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Merchant Services

With reporting from Ankita Menon

Qatar residents who plan to travel between May and August and plan to use their credit or debit cards during this time should inform their banks beforehand.

Otherwise, their transactions could be declined, according to a new directive from Qatar Central Bank (QCB).

Speaking to Doha News, several local financial institutions have confirmed receiving a circular this week from QCB regarding this change.

Security concerns

A Doha Bank representative said that the move was an effort to increase security, because a pin number is not required to be punched in when cards with magnetic strips are used outside of Qatar. This could encourage fraud, he added.

For Doha Bank customers who want to use their cards outside of the country, they should SMS 92610 to ensure the service works while traveling.

Meanwhile, a representative at Qatar Commercial Bank said his company had received the circular, and that it contained warnings about transactions from certain countries, including Indonesia, China, Malaysia and Thailand.

Customers traveling to these countries must inform their banks so their transactions won’t be blocked while abroad, he said. CBQ can be reached at 44449000.

Meanwhile, a representative at Qatar International Islamic Bank said they have received the Central Bank directive and advised customers to call on 44840000 any time to inform them about the issue.

Several other banks, including HSBC and Khaleeji could not be reached for comment on Thursday.

Other efforts

Qatar has been working to combat financial fraud in recent months by adding security measures to local ATMs and banning the use of debits cards for online shopping.

That change, which took place during the end of last year – a holiday season for many residents – caused frustration for many customers. Many complained about not being informed about the decision, while others said it was simply inconvenient. Credit cards weren’t affected.

Speaking to Doha News in November, a QCB official said that new moves weren’t necessarily due to increasing incidences of fraud, but simply to stay ahead of the game.

Has your bank notified you about what to do when traveling abroad? Thoughts?

Credit for illustrative purposes only.

Duncan Smith/Corbis

Credit for illustrative purposes only.

-Anthony Ryman, brand consultant, for an op-ed in the Edge Magazine, a local business publication, about the state of Qatar’s banking services.

Citing recently released research, Ryman argues that because many Qatar residents are not happy with their banks, companies should rethink their strategies for wooing customers.

According to technology company Sungard, less than half of customers recently surveyed in Qatar feel that their banks understand their needs, even though some 95 percent still visit their branches regularly.

About half also said mobile and online services need improvement. And more than a quarter of customers surveyed said they were dissatisfied with how a complaint with their banks was resolved.

Case study

Ryman doesn’t cite examples, but a good case in point would be the lack of communication and transparency HSBC customers experienced earlier this month.

A few weekends ago, thousands of customers in Qatar and other GCC nations found themselves unable to use their debit cards after a “technical problem” hit the bank’s electronic network.

No alerts were sent out to these customers about the problem, or its subsequent resolution, prompting complaints from residents about the inconvenience and threats to move to other banks.

There are certainly many other choices. According to Ryman, Qatar, which is home to 2 million people, has 18 different banking institutions. But it’s very hard for residents to distinguish between them:

“We are overbanked…I urge you to try putting your finger over the logo on a (banking) advertisement and then guessing which bank it is, as the ubiquitous family photo with a smiling child in a perfect family setting beams out at you.”

To stand out from the pack, Ryman suggests banks concentrate on improving the customer experience. He urges companies to move beyond the “functional,” such as credit card and loan offers, instead cultivating “relationships,” in the context of customers’ financial futures.

His advice for greater transparency and relevance seems like it could to many other industries in Qatar, for which customer service is key.

Thoughts?

card

Neil Turner/Flickr

Several more retail banks in Qatar have been tightening their rules on the usage of debit cards for online purchases, in response to efforts by the country’s central bank to crack down on fraud.

The unexpected ban on using debit cards for online shopping – and in some cases, the unexplained deactivation and replacement of bank cards – is causing frustration among customers ahead of the holiday gift-giving season.

Commercial Bank of Qatar sent text messages to customers this month informing them that rules set out by the Qatar Central Bank (QCB) prohibit the use of debit cards to make purchases on the internet.

Similarly, the International Bank of Qatar (IBQ) also notified customers this week that they could not use their bank cards to pay bills online, according to one client:

“(I) just spoke to IBQ and they have confirmed that since last Sunday, December 1 you cannot use debit cards to pay for any e-government, Ooredoo or Kahramaa service,” wrote Nathan Delaney on Facebook. “As far as I can tell it’s just online but it’s a big inconvenience.”

That follows a text message sent by the Qatar International Islamic Bank to its customers, alerting them to its new online shopping rules, as well as advising them to change their personal identification number, or PIN, as soon as possible.

Credit cards have not been affected.

Closing the loophole

All this stems from a directive issued by the Qatar Central Bank in November, reminding local financial institutions of an existing ban on the use of debit cards for online purchases. But apart from the brief text messages sent to customers, there doesn’t appear to have been any widespread public announcement or notice of the rules.

That’s left some puzzled about the apparent sudden policy change, even though the restriction had actually been in place for some time.

According to central bank officials, the government restricts the use of debit cards to transactions where the customer must enter a PIN to authorize the purchase.

However, Abdul Hadi Ahen, the acting director of banking, payments and settlements systems department at the Qatar Central Bank, told Doha News last month that some banks were routing transactions through payment processing systems outside Qatar that don’t require PIN authorization – presumably through Visa and Mastercard.

The recent directive, he said, closed this loophole and tightened security. Ahen declined to say how many cases of banking fraud have recently come to his attention.

It’s difficult to accurately estimate the size of the problem because banks generally don’t disclose incidents for fear of damaging their brand. But in recent months, frequently reported cases of bank cards being suddenly deactivated and replaced has some questioning the prevalence of debit card fraud here.

Experts, however, previously told Doha News that apart from the relative wealth of its citizens, Qatar is no more of a target for crooks than other countries.

IBAN

Amid the online shopping restrictions and fraud prevention measures, the country’s banks recently announced some good news for residents who transfer money internationally.

Qatar Central Bank will start applying the International Bank Account Number, or IBAN, to all outward and inward remittances that come from and to Qatar starting Jan. 1, according to the Commercial Bank of Qatar.

IBAN is an international standard for identifying bank accounts. Its introduction should lead to faster and more accurate processing of money transfers.