Don't they say that disasters bring about social change? This rule sure applies to digital payments and e-wallets given the huge changes it has witnessed during the COVID-19 pandemic.
Even though e-wallets and Fintech emerged several years before the pandemic, the latter has sure accelerated both interest and accessibility to its services everywhere.
Source: Twitter
Whether it is the acute need for contactless purchases of the simplest and most basic needs or the security that accompanied an influx of applications and services, digital payments have been never been this popular.
Examining the scope of growth when it comes to digital payment systems in the Middle East and North Africa, it is not enough to look around to see how many more people talk about their favorite services. We will rather look into the numbers and ask ourselves: how long more will cash be a thing?
What is behind the Digital Payments Boom in the Middle East?
According to MENA Fintech Association's SHIFT report which was released in March 2022, non-cash payments accounted for only 45% of Transaction volume in 2018. Yet, the percentage is expected to hit 69% next year.
"Even before the pandemic, digital payments were growing rapidly. The number of consumer digital payments transactions in the United Arab Emirates (UAE) grew at an annual rate of more than 9% between 2014 and 2019, compared with Europe’s average annual growth of 4 to 5%. Even more starkly, Saudi Arabia observed astronomical growth in card payments: over 70% between February 2019 and January 2020. This acceleration has been fueled by several drivers accelerated by the COVID-19." - SHIFT
A study carried out by the Saudi Central Bank pointed out that a whopping 94% of bill payments completed during 2021 in Saudi Arabia were cashless ones when measured by value.
What is behind the MENA digital payment boom?
1- Young, more educated, and a tech-savvy population that led to jumps in internet access. By 2020, 65% of the region's population had regular access to mobile phones and consequently, the internet.
2- The number of trust fintech in the region from only 44 in 2013 to 358 in 2020, 46% of which in 2018 was based in the UAE.
Fintech startups in the MENA region have also proved growing trust by investors as they were able to raise $135 million in 2020, consequently leading to expansion of operations and growing popularity.
3- Govt. regulations facilitating a bigger volume of cashless payments in addition to the developments seen in the region's digital infrastructure. In several countries in the region, paying electric and water bills has become only a few clicks away.
4- Faster and more secure money transfer online services used by millions of people in the region, where remittances are considerable contributors to local economies. The UAE and Saudi Arabia alone handled $78 billion of remittances in 2020.
5- Growing interest in online purchases, thanks to the bigger-than-ever e-commerce industry.
Finally, if we were to talk about the biggest players in the region when it comes to facilitating digital payments, we ought to mention Saudi's Mada, PayTabs, the UAE's Souqalmal, Bayzat, Beehive, and Jordan's MadfooatCom and liwwa.
