Digital Payment in MENA 1682969601

re:Imagine payments
What's Next for

Digital Payments
in the Middle East
and North Africa
Research & Insights by
Sponsored by
https://paymentservices.amazon.com
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various official published sources, such as Passport, trade opinion surveys and expert
interviews conducted by Euromonitor with a mix of merchants, banks and payment
service providers, distributors and market experts across the countries identified in this
whitepaper, being the United Arab Emirates (UAE), Saudi Arabia and Egypt.
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2023 Sponsored by 02
CONTENTS
Page No. Section Name
07 Section 1: The Rapidly Changing

Digital Payments Landscape
07 Digital payments from a global perspective
10 Digital payments from a regional perspective: Middle East & North Africa
11 So what are the major drivers of the shift towards digital payments?
20 Section 2: Digital Payments and the

Generation Gap
22 Section 3: Young Consumers, Younger

Companies: Role of SMEs in Digital Payments
25 Section 4: Themes Driving Digital Payments

28 Lending for smart consumers
33 Seamless consumer experience through integrated commerce
42 Fostering financial inclusion through digital and instant payments
49 Section 5: Where do Industries Stand

in Adopting Digital Payments?
54 Digital payments adoption dynamics
55 Online retail sales of new and used goods
59 Travel
66 Essentials
71 Leisure
75 Section 6: Conclusion
75 Which industries will propel digital payments into the future?
77 Why merchants must adapt to the changing digital payments landscape?
78 What does the future beyond 2023 hold for digital payments
86 Appendix
Everything we do at Amazon—from our online (fintech) boom driven by a young and
stores and seller support network to Amazon tech-savvy population. Businesses, fintech
Payments Services solutions—is done to make entities, and governments are collaborating to
our customers’ lives better. We take seriously push change and reimagine digital payments
our commitment to make better, do better, and for the consumers of today and tomorrow.
be better for our customers, employees,
Together, we are on this exciting cusp of
partners, and the world at large.
transformation, investing in this journey, and
For over 25 years, Amazon has been figuring out where it will take us next. Amazon
consistently innovating to benefit merchants, Payment Services’ re:Imagine Payments forum
sellers, and customers. In the Middle East and was launched as a means to offer merchants a
North Africa (MENA) region, we bring together way to share information and research, learning
our global expertise with local insights to drive from each other in the process. This was the
meaningful innovation in all areas of our intention behind sponsoring the “What’s Next
business, including online stores, operations, for Digital Payments in the Middle East and
devices, advertising, cloud services, and North Africa” white paper – to share
payments. information that might help those in the
industry with their decisions.
The region is brimming with potential, and the
retail industry is thriving, with more and more The white paper’s insights highlight important
businesses turning to online retail to reach trends currently shaping the payments
consumers. As a result, the digital payments industry, and we hope it will enable
industry is anticipated to nearly double in size meaningful, customer-focused and
across MENA’s three countries of UAE, KSA, and transformative conversations, which is in line
Egypt by 2023, we expect to see local businesses with our customer-obsessed philosophy.
flourish more than ever in that space.
Multiple government initiatives across

countries like the UAE, Saudi Arabia, and Egypt
are working to provide options and potentially
become cashless societies—at different rates, Ronaldo Mouchawar
of course. The vision, however, is set. We are Vice President of Amazon Middle East
witnessing a strong financial technology and North Africa (MENA)
We are proud to sponsor the “What's Next for The “What's Next for Digital Payments in the
Digital Payments in the Middle East and North Middle East and North Africa” white paper dives
Africa” white paper as part of our new re:Imagine into an array of pertinent topics, including the
Payments forum engagements. This research, demographics of those driving certain changes in
led by prominent agencies including payment methods; maturity levels of different
Euromonitor International (EMI) and Sixth Factor payment methods across the United Arab
Consulting, discusses factors shaping the retail Emirates, Saudi Arabia, and Egypt; major shifts
sector and provides insights on digital payment impacting local markets, including the demand
trends across the United Arab Emirates, Saudi for instant payments, expansions in digital
Arabia, and Egypt. With this information, banking, and efforts to increase financial
merchants can pivot to address the rapidly inclusion; and how knowledge sharing is driving
changing needs of their customers and achieve innovation regionally.
strong, healthy, and sustainable growth.
We share our knowledge and research to help
Knowledge-sharing is crucial to promoting inform merchants with information that might
growth and innovation in an environment where be useful to their business. We look forward to
payments technology is evolving faster than continuing to engage with the rest of the
ever. Independent from, but in parallel to the regional community through our re:Imagine
publication of the white paper, Amazon Payment Payments forum.
Services have launched our ‘re:Imagine
Payments’ forum, which is intended to create a
space for existing and potential partners to
engage, explore and establish new solutions Peter George
together, thereby contributing to the Managing Director, Amazon Payment Services,
development of enhanced digital experiences. Middle East and North Africa (MENA)
What is
re:Imagine
payments?
“What’s next for digital payments in the Middle

