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A comprehensive overview of the cards, payments and consumer banking market in Oman. Cash remains the predominant payment mode in Oman, especially for small-value purchases. However, cash is increasingly being replaced by payment cards. Debit cards remain the most popular payment card for Omanis, representing about 94 percent of payment cards in circulation.
Low-rate instalment loans have become popular with credit card customers and are a key enhancement offered by issuers. Visa holds a strong position in the Omani credit cards market, with an estimated market share of 77 percent in terms of billed volume in 2016. However, Mastercard has grown its market share by actively offering promotions to
The payment cards market in Oman is concentrated among four key players: Bank Muscat, HSBC, NBO and Bank Sohar. The merchant acquiring business is growing in Oman, primarily due to the growth in merchant acceptance.
TABLE OF CONTENTS
Demographics and Economy
Outlines the key metrics and trends which influence the development of retail banking and payments in the country:
Explores the structure of the local banking system, its infrastructure and the leading players. Data includes:
Overview of consumer finance in the country. Categories analysed include:
Industry-leading credit card coverage. We detail the past present and future of the industry through our data and commentary, including:
Demographics and Economy
Geographically, Oman is a large country. However, the population is concentrated in major urban centres such as the country's capital, Muscat, and Salalah, Sohar and Nizwah. Muscat had close to 50% of the country's population in 2016.
The oil and gas industry remains a significant contributor to Oman's economy, accounting for around 45& of GDP and 86% of government revenues.
At the end of 2016, there were 16 conventional commercial banks of which seven were locally incorporated and nine were branches of foreign institutions. The top five retail banks in Oman in terms of asset value are Bank Muscat, Bank Dhofar, National Bank of Oman (NBO), Bank Sohar and HSBC.
Provision of consumer credit is split between banks and finance houses, with the latter particularly strong in vehicle finance. However, the dominance of finance companies in providing vehicle finance has been progressively challenged by major banks offering lower finance rates.
Cash remains the predominant payment mode in Oman, especially for small-value purchases. However, cash is increasingly being replaced by payment cards. The value of banknotes and coins in circulation as a percentage of GDP was about 6% at the end of 2016. Debit cards dominate the payment cards market in Oman; accounting for 94% of cards in circulation and 97% of the total payment card billed volume.
Mobile phone ownership is rapidly increasing in the country with a penetration rate of about 160 phones per 100 inhabitants. Usage of smartphones is also gaining momentum, and it is expected that smartphone penetration will reach 86% by 2019.
Oman has one of the smallest credit cards markets in the GCC region due to the small proportion of customers who are eligible for credit cards. This is reflected in the low credit card penetration rate in the country; the rate stood at seven cards per 100 adults in 2016.
Pricing and Enhancements
Credit card products in Oman are mainly offered with basic features. Among the typical enhancements found on card products are holiday season card spending promotions, instant discounts with partner merchants and prize draw schemes on new card sign-up.
Visa holds a strong position in the Omani credit cards market, with an estimated market share of 77% in terms of billed volume in 2016. However, Mastercard has grown its market share. Visa, which previously had a 100% market share of the debit cards market in Oman, lost 20% market share in 2012 when NBO switched over its cards portfolio to Mastercard.
Key Retail Banks and Issuers
The payment cards market in Oman is concentrated among four key players: Bank Muscat, HSBC, NBO and Bank Sohar. At the end of 2016, these four banks collectively contributed to an estimated market share of 92% in terms of credit cards in issue.
Merchant Acquiring and Processing
The merchant acquiring business is growing in Oman, primarily due to the growth in merchant acceptance. The government's requirement that all consumer payments for government bills and services be made through payment cards has supported this growth and has helped encourage card acceptance among merchants.
The online retail market in Oman accounted for an estimated $521.7 million in 2016 and is expected to increase further to reach $900 million by the end of 2020.
Regulatory and Markets Information
The Central Bank of Oman acts as the regulator for the country's commercial banks, specialised banks, money exchange houses and finance and leasing companies. It also acts as the advisor for the government in economic matters in general and on monetary and financial issues.
Reports deliver invaluable market and competitor intelligence on payments cards, e-money, acquiring/processing, retail banking, and consumer credit throughout the Middle East. Analysts and researchers use both primary and secondary source data and conduct in-depth interviews with senior industry executives and Middle East experts.
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