|Study Period:||2018 - 2026|
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The Middle East & North Africa Digital Payments Market is expected to grow at a CAGR of 15.39% over the forecast period (2021-2026). According to a study from the London-based payment systems company, Checkout.com, stubborn cash usage could fall in the Middle Eastern region, after an acceleration in the uptake of digital payments amid the COVID-19 pandemic.
The study, which hinges on the regional survey of over 5000 consumers in the UAE, Saudi Arabia, Egypt, Bahrain, Jordan, Qatar, Kuwait, and Pakistan, found that 47% of consumers are likely to shop online more frequently over the next year. Such trends are expected to boost the adoption of digital payment solutions in the region.
- Over time, the digital payment industry has recorded robust growth, with new providers, new platforms, and new payment tools being launched in the region. The growth in mobile phone penetration in the region is anticipated to pave the path for the digital payments market in the region significantly. The mobile market in the region is expected to reach various milestones over the next five years, with half a billion mobile broadband connections by 2021, more than half of the population subscribing to mobile internet services by 2023, and about 700 million mobile connections by 2025.
- Many countries have been joining the real-time payments scene due to the benefits these systems offer. Interest in real-time payments has been particularly robust in the Middle East region, where numerous faster payments initiatives have gone live or are nearing their debuts. Certain Middle Eastern governments are actively working to encourage the shift away from cash. For instance, Saudi Arabia aims to have 70% of the nation’s transactions handled digitally by 2030.
- Further, in the region, mobile financial services' transformation has been witnessed through payment methods such as Careem Pay in the UAE. For instance, Saudi Arabia's telecommunications company, launched a digital wallet app, STC Pay, which allows people to send money to other users and pay restaurants and stores digitally.
- Additionally, a few of the e-commerce platforms have been collaborating with banks to encourage digital payments. For instance, in July 2020, Oman Air and BankDhofar partnered to launch an e-commerce Payment Gateway platform, which will enable the airline's customers to process their bookings online using their debit cards and receive instant responses of the payment transactions.
Scope of the Report
Digital payment is a way of payment, which is made through digital modes. In digital payments, the payer and payee both use digital modes to send and receive money. It is also called electronic payment. No hard cash is involved in digital payments. The scope of the report is comprehensive and limited to the Middle East & North Africa region.
|Rest of Middle East and North Africa (Iran, Bahrain, Qatar, Oman)|
Key Market Trends
High Proliferation of Smartphones and Social Interactions to Drive the Market Growth
- Smartphone adoption continues to grow rapidly in the region, and reached nearly 66% of total connections in 2020, in line with cheaper devices becoming more readily available. According to GSMA, the number of unique mobile subscribers in the Middle East and North Africa (MENA) region reached the 400 million mark during 2020, representing around 65% of the population.
- Many operators have introduced affordable smartphones with financing options to stimulate mobile broadband adoption. Over the next five years, there would be about 200 million additional smartphone connections in MENA, taking the total to 565 million by the end of 2025, at an adoption rate of almost 80%.
- A key factor that is boosting Saudi Arabia’s digital revolution is its astonishing rate of smartphone penetration. The country has the third-highest smartphone penetration rate globally with around 21 million smartphone users (in 2019, about 80.7% of the population used a smartphone), a number that is likely to increase to almost 24 million by 2022. According to the World Bank, the country is one of the wealthiest countries in the world in terms of spending power, and this combination of factors has contributed to the high penetration levels.
- Additionally, immediate payment services provide various benefits to consumers and businesses alike. Users can often access such payments systems through mobile apps that allow them to send money to recipients identified by their mobile phone numbers rather than their bank account details. Such services can satisfy consumers who want fast, easy ways to shop online as well as those who use their mobile phones to pay for friends or brick-and-mortar retailers. Such options can spare consumers from carrying cash or cards.
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Launch of Real-time Payment Systems in Key GCC and North African Countries to Drive the Market Growth
- As digital payment options continue to grow in popularity, an increasing number of businesses and consumers are expected to adopt these payments in the region. It is therefore crucial for the region to have an underlying real-time infrastructure in place to enable these payments to make it quick and effective.
