The Middle East & North Africa Digital Payments Market is expected to CAGR of 6.5% over the forecast period 2020-2025. Over time, the digital payment industry has recorded a robust growth, with new providers, new platforms, and new payment tools being launched in the region.
The landscape of digital payment across the region is changing rapidly and fuelling the market growth, owing to unsettling digital transformation. The stores and services across the region are rapidly adopting and integrating mobile payment applications, such as PayPal, Samsung Pay, Apple Pay, and Google Pay to accept payments. Owing to changing lifestyles, daily commerce, and rapid growth in online retailing, this trend is expected to continue during the forecast period in the region.
The market studied is expected to flourish, owing to the robust proliferation of the smart phones and internet. The internet penetration rate has been recording a healthy growth over the past few years, and 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, the UAE 73%, and Saudi Arabia 60%.
The Middle East's reliance on cash is due to a number of socio-economic factors: including education, awareness, and habits. Although cash will likely remain king in the Middle-East, through government promotion, people are gradually learning about the ease and benefits of a cashless society which is likely to boost the market growth in the region.
The Middle East and Africa region are witnessing a burgeoning digital payment market with a significant number of market players offering a multitude of diverse services. The United Arab Emirates (UAE), in particular, has observed a boom in the number of available mobile payment services. For instance, mobile operator Etisalat offers its mobile wallet Etisalat Wallet. Also, Emirates NBD bank offers NBD Pay, a near-field communication- (NFC) based mobile contactless payment service, and Apple Pay and Samsung Pay were launched in UAE in the recent past.
There are only 17 countries in the Middle East. Even so, economic disparity is obvious. The Gulf Cooperation Council (GCC) consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The GCC accounts for 20% of the Middle East's total population but contributes to over 60% of the GDP. Because of the concentration of wealth in these countries, it is also observing higher adoption of digital payments
With the recent outbreak of COVID-19 global transactions across businesses are observing a significant decline, whereas digital payments are seeing consumer propensity towards its use due to the nature of non-contact based transactions and convenience offered during the lockdown period.
The acceptance of digital payment methods is expected to improve post COVID-19 and play a stronger role in the long term. With cash being seen as a potential carrier for the virus, governments and regulatory bodies are discouraging its use. These factors are influencing the growth of the market.
Key Market Trends
High Proliferation of Smartphones and Internet Penetration to Drive the Market Growth
The global mobile connections have surpassed the global population mark. For instance, according to GSMA, the global mobile connections in 2019 stood at 8.98 billion and increasing even significantly with prominent growth rates in Middle East and North Africa.
In the Middle East and North Africa, one in three mobile money providers that offer a smartphone app are seeing 20 percent or more of their active customer base transacting through the app, and a growing number of deployments in 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 will 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 in GDP by 2020.
In September 2019, inwi, Moroccan telecom operator, launched its mobile money service inwi money. The service works on Comviva's mobiquity money, where the service offers consumers a quick, convenient and secure way to perform multiple financial transactions such as person-to-person money transfer, airtime purchase, bill payments, and merchant payments.
In Mar 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. Morocco also becomes the 18th country in Africa and the Middle East region of Orange to offer the Orange Money solution.
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 underlying real-time infrastructure in place to enable these payments to make it quick and effective.
The launch of a real-time payments service provides the core infrastructure which support 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 GDP growth and also reduces costs of doing business in the region and provides convenient secure access to payments systems for banked and unbanked consumers, businesses and government.
The recent launch of real time payments in the Saudi Arabia is serving as a catalyst for the adoption of real-time payments amongst other countries in the region .This will benefit financial institutions (FIs), merchants, consumers and society by offering enhanced visibility into payments, by enabling better cash management and by helping businesses better manage day-to-day operations by improving liquidity.
As the region is operating cross-border, and require smoother, cheaper and quicker payment processes. Hence launching such real-time payment system in the region is likely to increase and thereby driving the market growth.
The Middle East & North Africa Digital Payments Market is moderately concentrated. The competitive rivalry in the market studied is moderate, as a good number of players prevail. Despite the existence of several companies in the market studied, firms are required to keep innovating their products, in order to gain a sustainable competitive edge over their rivals and provide product differentiation. Some of the key developments in the market are:
In Oct 2019 - Alphabet Inc. introduced biometric security with Android 10 which has started into the Google's widely-used digital wallet platform and online payment system- Google Pay. The feature is available in the latest 2.100 version of the app and allows users to protect their online transactions using fingerprint feature. Google Pay users previously had to enter a PIN to secure their transactions. This has changed now with the latest update. Google has now added support for biometrics API so that users can use their fingerprints to authenticate the money transfers.
In Oct 2019 - Samsung Corporation in collaboration with Mobeewave announced the deployment of NFC-enabled contactless payment acceptance on mobile devices globally. These two companies had deployed their solution first in Canada (15th October 2019), and are planning to expand globally starting in 2020.
Key Topics Covered
1 INTRODUCTION 1.1 Study Deliverables 1.2 Study Assumptions 1.3 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS 4.1 Market Overview 4.2 Market Drivers 4.2.1 High Proliferation of Smartphones & Social Interactions 4.2.2 Enablement Programs by Key Retailers to Bridge the Gap Between Physical and Digital World 4.2.3 Launch of Real-Time Payment Systems in Key GCC and North African Countries 4.2.4 Growing Emphasis on Customer Satisfaction and Convergence of Global Trends in the Region 4.3 Market Restraints 4.3.1 Operational Challenges Involving Cross-Border Payments and Relative Lack of Digital Literacy in Key Emerging Countries in the Region 4.4 Value Chain Analysis 4.5 Porters Five Force Analysis 4.6 Key Regulations and Standards in the Digital Payment Industry 4.7 Assessment of Impact of COVID-19 on the Middle East & North Africa Digital Payments Market 4.8 Key Base Indicators 4.8.1 Digital Literacy 4.8.2 Population Index 4.8.3 Strong Presence of Expatriate Workers in the Middle East Region 4.9 Major Case Studies & Implementation Use-Cases
5 CURRENT PAYMENT LANDSCAPE IN MIDDLE EAST & NORTH AFRICA
6 MARKET SEGMENTATION 6.1 Country 6.1.1 Saudi Arabia 6.1.2 Egypt 6.1.3 Morocco 6.1.4 Turkey 6.1.5 UAE 6.1.6 Rest of Middle East (Iran, IraqKuwait, Qatar, Bahrain) 6.1.7 Rest of North Africa
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)