A recent study revealed that daily digital shopping in the Middle East and North Africa (Mena) region has surged by 80% between 2020 and 2023. According to Checkout.com’s report titled ‘The state of digital commerce in Mena 2024’, the total processing volume in the region increased by an astonishing 658% from January 2020 to December 2023. Concurrently, the preference for cash on delivery as a payment method has declined significantly, dropping from 41% in 2020 to 20% in 2023.
The Mena region is witnessing a significant shift towards digital payments, driven by the growth of ecommerce and a rising demand for cashless transactions. Digital wallets, led by Apple Pay, are gaining traction rapidly, with Google Pay and local options like STC Pay also making significant strides. These wallets provide consumers with the convenience, security, and efficiency they seek in their payment methods.
Remo Giovanni Abbondandolo, General Manager at Checkout.com Mena, emphasized the importance of meeting consumer expectations for faster, more secure, and flexible payment options. Amnah Ajmal, EVP of Market Development at Mastercard, projected that the digital payments market in Mena will reach $9 billion by 2028, making it the second-largest digital wallet market globally. By 2024, cashless payment methods are expected to account for over 50% of transactions, presenting a significant opportunity for enhancing secure payment solutions and promoting financial inclusion.
The money movement sector has also experienced substantial growth, with remittance processing volume increasing sixfold from January to December 2023. This growth is largely attributed to the introduction of Automated Funds Transfer (AFT), which has significantly improved user experience by enabling instant fund transfers. Mastercard data indicates that remittance flows in the Mena region grew by an estimated 5% to $620 billion in 2022, contributing to economic stability and financial inclusion.
Arjun Singh, partner and global head of fintech at Arthur D. Little, noted that the ecommerce landscape in Mena is highly dynamic, with payments playing a crucial role in shaping its future. Multiple trends, including emerging technologies and regulatory changes, are expected to accelerate the evolution of payments in the coming years, impacting both demand and supply sides of the ecommerce ecosystem.
Somshankar Bandyopadhyay, a News Editor with nearly three decades of experience, currently manages the business section, ensuring that the latest economic and business news reaches readers promptly.
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