- The launch of a real-time payment service provides the core infrastructure which supports a range of new banking and payment services. At a macro level, the introduction of such technology offers tangible benefits to a national economy by increasing liquidity and efficiency of the payments system, which in turn, will support the GDP growth and also reduce costs of doing business in the region and provide convenient secure access to payments systems for banked and unbanked consumers, businesses, and governments.
- Additionally, Multiple central banks in the region have been working to offer convenient, rapid transactions for businesses and consumers. And various countries in the region are debuting systems, but others have taken advantage of immediate payments systems for several years. For instance, Bahrain launched an immediate payments service in 2015 and has recently witnessed significant growth. The volume of transactions made through its network rose 657% year over year in 2020, and a study conducted in April –May (2020) found that the value of these payments had tripled by that point.
- The adoption of e-commerce has been proliferating this favors the use of digital payments due to the increased convenience and security compared to that when using cash. Further, government initiatives promoting the e-commerce platform's adoption is anticipated to aid the market for digital payments in the region.
- As the region is operating cross-border, and it requires smoother, cheaper, and quicker payment processes. Hence, launching such real-time payment system in the region is likely to increase and drive the market growth.
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The Middle East & North Africa digital payments market is moderately concentrated and dominated by a few major players like Paypal Holdings Inc., Alphabet Inc., ACI Worldwide Inc., Samsung Electronics Inc., and CIB Bank. These major players, with a prominent share in the market, are focusing on expanding their customer base across foreign countries. These companies are leveraging strategic collaborative initiatives to increase their market share and increase their profitability. However, with technological advancements and product innovations, mid-size to smaller companies are increasing their market presence by securing new contracts and by tapping new markets.
- April 2021 - Mastercard and Saudi fintech business Geidea formed a strategic partnership agreement to accept Mastercard payments for Tap on Phone solutions in Saudi Arabia, making it the first such agreement to be signed in the Middle East and North Africa. Geidea will roll out this contactless payment acceptance technology to enable businesses to use smartphones as payment acceptance devices.
- March 2021 - Fiserv Inc. signed a definitive agreement to acquire Pineapple Payments and continues to provide payment processing services to Pineapple Payments merchants, while enhancing its delivery of an array of customer-focused, innovative solutions.
ACI Worldwide Inc.
Paypal Holdings Inc.
Alphabet Inc. (Google Pay)
- March 2021 - Visa inc., in partnership with the global loyalty and rewards solutions provider, the ENTERTAINER business, launched the new experience with the ENTERTAINER app for its premium cardholders in the MENA region. The free to download app will enable Visa Platinum, Visa Signature, and Visa Infinite cardholders to enjoy a vast range of incredible deals until January 31, 2023.
- February 2021 - STC Pay partnered with the French technology provider Thales to introduce contactless cards into the Kingdom to enable payments at point of sales (POS) machines, e-commerce transactions, and cash withdrawals at local and international ATMs. The digitized and fully customizable cards will be compatible with Apple Pay and Mada Pay, allowing users to make secure transactions on both iPhone and Android platforms.
- November 2020 - Apple and Careem collaboration have allowed passengers to book cars using Siri. Careem, an app-based car booking service, announced a new strategic partnership with Apple whereby Careem users or “Careemers” can order a car ride in just seconds, through Siri. This will also give the users to easily pay for the rides through the Apple pay with the use of Siri.
