Market Trends of MENA Digital Payments Industry
High Proliferation of Smartphones and Social Interactions to Drive Market Growth
- The Middle East and North African digital payments market is heavily driven by the region's high internet and mobile penetration. This digital ecosystem in the region supports the latest technologies, and increased mobile and internet penetration rates are further encouraging consumers to shift toward mobile wallets as they provide ease and convenience with the best global standards of security.
- Moreover, many carriers have released inexpensive smartphones with financing options to encourage mobile broadband use. By the end of 2025, there will be 565 million smartphone connections in MENA. This is projected to be an increase of almost 200 million connections over five years, and it would mean that nearly 80% of the population has a smartphone.
- The remarkable smartphone adoption rate in Saudi Arabia is one significant factor driving the regional market's digital revolution. For instance, according to Ericsson Mobility Report, in the Middle East and North Africa, the number of subscribers to 5G services in the MEA region was to reach 60 million by 2024, representing about 3% of all mobile subscriptions in the region. GSMA also estimates there may be around 50 million 5G connections across MENA, of which 20 million connections could be in the Arab States alone by 2025. This further indicates the fast mobile adoption rates are driving the market studied.
- Additionally, the area offers fast internet access, allowing instant money transfers via digital payments. For instance, according to information made available by Ookla, internet users in Saudi Arabia were projected to attain the following connection speeds at the beginning of this year: the average fixed internet connection speed was 80.39 Mbps, and the average mobile internet connection speed over cellular networks was 91.06 Mbps.
- The regional market's social media platforms built their massive audiences on the promise of connecting people with their friends and family, meeting new people, and strengthening relationships. These platforms enable online purchases where a user’s cash can be jointly spent with a friend on social media, and they no longer require a request for an account number, which is a revolution in digital payments and driving market growth.
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Egypt to Drive Market Growth
- Egypt, a country commonly known for government employees collecting cash payments for utility bills, such as gas and electricity, is gradually shifting toward more digital transactions. This is spurred by the strategy set up by the North African Central Bank to ensure all citizens of the country focus on digital payments and mobile wallets by having access to financial services. For instance, the payment systems and business technology industry reported to the Central Bank of Egypt (CBE) that the number of e-payment cards issued by banks in Egypt rose to 62 million as of September 2023, up from 52 million in December 2022.
- The increased adoption of digital payment methods by numerous businesses and customers in the region is anticipated as their popularity continues to rise. Therefore, the area needs real-time infrastructure to support these payments and make them efficient. For instance, in April 2024, Mashreq Egypt, in partnership with Visa, announced the launch of the Mashreq NEO Visa Card to enhance banking experiences for Egyptian citizens. The Mashreq NEO Visa Card represents a fusion of cutting-edge technology, seamless banking services, and exclusive benefits tailored to meet the evolving needs of consumers.
- The country has witnessed a progressive change in its legislative systems, such as the promulgation of a regulatory framework within the new Central Bank Law and the executive regulations of the E-Payment Law, to keep up with the global changes in the digital payment and banking industries.
- Additionally, the Egyptian government announced plans to make its New Administrative Capital a cashless city starting in February 2023. In order to implement this, the nation is presently in talks with Mastercard, a leading provider of global payment systems. Mastercard plans to invest in the payment and collection infrastructure of Egypt's government. By 2024, more than half of Egypt's population is expected to subscribe to mobile internet services, and by 2025, there will be about 700 million mobile connections.
- Additionally, quick payment systems provide both consumers and organizations with several advantages. Mobile apps that enable users to send money to recipients specified by their mobile phone numbers rather than their bank account data are frequently used to access such payment systems. Customers who want quick, straightforward ways to shop online and those who use their mobile devices to pay for friends or brick-and-mortar merchants can benefit from such services. These methods allow customers to avoid carrying cash or credit cards.
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