Middle East and Africa Payments Market - Growth, Trends, COVID-19 impact, and Forecasts (2022 - 2027)

The Middle East and Africa Payments Market is Segmented by Point of Sale (Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards), Digital Wallet (includes Mobile Wallets), Cash and Others), Online Sale (Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards), Digital Wallet (includes Mobile Wallets), Others (includes Cash on Delivery, Bank Transfer, and Buy Now, Pay Later)), By End-user Industry (Retail, Entertainment, Healthcare, Hospitality, Other End-user Industries), and By Country (South Africa, United Arab Emirates, Saudi Arabia, and Rest of MEA)

Market Snapshot

Middle East and Africa Payments Market
Study Period: 2020-2027
Base Year: 2021
CAGR: 16.2 %

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Market Overview

Consumers in the Middle East and Africa are increasingly switching to contactless and electronic payments and continue to move away from cash use. The main reason for this change is the incredible speed at which payment technology is evolving in the Middle East and Africa. The market is expected to grow at a CAGR of 16.2% during forecast period (2022 - 2027).

  • As the global economy has evolved fast, mobile phones (particularly smartphones) have become vital to each individual's life. Furthermore, the internet has become an integral part of most people's daily lives worldwide. As a result, the number of smartphone and internet users has increased dramatically worldwide, resulting in a significant expansion of the payments industry.
  • In January 2022, Telkom, a South African wireline and wireless telecommunications provider, announced that Telkom Kenya had launched an app for its mobile money product, T-Kash. T-Kash App is an easy-to-use application that will enable its customers to access a wider service offering on its digital financial services platform.
  • According to Worldpay, as of 2020, cash was the most prevalent payment option for POS transactions in the Middle East and Africa (MEA), accounting for 52.6% of all POS transactions. Credit and debit cards came in second and third, with 16.6% and 10.6% of the market share in the same year. Cash is expected to be the most popular payment method by 2024. Digital wallets, including mobile money, will see large growth in use, with a share of 8.3% in 2020 rising to 16.8% in 2024.
  • The mobile payments market is expected to develop over the projected period, owing to the growing acceptance of the M-commerce sector, which involves online commercial transactions using wireless devices such as smartphones.
  • Furthermore, M-commerce allows consumers to trade from anywhere as long as wireless internet is available. Google and Apple, for example, have already launched their mobile shopping systems. Customers may make in-store purchases quickly using digital wallets like Apple Pay and Google Pay instead of swiping their cards.
  • Prepaid cards have considerably increased use as a cash substitute across Middle East and Africa. The rise in technology-driven products and services is driving the popularity of prepaid card payment options in this region. Furthermore, governments in the region are urging customers to utilize cashless payment methods such as digital and mobile wallets, boosting the use of prepaid cards in the region.
  • The Covid-19 outbreak has resulted in a substantial shift in payment practice, including reducing cash payments, moving from in-store to online payment options, and adopting rapid settlements. These changes have opened up new possibilities for payment providers in Singapore.

Scope of the Report

The payments market is segmented by two modes of payment - POS and e-commerce. E-commerce payments include online purchases of goods and services such as purchases made on e-commerce websites and online booking of travel and accommodation. However, it does not include online purchases of motor vehicles, real estate, utility bill payments (such as water, heating, and electricity), mortgage payments, loans, credit card bills, or purchases of shares and bonds. As for POS, all transactions that occur at the physical point of sale are included in the market scope. It includes traditional in-store transactions and all face-to-face transactions regardless of where they take place. Cash is also considered for both cases (cash-on-delivery for e-commerce sales).