East” aims to shed light on:
In its endeavour to drive forward-looking • The macro-and socio-economic trends driving

conversations, Amazon Payment Services is digital payments in the MENA region with a key
proud to launch the re:Imagine Payments highlight on the United Arab Emirates, Saudi
forum. It brings you a year-long calendar of Arabia and Egypt
whitepapers, blogs, round tables and
• Consumer behaviour regarding digital payments,
collaborative engagements that aim to help
and the role of SMEs in being a gamechanger for
drive innovation among partners, foster growth
digital payments
among merchants and bring value to the
consumer. • The key themes within the payments industry in
the MENA region (UAE, Saudi Arabia and Egypt)
This whitepaper is the first of a series of
and their interplay within industries
publications that will provide industry players with
a unique perspective and an informative reference • Business imperatives for merchants for the
point to stay up to date with changing trends in the near future
payments industry and among digital consumers.
Insights from the research have been addressed for multiple digital payments
stakeholders. Please refer to the Appendix on Page 90 for details on how this
report can be consumed.
SECTION – 1
THE RAPIDLY CHANGING

DIGITAL PAYMENTS
LANDSCAPE
Digital Payments from a
Global Perspective
The world is on the cusp of a transformative The primary driver of this transformation was the
digital revolution. The introduction, adoption advent of mobile applications. As of 2020, 6.5
and maturity cycle for technology is becoming billion people (81% of the global population)
shorter. This, combined with the increased had access to mobile phones. This indicates that
effectiveness of technology, is significantly consumers and convenience remain at the helm
impacting both society and industry. Regulators, of this digital revolution, but also presents an
businesses and consumers alike are grappling to exceptional opportunity for profit. Organisations
keep pace with this rapid digital transformation. that can recognise, pre-empt and capitalise on
The profound transformation of the payments technology-driven transformation in payments
industry is fundamentally altering the payments services will unlock tremendous value, especially
landscape and changing how key stakeholders with regard to digital payments.
interact.
Global
Payments
Industry¹
USD1.9 USD2.5
trillion trillion
2022 2025
¹McKinsey Global Payments report, 2022
Estimates of segment share may be incomplete and unreliable and/or may not include a full set of substitutable products.
The rise in instant
The digital payments industry is becoming
more intricate and complex, with innovative
payments and
adjacent services complementing the digital
payments landscape. This is placing extraordinary person-to-person (P2P)
pressure on traditional payment facilitators, such
as banks, to adapt in the face of this rapid transfers is a good
transformation. In response, banks are either
competing, partnering or merging with fintech example of fintech firms
firms to upgrade their technological capabilities
and capture a larger share of payment-adjacent capitalising on missed
value pools that facilitate easier electronic
purchasing for customers. opportunities by banks.
Digital penetration is changing the way The tremendous pace and large scale of the
consumers perform transactions. It is moving payments industry transformation is pushing
away from traditional payment methods, such as governments to adopt a holistic regulatory
cash, towards alternative, easily accessible approach. Implementing a structured
payment methods. Mobile-based payments are framework that both nurtures innovation and
becoming the preferred choice of payment for maintains in-depth oversight over the
consumers, mainly driven by contactless payments landscape will ensure effective, and
payments and the use of digital wallets. secure digital payments. As a result,
Consumers expect to have more control over the Governments are collaborating with
time and frequency of payments, as they feel stakeholders across the industry to build the
more comfortable by centralising their digital digital landscape keeping consumer safety as
payment interactions through their the core premise.
smartphones via mobile applications.
Consumer centricity An estimated two-thirds

remains the key focus in of adults worldwide now
building and maintaining make or receive a digital
an edge in the digital payment.
payments space. World Bank press release: COVID-19 Drives Global Surge
in use of Digital Payments, issued June 2022
As a result, businesses need to prioritise the The pandemic has supercharged the shift to
customer experience as a core design principle digital payments across the world, creating a
in developing payment offerings and global borderless payments landscape that is
capabilities. Consumers expect a convenient, innovative, integrated and increasingly more
seamless and frictionless omnichannel payment sophisticated.
experience when dealing with service providers
Hence, digital payments lead the way in
particularly in the retail space as retail
creating an interconnected world driving the
increasingly moves online.
concept of "One World, One Consumer!”
Digital Payments from a Regional Perspective:
Middle East and North Africa (MENA)
Building on global momentum, the MENA is now online. Accordingly, organistations

