Arabian Post Staff
A white paper on digital payments titled ‘What’s Next for Digital Payments in the Middle East and North Africa’ notes that there is an instant payment ‘revolution’ taking place in the UAE.
According to the paper, the overall digital payments market in the UAE is expected to increase at a compound annual growth rate (CAGR) of 18.3%; 13.6% in the KSA; and 19.6% in Egypt.
Looking closely at each of the key countries, findings showed that there was an instant payment “revolution” in the UAE; expansion in digital banking in the KSA; and a boost in online retail in Egypt due to increasing smartphone penetration rates.
In KSA, 89% of consumers reported using at least one new payment method in the past year, including options to buy now, pay later and person-to-person transfers. In Egypt, digital payments were found to promote financial inclusion with penetration of prepaid cards and mobile wallets approaching 40% of the adult population.
Consumers born between the late 1990s and early 2010s are the driving force for digital payments, thriving on innovation, convenience and seamless experiences. However it is the Millenials, who are those born between 1981 and 1996, who have the highest spending power.
The research shows that 51% of Generation Z in the UAE use digital or mobile wallets for daily payments, compared to 48% in KSA, and 43% in Egypt. Moreover, 20% of UAE respondents reported a decline in cash usage, with 50% of Generation Z respondents confirming that they exclusively use cards for transactions.
Three key pillars emerged through the research to define digital payment trends—namely, collaborative governance; the rise of the borderless marketplace; and increasing financial inclusion.
The research found nine key payment themes occurring in the present which could influence the future of payments in the region: omni-channel payments; peer-to-peer payments; in-app payments; buy now, pay later options; instalments; merchant lending; super apps; cross-border shopping; and instant payments.
Amazon Payment Services enables payments on Amazon stores in the MENA region including Amazon.ae, Amazon.sa and Amazon.eg; in addition to supporting thousands of other merchants and businesses across the region.
Also published on Medium.
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