By Mode of Payment
Point of Sale
Card Payments (Includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)
Digital Wallet (Includes Mobile Wallets)
Cash
Others
Online Sale
Card Payments (Includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)
Digital Wallet (Includes Mobile Wallets)
Others (Includes Cash on Delivery, Bank Transfer, and Buy Now, Pay Later)
By End-user Industry
Retail
Entertainment
Healthcare
Hospitality
Other End-user Industries
By Country
South Africa
United Arab Emirates
Saudi Arabia
Rest of MEA

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Key Market Trends

Digital adoption is Accelerating the Payments Market in Middle East and Africa

  • According to GSMA, one in three mobile money providers in the Middle East and Africa that offer a smartphone app sees 20% or more of their active client base transactions through the app. A growing number of deployments in the Middle East see over half of the transactions completed through smartphone apps.
  • Since 2020, the Middle East and Africa's online payment industry has accelerated. The COVID-19 pandemic was one of the key factors. Because digital payments are fast, safe, and contactless, consumers in this region were open to adopting them and even exploring new ones like bitcoin, biometrics, QR codes, and others.
  • Paytabs supports multiple payment processes across Middle Eastern and North African regions, allowing businesses to conduct digital transactions and receive payment from clients. The organization processes transactions in 168 currencies across 49 industries and offers a variety of payment alternatives, including MasterCard and Visa card schemes.
  • In the United Arab Emirates, banks are forming relationships with digital payment companies to provide virtual "buy now, pay later" prepaid cards. For instance, in September 2021, Abu Dhabi Islamic Bank (ADIB), an Islamic financial institution, joined Spotii, a digital payments platform, to introduce the UAE's first virtual BNPL prepaid card.
  • As of 2020, the Middle East and North Africa (MENA) rapid commerce (or q-commerce) market was worth 9 billion dollars. According to the prediction of Blink Co Technologie, the market would rise by 24% between 2020 and 2024, reaching a total value of USD 20 billion. In 2019, the MENA area had over 200 million digital shoppers.
  • Innovation is the norm in Africa's evolving payment ecosystem. From the rise of telco-led mobile money to the growth of automation across the business, the continent has undergone enormous shifts in the last two decades, according to Ecobank's head of consumer payments.
  • Cryptocurrencies and blockchain technology are exploding in emerging markets like Nigeria. In addition, a rise in venture capital investment in Africa enables entrepreneurs to take advantage of payment opportunities while improving user experience and lowering friction.
Middle East and Africa Payments Market

Retail Industry to Drive Market Growth

  • Marketforce, an African B2B commerce firm, has raised USD 40 million in a Series-A fundraising round to expand its team and platform for retail distribution of consumer goods and digital financial services in Africa. The funds will be used to avail buy now, pay later (BNPL) services to enable retailers to obtain credit for fast-moving consumer goods (FMCGs) and grow into new markets.
  • Consumer behavior is transforming the payments market. Cashless economies, mobile banking, fast payments, digital commerce, and regulatory agencies' expanding influence are just a few trends affecting the payments business.
  • Consumers benefit from shorter lines, the elimination of cash-on-hand issues, and faster-moving lineups since contactless payments make the payment process smoother and more convenient.
  • According to the Central Bank of Saudi Arabia, retail e-payments will exceed the Saudi Vision objective in 2021. The Financial Sector Development Program, FSDP, one of the core programs of Saudi Vision 2030, set a target of 55% for electronic payments in retail. By the end of 2021, more than a million Point of Sale terminals had been installed, compared to 721,000 terminals in 2020.
  • In addition, contactless payments accounted for 95% of all PoS transactions in 2021, among other electronic payment methods such as e-commerce, 'SADAD' system payments, and the new Instant Money Transfer through the 'Sarie' system, among others.
Middle East and Africa Payments Market

Competitive Landscape

The Middle East and Africa payments market is moderately concentrated. The competitive rivalry in the market is moderate. Due to several companies operating in the market, firms must keep innovating their products to gain a sustainable competitive edge over their rivals and provide product differentiation.

  • May 2022 - OPay and Mastercard have joined forces to drive financial inclusion by increasing digital commerce throughout the Middle East and Africa. Also, MarketFinance's initiative to lend USD 125 million to small businesses in the United Kingdom has been backed by Deutsche Bank, and SmartCash Payment Service Bank is working to reach unbanked customers in Nigeria.
  • February 2022 - Lipa Payments, a South African FinTech firm, is bringing its Tap to Pay service to Africa's "informal" sectors via its software platform, allowing businesses to accept contactless payments from a mobile phone. In Nigeria and South Africa, the business is ready to introduce its digital payment system. The Lipa platform allows banks and FinTechs to provide consumers contactless phone-to-phone payments without requiring merchants to purchase POS hardware.

