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Market Research Report

Middle East & North Africa Digital Payments Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

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Middle East & North Africa Digital Payments Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)
Published: January 1, 2021 Content info: 120 Pages
Description

The Middle East & North Africa digital payments market is expected to grow at a CAGR of 13.3% over the forecast period (2021-2026). 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. According to GSMA, the Middle East & North Africa (MENA) are expected to witness the fastest subscriber growth rate across the globe after Sub-Saharan Africa, growing to 459 million unique mobile subscribers, which increased from 318 million in 2018.
  • The internet penetration rate has been recording healthy growth over the past few years, and it is expected to continue traversing the same trajectory, owing to increasing investments by internet service providers in the region. In Qatar, 75% of the population has a mobile phone, and it is 73% in the UAE, and 60% in Saudi Arabia.(World Bank Estimates)
  • 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.
  • Similary, in June 2020, Careem, the Dubai based ride hailing company, entered into a partnership with Visa to expand digital payments. The agreement is expected to accelerate cashless payments and digital banking across the Middle East and North Africa, the companies announced Under the terms of the deal, Visa is integrated into the Careem Pay Super App, which will provide Careem drivers, known as Careem captains, access to payments and funds.
  • With the recent outbreak of COVID-19 transactions across businesses observe a significant decline In contrast, digital payments are witnessing consumer propensity toward its use due to the nature of non contact based transactions and convenience offered during the lockdown period.

Key Market Trends

High Proliferation of Smartphones and Internet Penetration to Drive the Market Growth

  • The global mobile connections surpassed the global population mark. For instance, according to the GSMA, the global mobile connections in 2019 stood at 8.98 billion, and it is increasing significantly with prominent growth rates in the Middle East and North Africa.
  • In the Middle East and North Africa, one in three mobile money providers that offer a smartphone app is seeing 20% or more of their active customer base transacting through the app, and a growing number of deployments in the Middle East see over half of the transactions performed through smartphone apps.
  • A recent survey from MasterCard indicates that digital payments in the Middle East may increase rapidly with over 70% of respondents in the survey stating that they were willing to use mobile phones to make payments. The shift to mobile could also have a tremendous economic impact, as studies have shown that the Middle East could add USD 95 billion to GDP by 2020.​
  • Additionally, Jingle Pay, a Dubai-based digital banking fintech, is set to launch its digital wallet services in the United Arab Emirates (UAE) in 2020. The start-up is in the process of applying for licences in the UAE, Indonesia and the Philippines, as currently none of these countries' regulations allow fintechs to become fully fledged banks. The company is aiming to tap the millennial and Gen Z consumer brands, which demands responsive services at extremely low transfer fees with no restrictions such as minimum balance requirements.
  • Similary, in March 2020, after securing approval from the "Bank Al Maghrib", Orange Morocco had announced the launch of Orange Money in the country. This service is expected to allow Moroccans to make mobile payments and transfer money using their mobile devices.

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.
  • The recent launch of real-time payments in Saudi Arabia is serving as a catalyst for the adoption of real-time payments amongst other countries in the region. This may benefit financial institutions (FIs), merchants, consumers, and society by offering enhanced visibility into payments, by enabling better cash management and helping businesses better manage day-to-day operations by improving liquidity.
  • 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.

Competitive Landscape

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. Some of the key developments in the market are:

  • July 2020 - ACI Worldwide, a global provider of real-time electronic payment and banking solutions, signed a strategic partnership with Arvato Financial Solutions to combat the rising levels of eCommerce fraud during the Covid-19 crisis. As part of the collaboration, ACI is offering Arvato Financial Solutions' best-in-class Manual Order Review service to all its merchant fraud customers. The solution enables merchants across all sectors to further optimize their fraud management performance.
  • January 2020 - Visa Inc. company collaborated with Samsung to bring Tap to Phone technology to global businesses. The partnership mainly focuses on product innovation and expansion of their offering. Tap to Phone makes it easy for sellers to use Android smartphones to accept payments without any additional hardware where millions of sellers everywhere will be able to accept contactless payments using a current-generation mobile device.

Reasons to Purchase this report:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support
Table of Contents
Product Code: 69797

TABLE OF CONTENTS

1 INTRODUCTION

  • 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 Substitute Products
  • 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
    • 4.4.3 Launch of real-time payment systems in key GCC and North African countries
    • 4.4.4 Growing 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| 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 - BY COUNTRY

  • 6.1 Saudi Arabia
    • 6.1.1 Analysis of the Payments Landscape in Saudi Arabia (Cash and Non-cash)
    • 6.1.2 Digital Transaction Volume and Total User Base (2019-2025)
    • 6.1.3 Market Breakdown of Digital Transactions - mPOS and Digital commerce
    • 6.1.4 Major E-wallet Service Providers in Saudi Arabia (BayanPay, HalalaH, STC, etc.)
    • 6.1.5 Impact of COVID-19 on the Saudi Payment Infrastructure
    • 6.1.6 Market Outlook
  • 6.2 Egypt
    • 6.2.1 Analysis of the Payments landscape in Egypt (Cash and Noncash)
    • 6.2.2 Digital Transaction Volume and Total User Base (2019-2025)
    • 6.2.3 Market Breakdown of Digital Transactions - mPOS and Digital Commerce
    • 6.2.4 Major E-wallet Service Providers in Egypt - (QNB Al-Ahli, CIB, UB, Audi2Pay, etc.)
    • 6.2.5 Impact of COVID-19 on Egypt Payment Infrastructure
    • 6.2.6 Market Outlook
  • 6.3 United Arab Emirates
    • 6.3.1 Analysis of the Payments landscape in UAE (Cash and Noncash)
    • 6.3.2 Digital Transaction Volume and Total User Base (2019-2025)
    • 6.3.3 Market Breakdown of Digital Transactions - mPOS and Digital commerce
    • 6.3.4 Impact of COVID-19 on the UAE Payment Infrastructure
    • 6.3.5 Market Outlook
  • 6.4 Turkey
    • 6.4.1 Analysis of The Payments Landscape in Turkey (Cash And Non-cash)
    • 6.4.2 Digital Transaction Volume and Total User Base (2019-2025)
    • 6.4.3 Market Breakdown of Digital Transactions - mPOS and Digital commerce
    • 6.4.4 Major E-wallet Service Providers in Turkey - (BKM Express, Mobileexpress, Pay Cell, etc.)
    • 6.4.5 Impact Of COVID-19 on the Turkey Payment Infrastructure
    • 6.4.6 Market Outlook
  • 6.5 Morocco
    • 6.5.1 Analysis of the Payments Landscape in Morocco (Cash And Non-cash)
    • 6.5.2 Digital Transaction Volume and Total User Base (2019-2025)
    • 6.5.3 Market Breakdown of Digital Transactions - Mpos and Digital Commerce
    • 6.5.4 Major E-wallet Service Providers in Morocco
    • 6.5.5 Impact of COVID-19 on the Morocco Payment Infrastructure
    • 6.5.6 Market Outlook
  • 6.6 Rest of Middle East and North Africa (Iran, Bahrain, Qatar, etc.)

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 First Data​
    • 7.1.8 Fawry​
    • 7.1.9 Mastercard (MasterPass)​
    • 7.1.10 ACI Worldwide​
    • 7.1.11 Saudi Digital Payment Company
    • 7.1.12 Denarii Cash

8 INVESTMENT ANALYSIS

9 MARKET OPPORTUNITIES AND FUTURE TRENDS

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