Market Trends of Middle East and Africa Payments Industry
This section covers the major market trends shaping the MEA Payments Market according to our research experts:
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.
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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.
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