The best new financial products for SMEs in the UAE
Banks are increasingly targeting small and medium-sized enterprises with debit cards, credit cards and corporate accounts
Small and medium-sized enterprises make up around 98 per cent of businesses in the UAE and their contribution to the country’s gross domestic product is estimated at 53 per cent. With figures like these from AIM Start-up, a UAE Ministry of Economy initiative, and Wam it is no wonder banks are increasingly targeting SMEs with their financial products.
“SMEs have always been the backbone of the UAE economy,” says Mohsin Aikal, head of liabilities, payments & bancassurance at Noor Bank. “As our strategy, we believe this is an important segment for us to be in.”
We wanted to go beyond just a vanilla proposition for our SMEs.
Mohsin Aikal, Noor Bank
While traditional business debit and credit cards come with higher transaction and withdrawal limits, and often tighter security, financial institutions are now adding a host of other benefits to their products to specifically attract SMEs. For example, last month Noor Bank and First Abu Dhabi Bank rolled out MasterCard’s ‘world’ debit card for SMEs.
“We wanted to go beyond just a vanilla proposition for our SMEs,” says Mr Aikal. “Last year we came up with a full ecosystem of benefits for our clients — things you wouldn’t typically associate with a bank. So we went beyond financial services — things like tie-ups with PRO services, recruitment agencies … things that we believe an SME in their day-to-day life would require.”
MasterCard’s new debit card gives small and medium-sized business owners a payment tool to “help with purchases, manage cash flow, simplify tax preparation and keep an eye on the bottom line,” according to the payment technology company’s website.
But the card also comes with discounts on SME insurance through Axa, DHL shipping, Hertz car rentals, Careem rides and shopping at OfficeRock.com. For greater security, it comes with a corporate liability waiver that protects companies against unauthorised use of the card by employees up to a maximum annual amount of $25,000 (Dh91,830) per cardholder and $1.6 million per company.
However, it is important to be aware of the requirements needed for corporate cards and accounts, including minimum years in business and minimum turnover. Business cards often have a higher eligibility bar than consumer cards, and usually need to be applied for in person, rather than online. The credit and debit cards may have annual fees and be available for existing customers only or for certain customer segments. Like any banking product, repayments must be made on time to avoid high late payment penalties.
Here is a selection of the best new financial products for SMEs.
• Noor Bank World Debit Corporate Card
Noor Bank’s debit card, which is Sharia-compliant, is only for Link Premium and Link Infinite customers. Link Premium accounts require a minimum monthly average balance of Dh350,000 and there is a Dh500 penalty if you don’t maintain that balance. Link Infinite accounts require a higher minimum monthly average balance of Dh1m and non-maintenance of that amount will result in a Dh600 penalty.
Noor Bank offers its SME card holders a daily withdrawal cash limit of Dh50,000, in comparison to a typical consumer debit card, which ranges between Dh10,000 to Dh20,000.
Through MasterCard’s “go business plus” programme, the card offers discounts on services, like IT support with geeks.ae, recruiting with oliv.com and corporate training with AP Partners. Leisure and hospitality discounts include 15 per cent off at Jumeirah hotels and zero money down on a Nespresso machine.
• FAB World Business Debit Card
First Abu Dhabi Bank has a choice of three business accounts: a business basic account for a minimum average balance of Dh50,000, a business advantage account for Dh250,000 and a business preferred account for a Dh500,000 minimum average balance.
FAB’s debit card offers the same discounts as Noor Bank through MasterCard. The card is also touted for its security with double-authenticated ‘chip and PIN’ transactions and convenience with contactless payments — although this is a feature of many consumer cards as well.
Vikas Thapar, head of the business banking group at FAB, said in a statement that "with SMEs being such an important part of the UAE’s economy" the card offers the "financial flexibility entrepreneurs need".
• Emirates NBD Business Banking Debit Card
With Emirates NBD’s Visa Signature Debit Card, businesses can make purchases up to a daily limit of Dh75,000 and withdrawals up to Dh50,000 at home or abroad. The card includes security features, such as purchase protection covering theft or accidental damage of articles. Travel insurance covering the cardholder, spouse and up to five children is also included.
Discounts include up to 35 per cent off Avis car rentals, up to 25 per cent off meet and assist services at more than 450 airports, up to 30 per cent off the bill at 2,000 restaurants in the UAE and up to 50 per cent off at over 800 partner restaurants in Europe.
• CBD My Business Credit Card
To qualify for this card from Commercial Bank of Dubai, a business must have a minimum annual turnover of Dh2m and have operated for at least two years. It is open to owners and nominated staff members for all registered business entities in the trading, manufacturing, professional or service sectors. The applicant must demonstrate a six-month relationship with CBD or another bank, indicating maintenance of a minimum bank account balance of Dh25,000.
The card is free for life for both principal and supplementary cardholders and has a maximum credit limit of up to Dh100,000. It provides access to a credit line at an interest rate of 2.99 per cent per month on the outstanding amount for cash and purchases, and an interest-free grace period of 53 days. Be aware that additional charges apply. For example, there is a cash advance handling fee of 3 per cent or Dh100 (whichever is higher) per transaction.
Other benefits include up to 1.3 per cent rebates on qualifying purchases, which can be redeemed either as Emirates Skywards miles or as cash back.
• Mashreq Platinum Business Credit Card
This card also carries no annual fee and up to 99 supplementary cards can be issued to staff. Businesses must have a minimum revenue of Dh1.5m and have been in business for two years. It offers 1.25 per cent cash back on domestic retail spends and 2.5 per cent cash back on international retail spends to a maximum of Dh1,000 per month. As with Mashreq bank's consumer cards, it comes with discounts on travel, dining and airport lounges.
• ADCB Business First
Abu Dhabi Commercial Bank offers packages for SMEs called “Business First” for a monthly membership fee. The cheapest package Business Essential starts at Dh262.50 per month and offers benefits such as free corporate salary transfer and free wages protection system. The Essential Plus package comes at Dh525 monthly, the Executive at Dh840 and the Executive Plus at Dh1,732.50.
As the membership fee increases, the benefits increase. An Annual Savings Meter table on ADCB’s website estimates savings with each package. For example, the Executive Plus package can save businesses nearly Dh14,000 with a free cash pickup facility and Dh2,000 with free cheque printing.
Updated: June 20, 2019 10:04 AM