Recent Development

  • June 2022 - The London Internet Exchange (LINX), one of the world's largest internet exchange points (IXPs), has announced a strategic partnership with IXAfrica, a Nairobi-based hyperscale data center provider. As part of the agreement, LINX will open a new interconnection facility in Nairobi, marking the company's first physical presence on the African continent.
  • August 2021 - Visa was the first firm in Sudan to introduce digital payments. It is currently collaborating with eight licensed partners to extend the benefits of payment technology to everyone, including cardholders and retailers.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definitions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Stakeholder Analysis

    3. 4.3 Industry Attractiveness-Porter's Five Force Analysis

      1. 4.3.1 Bargaining Power of Suppliers

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Threat of New Entrants

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

    4. 4.4 Evolution of the payments landscape in the region

    5. 4.5 Key market trends pertaining to the growth of cashless transaction in the region

    6. 4.6 Impact of COVID-19 on the payments market in the region

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 Digital adoption is Accelerating the Payments Market in Middle East and Africa

      2. 5.1.2 Key Retailers and the Government are Promoting Market Digitization Through Activation Programs

      3. 5.1.3 Increase in Real-Time Payments, Particularly Buy Now Pay Later

    2. 5.2 Market Challenges

      1. 5.2.1 E-Commerce Scams Across the Region

    3. 5.3 Market Opportunities

      1. 5.3.1 Move towards Cashless Society

      2. 5.3.2 New Entrants to Drive Innovation Leading to Higher Adoption

    4. 5.4 Key Regulations and Standards in the Digital Payments Industry

    5. 5.5 Analysis of Major Case Studies and Use-Cases

    6. 5.6 Analysis of Key Demographic Trends and Patterns Related to Payments Industry in the Region (Coverage to include Population, Internet Penetration, Banking Penetration/Unbanking Population, Age & Income etc.)

    7. 5.7 Analysis of the Increasing Emphasis on Customer Satisfaction and Convergence of Global Trends in the Region

    8. 5.8 Analysis of Cash Displacement and Rise of Contactless Payment Modes in the Region

  6. 6. Market Segmentation

    1. 6.1 By Mode of Payment

      1. 6.1.1 Point of Sale

        1. 6.1.1.1 Card Payments (Includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)

        2. 6.1.1.2 Digital Wallet (Includes Mobile Wallets)

        3. 6.1.1.3 Cash

        4. 6.1.1.4 Others

      2. 6.1.2 Online Sale

        1. 6.1.2.1 Card Payments (Includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)

        2. 6.1.2.2 Digital Wallet (Includes Mobile Wallets)

        3. 6.1.2.3 Others (Includes Cash on Delivery, Bank Transfer, and Buy Now, Pay Later)

    2. 6.2 By End-user Industry

      1. 6.2.1 Retail

      2. 6.2.2 Entertainment

      3. 6.2.3 Healthcare

      4. 6.2.4 Hospitality

      5. 6.2.5 Other End-user Industries

    3. 6.3 By Country

      1. 6.3.1 South Africa

      2. 6.3.2 United Arab Emirates

      3. 6.3.3 Saudi Arabia

      4. 6.3.4 Rest of MEA

  7. 7. Competitive Landscape

    1. 7.1 Company Profiles

      1. 7.1.1 Interswitch Ltd

      2. 7.1.2 Jumia

      3. 7.1.3 Network International Holdings Plc

      4. 7.1.4 Opay

      5. 7.1.5 PalmPay Technology Co Ltd

      6. 7.1.6 Paytabs

      7. 7.1.7 Safaricom Plc

      8. 7.1.8 Visa Inc

      9. 7.1.9 Apple Inc

      10. 7.1.10 Amazon.com, Inc.

    2. *List Not Exhaustive
  8. 8. Investment Analysis

  9. 9. Future Outlook of the Market

**Subject to Availability

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Frequently Asked Questions

The Middle East and Africa Payments Market market is studied from 2020 - 2027.

The Middle East and Africa Payments Market is growing at a CAGR of 16.2% over the next 5 years.

Interswitch Ltd, Jumia, Network International Holdings Plc, Opay, PalmPay Technology Co Ltd are the major companies operating in Middle East and Africa Payments Market.

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