Payments around the World - MEA

MEA, Middle East and Africa, or sometimes referred to as MENA with a narrower coverage that spans across the Arabic-speaking countries only, is a region that has some of the wealthiest as well as the most poverty-stricken countries in the world. Today, we take a look at the payment markets of this region.

Local Payment Culture

In fact, the population of MEA is still underbanked with only 46% of them banked, while the world average is 67%. Internet and smartphone penetration are, too, factors that affect the payment landscape of a region. Both indexes of MEA are lower than world average - 47% in MEA against 62% globally (internet); and 43% in MEA against 70% globally (smartphone).

Cards are utilized in 47% of online transactions from this region, despite the fact that just 12% of the population actually has a card. This seems to indicate that there is a sizable unmet need for e-commerce, which could be satisfied by websites that provide alternatives for those without credit cards.

With an 18% share of online purchases, cash is the second most common method of payment. E-wallets account for 14% of all online purchases, bank transfers for 17%, and different local methods for the remaining 4%. Visa holds 37% of the market for cards, followed by Mastercard (29%), American Express (1%), and a variety of regional and local card programs (33%).

E-Commerce Growth Leads to the Rise of Payment Fintechs

In the MEA region, about 85% of fintech companies work in the payments, transfer, and remittance industries. Payments still dominate the MEA region, despite the presence of other fintechs in various subsectors.

The MEA's e-commerce trading volume was valued US$55 billion and had been expanding at a 30% annual rate on the eve of the pandemic. As we entered the pandemic, the average online shopper in the region spent US$371 per year. Like other markets, e-commerce in Africa has grown significantly over time. For instance, 27% of Egyptians reported doing more online shopping because of Covid lockdowns.

In the Middle East, the UAE saw a 53% surge in e-commerce volumes. A survey suggests the e-commerce market in Israel rose by 36% alone in 2020. In Saudi Arabia, 77% of consumers are shopping online more since the pandemic.

Digital payments are expected to grow at a compound annual growth rate (CAGR) of 15.39 per cent from 2022-2026 in the MENA region.Read More Here