, the upcoming information covers volume of on-line banking foreign exchange transactions and e-billing provided by one bank.
The table below demonstrates the potential growth of FX transaction via internet given the trend over the three year period:
Year
Internet Banking
Number of transaction
2006
4,739
11,084,472
2007
5,619
12,363,073
2008
7,353
16,318,540
The number of transactions increased by 55%, and the value increased by 47%,, which indicates yet another trend in growth for internet
banking.
iii E-Payment & E-Billing
The study shows that 2 banks out of the 11 surveyed banks provide Electronic Bill Presentment and Payment EBPP in addition to 9
banks out of 11 who provide direct debit service.
There are several services for electronic billing and payment, yet for purposes of this study Electronic Bill Presentment and Payment
and the 2nd is direct debit will be the focus. EBPP is mainly driven by utilities companies due to the efficiency in cash flows provided
and the lower transaction cost related to non-payment by their clients from having their bills paid on time by households, corporate
companies and other institutions.
EBPP is the process by which companies bill clients (bill presentment) and the bank has prior authorization to transfer payments electronically. EBPP involves the billing company and the paying client in a financial transaction cycle and should not be confused with
direct debit payment through online banking. EBPP should also not be confused with Electronic Funds Transfer, commonly known as
70
EFT. Jawwal, Paltel, and electricity are the main companies using Electronic Bill Presentment and Payment
Several surveys have indicated that a percentage of consumers inclined to use EBPP often times do not know which utility or company
offers this service, or how to get started with EBPP.
This service is could be of high level importance by corporate clients more than retail client due to its positive impact on efficiency in
operations for the corporate company to ensure all utility bills are paid on time and avoid work disruption as a result of utilities being
cut out. Additionally to minimize physical presence and time required to conduct regular bill payment rituals which could take up more
than an hour every month. While none of the billing companies charge a fee for using this service.
iv Direct Debit payment
Direct debit on the other hand entails the client making payment without the bill presentment to the bank. The client requests/authorizes payment to the intended company through internet banking or other channels such as mobile phone or credit card. Many utilities
companies in Palestine offer this service through coordination with banks. Paltel and Jawwal offers direct debit with discount to encourage people to use it and paying bills via phone tones and via internet using credit and debit cards.2
JDECO (Electricity Company) offers direct debit, but on the other hand its strategy is to convert all customers to use prepaid cards and
that clear enough from statistics obtained from the company:
Number of customers
265,000
2,421
20,000
Also JDECO simplify paying by offering paying bills on its counters by using credit and debit cards.3
http://www.paltelgroup.ps english/index.php.2006
http:www.jdeco.net/2005
71
Based on the reported data from 7 banks, the chart below shows the potential growth of using direct debit for paying Paltel bills:
Potential Growth of Using Direct Debit for Paying Paltel Bills
48,349
34,356
19,987
2006
72
2007
2008
Based on the reported data from 4 banks, the chart below shows the potential growth of using direct debit for paying Jawwal bills
Potential Growth of Using Direct Debit for Paying Jawwal Bills
1,113
755
507
2006
2007
2008
Based on the data obtained from Arab bank, the table below summarizes total number of bills paid for Paltel and Jawwal through internet banking
Total Number of E-billing transactions using Internet
Item
2006
2007
2008
Paltel
409
666
1,054
Jawwal
375
369
494
As it could be observed the usage of e payment through internet banking is ever increasing over years particularly since these figures
represent only one bank while 9 other banks also provide this service yet we do not have their figures.
73
offering a diverse product mix of e-banking services to their own individual and corporate clients
An Increase in the volume of transactions due to intra-banking relations managed by the company
74
Higher level of their own customer satisfaction due to the benefits enjoyed from intra-banking cooperation such as lower fees, wider geographic coverage, and standardization in e-banking channels interfaces.
Upcoming is a projection of revenue of the second business model along with the various assumptions considered.
12. Summary of Potential revenue / Income forecast for the proposed company
For purposes of estimating the potential revenue stream of the proposed intermediary banking Service Company, the following are the
underlying basic assumptions in addition to those detailed for each e-banking service in annex 3:
Value added services and perceived benefits from client banks to by banking clients made possible through the banking services intermediary company will allow leverage for fair charges/commissions yet:
Charged commissions should be either a percentage of the cost reduction of the bank transaction or
No increase the overheads associated with the banking transactions as a result of transferring various e banking services through the
virtual platform of the proposed company.
