The MENA region is undergoing rapid and significant development right now. With a population approaching 600 million, the diverse region has made a name for itself with impressive infrastructure projects and a thriving tourism sector.
GCC countries such as Saudi Arabia and the United Arab Emirates (UAE) are considered some of the highest-potential economies for the coming years, and we’re seeing technological innovation pouring out of the region.
All of these factors are driving changes to the payments ecosystem, especially mobile payments, in the MENA region. This is helped along by the fact that visitors from abroad are using less cash and may already be familiar with contactless or online payment methods. Meanwhile, businesses that operate internationally need to make cross-border payments quickly, efficiently, and without exorbitant fees.
A Snapshot of Mobile Payments in MENA
When we look at payments systems across the Middle East and North Africa, it’s a fragmented picture. We have countries like Egypt where the largely unbanked population still relies heavily on cash. Turkey and Saudi Arabia have been in a similar position, although the landscape is starting to change as more people are turning to card payments and mobile transactions. At the opposite end of the scale, we have the UAE, where awareness of contactless and digital payment systems is high, as is consumer trust. 73% prefer paying by card over cash, and many who don’t yet use these technologies are open to doing so as they get the opportunity.
Regardless of these differences, there is widespread agreement that it’s important for the region to find ways to make the population less dependent on cash. The relatively large proportion of unbanked people is an obstacle to this, but with 86% of men and 75% of women owning a mobile phone, that obstacle is far from insurmountable.
As a result, we’re seeing organizations like The ADGM Digital Lab creating virtual environments where financial entities, governments, startups, and corporations can collaborate on new payment solutions. Others are working on open banking APIs to facilitate financial transactions across the MENA region.
Meanwhile, demand is growing for mobile and app-based payments. Companies large and small are responding; in recent months we’ve seen WhatsApp banking launching in the UAE and Bahrain, for example.
Qatar is another country leading the way in MENA’s mobile payments sector. Its youthful, tech-savvy population with high levels of disposable income has contributed to a booming eCommerce market, estimated at $1.5 billion in 2019. Across the MENA region, eCommerce was expected to grow by 21.4% in the same year.
Types of Mobile Payment
This shift in demand has not only stirred up new solutions from online companies but has pushed traditional banks to expand their range of online and mobile payment options. Although cash and credit cards still account for the majority of payments across the MENA region, we are seeing year-on-year increases in alternative payment methods including:
- Peer-to-peer payments using smartphones
- Contactless payments via mobile
- Mobile wallet payments through mobile apps
- Mobile and online bill payments
Near Field Communication (NFC) and QR matrix bar code technology have played a big part in enabling mobile payments in MENA countries, especially in places like Qatar and UAE which are leading the way technologically at the moment.
The Future of Mobile Payments in MENA
The MENA region is ideally placed for rapid innovation in the digital payments sphere. High mobile penetration rates and young, tech-savvy consumers with disposable income are driving demand. As with much of the rest of the world, convenience is key — and mobile devices are clearly the most convenient place for these consumers to shop, pay bills and manage their finances.
In MENA countries where a large percentage of the population is unbanked, especially women, mobile payments can open up the way to greater equality. It’s becoming possible to bypass traditional banks altogether, and people are using this technology to enhance their lives and livelihoods.
Businesses will naturally want to adopt these payment solutions to keep up with consumer demand, and so it’s essential to have a solid underlying infrastructure that enables mobile payments to be made quickly and securely. Without this, consumer trust may falter and set the whole industry back.
Dibsy is revolutionizing the way business owners can accept payments in the MENA region. Starting its operations in Qatar, business owners with or without an online presence can accept payments from their customers on mobile and SMS, email, or social media.