Table of Contents
1.1 Study Assumptions and Market Definition
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Overview
4.2 Industry Value Chain Analysis
4.3 Industry Attractiveness - Porter's Five Forces Analysis
4.3.1 Bargaining Power of Suppliers
4.3.2 Bargaining Power of Consumers
4.3.3 Threat of New Entrants
4.3.4 Intensity of Competitive Rivalry
4.3.5 Threat of Substitutes
4.4 Market Drivers
4.4.1 High Proliferation of Smartphones & Social Interactions
4.4.2 Enablement Programs by Key Retailers to Bridge the Gap Between Physical and Digital World
4.4.3 Launch of Real-time Payment Systems in Key GCC and North African Countries
4.4.4 Increasing Emphasis on Customer Satisfaction and Convergence of Global Trends in the Region
4.5 Market Challenges
4.5.1 Operational Challenges Involving Cross-border Payments
4.5.2 Relative Lack of Digital Literacy in the Key Emerging Countries in the Region
4.6 Market Opportunities
4.6.1 Decline in Unbanked Population in the Region
4.6.2 New Entrants to Drive Innovation Leading to Higher Adoption
4.7 Key Regulations and Standards in the Digital Payment Industry
4.8 Impact of COVID-19 on the Market
4.9 Key base indicators
4.9.1 Digital literacy
4.9.2 Population Index
4.9.3 Strong Presence of Expatriate Workers
4.10 Major Case Studies and Implementation Use-cases
4.10.1 Entry of Kuwait Finance House, and Mashreq Bank
4.10.2 Dhofar into the Digital Payment Ecosystem
5. EVOLUTION OF THE PAYMENT LANDSCAPE IN MIDDLE EAST AND NORTH AFRICA
6. MARKET SEGMENTATION
6.1 By Country
6.1.1 Saudi Arabia
22.214.171.124 Analysis of the Payments Landscape in Saudi Arabia (Cash and Non-cash)
126.96.36.199 Digital Transaction Value and Total User Base (2019-2026)
188.8.131.52 Market Breakdown of Digital Transactions - mPOS and Digital Commerce
184.108.40.206 Major E-wallet Service Providers in Saudi Arabia
220.127.116.11 Impact of COVID-19 on the Saudi Payment Infrastructure
18.104.22.168 Market Outlook
22.214.171.124 Analysis of the Payments Landscape in Egypt (Cash and Non-cash)
126.96.36.199 Digital Transaction Value and Total User Base (2019-2026)
188.8.131.52 Market Breakdown of Digital Transactions - mPOS and Digital Commerce
184.108.40.206 Major E-wallet Service Providers in Egypt
220.127.116.11 Impact of COVID-19 on Egyptian Payment Infrastructure
18.104.22.168 Market Outlook
6.1.3 United Arab Emirates
22.214.171.124 Analysis of the Payments landscape in the United Arab Emirates (Cash and Non-cash)
126.96.36.199 Digital Transaction Value and Total User Base (2019-2026)
188.8.131.52 Market Breakdown of Digital Transactions - mPOS and Digital Commerce
184.108.40.206 Major E-wallet Service Providers in the United Arab Emirates
220.127.116.11 Impact of COVID-19 on the UAE Payment Infrastructure 6.3.6 Market Outlook
18.104.22.168 Analysis of The Payments Landscape in Turkey (Cash And Non-cash)
22.214.171.124 Digital Transaction Value and Total User Base (2019-2026)
126.96.36.199 Market Breakdown of Digital Transactions - Mpos and Digital Commerce
188.8.131.52 Major E-wallet Service Providers in Turkey
184.108.40.206 Impact Of COVID-19 on the Turkish Payment Infrastructure
220.127.116.11 Market Outlook
18.104.22.168 Analysis of the Payments Landscape in Morocco (Cash And Non-cash)
22.214.171.124 Digital Transaction Value and Total User Base (2019-2026)
126.96.36.199 Market Breakdown of Digital Transactions - Mpos and Digital Commerce
188.8.131.52 Major E-wallet Service Providers in Morocco
184.108.40.206 Impact of COVID-19 on the Moroccan Payment Infrastructure
220.127.116.11 Market Outlook
6.1.6 Rest of Middle East and North Africa (Iran, Bahrain, Qatar, Oman)
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles*
7.1.1 Paypal Holdings Inc.
7.1.2 Samsung Corporation
7.1.3 ACI Worldwide Inc.
7.1.4 CIB Bank
7.1.5 Alphabet Inc. (Google Pay)
7.1.6 Apple Inc.
7.1.7 Fiserve Inc.
7.1.9 Mastercard (MasterPass)
7.1.10 Visa Inc.
7.1.11 Saudi Digital Payment Company
7.1.12 Denarii Cash
8. INVESTMENT ANALYSIS
9. MARKET OPPORTUNITIES AND FUTURE TRENDS
Frequently Asked Questions
What is the study period of this market?
The MENA Digital Payments Market market is studied from 2018 - 2026.
What is the growth rate of MENA Digital Payments Market?
The MENA Digital Payments Market is growing at a CAGR of 15.39% over the next 5 years.
Who are the key players in MENA Digital Payments Market?
ACI Worldwide Inc., Paypal Holdings Inc., Samsung Corporation, Alphabet Inc. (Google Pay), CIB Bank are the major companies operating in MENA Digital Payments Market.