Banks will see value integrating the e banking services through the proposed company as such will work with the said company. As the
company will be able to offer its client banks more services and increased volume of transactions. Make it more efficient by improving synergy and utilization rates of various channels, which will lead to reduced cost and increase the profitability of the banks.
Worst case scenario assumed for costs: International costs rates are considered as benchmarks in (income) estimations for the proposed
company.
75
Revenues that can be generated from the e-banking services are depicted in the following section while details are also present in annex 3.
The research team realizes that these calculations are based on assumptions developed according to some comparisons with international bench marks, and educated guess. However, the exact figures that can be more reliable and could be easily obtained once the
banks and investors became interested to cooperate in establishing the proposed company.
The purpose of the above estimated revenues and assumptions, was to give a tentative potentials for establishing an intermediary
company that integrate the provision of the e banking services among the banks.
Based on the detailed assumptions and conclusions detailed in annex 3 Revenue and income assumptions, the following table summarizes the potential revenue that can be generated from the proposed company:
Type of e-banking services
units
Number of units
transaction
3,515,116
351,110
cards
4,957,6054
5,000,000
Credit cards
cards
233,795
5,000,000
On-line banking
transaction
3,000,000
1,500,000
ATM
Others5
500,000
Total
12,351,110
We must underline that the above estimates are mere indications only as all of it is based on the assumption that the intended company
can share with the Banks the amount of reduced costs as a result of adapting the e banking services. However, these figures will be
more realistic, once the banks accept the idea of the intended company then a reasonable transaction volume forecast can be established based on investment size and the corresponding service capacity, in addition to anchoring the potential commissions/ margins
that can be charged from the company.
4
Including visa electron cards that provides among other the traditional ATM cards services.
76
77
313992
249689
2007
78
2008
13.2 National system for IBAN, International Bank Account Number system, through an automated clearing house is essential for
growth in electronic payments
In order to facilitate an increase in use of electronic banking, in this case, electronic payments, a fully introduced system like IBAN is
essential to allow all users an easy access.
A system like IBAN will facilitate even the smallest company to easily receive their payments through electronic banking solutions.
A growth in that respect will automatically also drive usage from a customer perspective.
The high penetration of internet bank users in for instance Sweden is to a large extent believed to be the effect of the Swedish equivalent to IBAN used since many years on the local market, bank giro or post giro
79
Easy accessible, through many outlets, your home computer, at your work place
24 hours over 7 days, services always available when you need it.
13. 5 Investment opportunity is confirmed yet all-inclusive financial feasibility needs closer review
In view of the findings as presented above additional investment opportunities linked to market growth potential and expected returns
from the establishment of a national system for ATMs, EFTPOS, cards and electronic payments must be considered fully confirmed.
The quantitative material cannot support an absolute conclusion on expected revenue nor in terms of cost, hence returns on investments for expanded electronic banking services, are still to be determined. While all findings, and international comparisons, indicate
a clear trend in growth volume potential; which should be a sufficient indicator to instigate a positive investment decision towards expanded services due to historically demonstrated positive returns.
14. Next steps on the issue of proposed company and expanded services
The study clearly demonstrates that investment in e-banking services in general and in the joint intermediary banking Services Company in particular should offer a number of direct and indirect advantages for the Banking sector, its customers as well as the state of
Palestine. It is recognized and highly prioritized that the PMA must lead and adopt the needed legal and regulatory to facilitate the
expansion of electronic banking services in general and the framework for the proposed intermediary banking services in particular.
In order to start the actual process for implementation, several prerequisites must be present which are reliant on external stakeholders
intents:
80
Once the above is in place, the next natural steps and recommendation are reliant on the path chosen by the committed parties yet
can be defined in broad terms as follows:
1- Establish a complete business plan with the final objective of a full operation.
Organizational structure
Rules and regulations on draft level concerning legal aspects, oversight methods and conditions for service rendered
software specification
hardware specification
operating expenses
81
82
Enclosure 1 - General Guidelines for improved marketing of electronic banking services through current investments inhouse solution
Given the outcomes of the study and the expected time frame for the proposed transformation to materialize in the medium term two to
three years, the study team put forth the below general guidelines to assist Palestinian banks in better marketing the current e-banking
services offered independently. Banks that have already invested in e-banking services need to make a clear policy decision to transform their clients toward e-banking services within a specified time frame in order to truly harvest the returns from decreasing over the
counter operating cost by increasing utilization of full functionality e-banking services. Toward that end, banks could temporarily shift
human resources toward improved marketing of e-banking services and once the shift is successfully achieved to return these human
resources in the area of customer relationship management.
The following are some guidelines:
To expand the use and frequency of use of already present functions. Since there are still many underutilized functions in various services
(namely non-cash withdrawal functions in ATMs, non-account information functions in online banking, and more use of credit and debit
cards locally)
To Train and test employees on the full functions and benefits of e-banking services offered by the said bank (ATM, POS, Credit/Debit
Cards, online banking, e-payments in order to better communicate these to banking clients.
To assign an employee to verbally communicate and physically introduce and assist clients on how to use ATMs full functions and other
e-banking services, this could be done through one on one assistance and actual demonstration of conducting possible transactions via
electronic means during holiday seasons and times of extensive load on tellers. This could be done in rotating employees to ensure full
exposure.
To adopt incentive schemes (price or promotion) in order to expedite transformation of electronic banking services by retail and corporate
clients; decrease use of physical handling over the counter. Similar to what some utility companies are already doing in providing discounts,
83
Banks should focus on the benefits of the corporate segment and design specialized services for corporate e-banking functions related to
e-payment, e-billing and on-line banking to include utility companies.
To advocate the related PA to postulate a strategy to adopt paying governmental fees electronically
While on a different note, and based on interactions with banks and their clients during the surveys, several recommendations should
be taken into consideration by banks which are linked to the overall marketing capacities present in banks. Below are some suggestions:
Banks must profile their client base according to market segments in order to better serve their needs, retail and corporate. This profiling
must be part of the client relationship management system (software) to facilitate positive interaction between bank CRM staff and clients.
The proposed profiling should be the basis to develop new banking services and or enhance existing ones according to differing needs
between corporate and retail clients.
Corporate segment is underestimated, this segment has high potentials yet the nature of services and interactions must accommodate the
values sought by this segment, being efficiency of conducting banking transactions and effectiveness in capturing business opportunities.
The above are partly as a result of this study outcomes in addition to recommendations of another study conducted by a banker from
Palestine about the usage of e-banking services and e-billing.
84
Tools Design: The study tools including checklists and questionnaires were designed in a participatory manner with the participation of the
international and local consultants team and with key stakeholders from The Association of Banks, International Business Forum (PIBF),
and Palestinian Monitory Authority.
Based on the literature review, A comprehensive questionnaire forms have been prepared, for obtaining the detailed information from the
banks, a questionnaire for surveying a representative sample of banks clients, a questionnaire for interviewing a judgment sample of corporate clients, beside a checklist format for collecting data from the utility companies.
The banks questionnaires were distributed through ABP on 19 banks, to be filled out from different banks departments, out of which 11
banks were filled the questionnaires partially, and sent them back.
The utilities companies were asked to provide data on their current client base and the segmentation of their clients with respect to their
payment methods.
A sample of all banks clients were interviewed to fill out a structured questionnaire that include detailed questions covering their awareness,
practice, attitudes and satisfaction of different e banking relevant dimensions. The following points summarize the approach followed in
designing and implementing the survey:
Training of Data Collectors and Field Supervisors: Data collectors and survey supervisors were mobilized in a manner that ensures
geographic coverage of target banks branches. Field data collectors were assigned to the various branches in different districts of the
West Bank and Gaza in accordance with the sample size in each region. Data collectors were trained on data collection techniques by
the survey team. This training was done through training workshops (in WB and Gaza).
85
A Pilot survey was conducted to identify any potential problems in the field once the full survey is deployed. This pilot survey was directly
supervised by the study team. Problems were identified through this pilot survey, and accordingly a second version of the questionnaire
was prepared.
Data collection: Each data collector was assigned specific branches and time schedule for conducting data collection. Completed questionnaires were submitted to the main office to be reviewed and sent to data entry.
Editing and Coding: The questionnaires were edited using the same instructions adopted for editing. Then some questions were coded
according to pre-designed coding system.
Data Entry and Results Analysis: questionnaire data was entered into the computer, using a data entry template (ACCESS database). A
thorough analysis of the gathered data and information was conducted to arrive at findings and conclusions that answered the questions
and issues determined in the survey objectives. The analysis included a quantitative analysis using SPSS software which provided totals
and percentages by categories gender, age groups, income level, regions, education, etc.
Quantitative Assessments: Expert Feedback Session: A feedback session (or in-depth interviews) was organized to present and discuss
the findings of the survey findings and to draw final conclusions for the proposed company idea. Participants comprised the design team,
representatives from banks senior management, banking industry experts,.
86
87
Percent
Internet
ATM/Visa electron
ATM
Visa electron
18-24
13.3
13.1
15.7
25-29
23.3
20.2
30-34
16.7
18.9
35-39
21.7
40-44
Credit cards
10.3
3.9
11
17.8
22
21.6
21
18.6
20.7
9.8
17
15.6
16.1
14.2
19.6
17
15
11.3
11.9
10.3
11.8
12
45-49
1.7
8.4
8.1
7.8
7.8
50 and above
8.3
12.4
11.9
14.7
25.5
15
Educational Level
Percent
Internet
ATM/Visa electron
ATM
Visa electron
Credit cards
0.4
0.4
Primary
1.7
3.1
2.5
2.6
11.8
Preparatory
6.7
11.6
10.6
10.3
5.9
Secondary
20
27.3
22.9
31.5
31.4
27
Intermediate Diploma
10
11.8
10.6
11.2
7.8
10
BA
50
38.2
43.6
36.6
37.3
41
11.7
7.6
9.7
7.3
5.9
Total
100
100
100
100
100
100
88
Main occupation
Percent
Internet
ATM/Visa electron
ATM
Visa electron
Credit cards
Farmer
0.7
0.4
0.9
3.9
Laborer
1.7
1.3
0.4
0.9
PA employee
31.7
52.1
49.4
53.4
25.5
42
NGO employee
2.9
3.8
2.6
5.9
28.3
17.1
20.9
15.1
13.7
19
Own Business
26.7
14.3
11.5
16.4
43.1
22
5.1
6.4
5.6
3.9
Housewife
3.6
3.8
2.6
Other
6.7
2.9
3.4
2.6
Total
100
100
100
100
100
100
Percent
ATM/Visa electron
ATM
Visa electron
Credit cards
1.7
8.7
6.4
9.5
1501-2500
25
35.6
32.2
37.9
27.5
32
2501-3500
30
25.8
26.3
24.6
25.5
26
3501-4500
15
11.8
14
8.6
9.8
12
4501-6000
10
9.8
11.4
10.3
9.8
10
6001-8000
8.3
4.7
5.9
4.3
13.7
10
3.8
3.8
4.7
11.8
Total
100
100
100
100
100
100
89
This assumption is reasonable, since the spread of ATMs will be utilized better as each single ATM will provide services for the clients of all banks.
90
As it could be observed in a previous section, the range between the charges on credit cards obtained by different banks is very high,
which reflect different options/advantages on the one hand, and reflects the various bargaining power between the banks and the international suppliers of credit cards on the other hand.
Local issuing under a joint umbrella might hold several different advantages further to a direct cost benefit.
Income from Visa electron cards
As indicated before, the visa electron has mixed nature, so the generated income will be based on the credit/debit services. In previous
sections we indicated to the revenues of ATM cards, in which we included as well the numbers of visa cards. On the other hand the
potential income that can be generated as a result of interest rates or the commissions that can be charged from the credit services is
reflected to some degree in the credit card potential income.
The below table shows the summarize number and value of FX transactions using Arab Bank ATMs only:
Example on usage of ATM cards (which include FX transactions)
Year
Visa Electron
Number of transactions
Value USD
2006
106,121
13,283,982
2007
107,548
12,664,774
2008
110,614
17,969,343
As it could be observed in the above table, the number of transactions increased by 5%, while the value increased by 35%, which may
indicate that the total value increase result from the increase in the number of transactions and the value of these transactions grew
significantly. This go in line with the total trend observed in this study, that all e channels are up ward increasing.
It is worth to indicate in this regard, that the generated margins from the banks are calculated on the total value, regardless of number
of transactions.
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Outward remittances
137,483
Inward remittances
203,927
Cheques
2,648,533
Assuming that 50% of the reported transactions will be implemented through internet banking within 1-3 years of the launching of the
proposed company. Since the banks will gain around $2.5 per transaction shifted to internet banking, it is assumed that the proposed
company can charge banks, in trade off providing national internet banking solutions, a rate of $0.5 per transaction. Based on these
assumptions, the internet banking can generate revenue of equivalent to about $750,0007.
A development of internet access in line with international trends present and historic is assumed to increase above indications manifolds.
This figure is based on assumptions that can be changed based on the IT hard and software required infrastructure, and the banks calculations, but for the purpose of giving preliminary indicators we developed the above assumptions built on the customer survey outcomes.
7
92