region has actively embraced digital payments across all industries are expanding their
across several of its countries. Large economies payment capabilities to cater to consumer
in the region are adopting digital systems that preferences and ensure that they capture
support online retail sales, with a strong otherwise missed opportunities.
government focus and strategic direction
Digital payments are evolving at a rapid pace,
towards a digital or cashless economy.
supported by an innovative fintech sector, with
The rise of digital systems translates to around 85% of fintech firms in the MENA region
increased consumer demand for digital operating in the payments, transfers and
payments, as most of the purchasing journey remittance sectors.
” In an interview with The National, Managing Director of

Amazon Payment Services, Peter George, highlighted that
“the MENA region is estimated to have only 3% of its
consumers using cashless methods for payments. The
accelerated rate of transition towards cashless payments
is phenomenal, standing at 25% annually, with the
pandemic serving to kindle the flame.”
SO WHAT ARE
THE MAJOR DRIVERS OF
THE SHIFT TOWARDS
DIGITAL PAYMENTS?
The COVID-19 Digital Savvy Fintech

Pandemic Population Boom
COVID-19 has created viable Countries in the region have The MENA region serves as
conditions for players to relatively high internet an incubator for fintech
adopt digital payments penetration rates and boast a firms, with total valuation
young, digitally savvy upwards of USD800 million
population invested in 2021²
Digital Strong
Economy Economic
Growth
Governments are pushing to
develop their digital As of January 2023, the World
economies, including Bank estimates that the MENA
moving towards a cashless region’s economies would have
society grown by 5.4% in 2022, the
fastest growth since 2016³
Source: 2,3 Euromonitor International analysis based on primary and secondary research including World Bank, Dealroom, among others.
The Impact of
the COVID-19
Pandemic
The pandemic led to an accelerated shift towards been continuing the momentum even after the
digital life, dubbed “the new normal”. Although pandemic is over.
the repercussions of the pandemic have receded, Since late 2019, online retail volumes have
to a certain extent, the legacy of its impact on grown by more than 50% in the MENA
digital life remains. region (predominantly in UAE, Saudi Arabia,
Online retail is a key driver of digital trends that and Egypt) ⁴.
saw rapid growth during the pandemic and has
Young &
Digitally Savvy
Population⁵
The population across the MENA region is payments significantly in the years to come. As
predominantly young. According to Euromonitor of 2022, the MENA region’s internet
data, contribution of people aged up to 34 in penetration rate sits at 92%, which is lower
UAE, Saudi Arabia and Egypt account for as much than the global average of 127%. Egypt is
as the MENA regional average while being higher relatively in line with the MENA average at
than the global average. 93%, however, the UAE and Saudi Arabia have
internet penetration rates far higher than the
Widespread internet penetration and the use of
MENA and global averages (345% and 175%,
digital technology, especially among younger
respectively in 2022).
generations, will increase the scale of digital
UP TO THE AGE OF 14 UP TO THE AGE OF 34

30% of the total population in Egypt, 61% of the total population in Egypt,
UAE, & Saudi Arabia UAE, & Saudi Arabia
Global average is 25% Global average is 55%
MENA Region average is 31% MENA Region average is 63%
Source: ⁴ "How COVID-19 unlocked the adoption of E-commerce in the MENA region", by WAMDA and MIT, March 2021
⁵ Euromonitor International Passport database
Significant Fintech
Boom in the Region
Driven by the shift in consumer behaviour, omnichannel solutions to drive consumer
government directives and businesses seeing the purchases in line with government digital
value in online transactions, the MENA region is transformation directives. We expect the MENA
experiencing a major fintech boom. This is mainly region, led by the UAE, Saudi Arabia and Egypt,
led by the UAE, with over 800 start-ups worth to maintain and increase its position as an
USD15.5 billion. Banks and fintech companies are incubator for fintech firms with expanding global
collaborating closely through partnerships to reach and presence.
provide innovative digital payments and
The Push for a

Digital Economy
Governments in the region are actively inclusion and moving towards a cashless
embracing digital transformation at the heart of society.
their future agendas. Saudi Vision 2030, Egypt
According to Redseer, “the digital economy in
Vision 2030 and UAE’s digital strategy all
the MENA region is expected to double in size in
highlight the importance of digitalisation in the
2023 from its original size in 2019, fueled by
economy and society. Digital commerce is a
rising consumer adoption of digital services,
fundamental building block in supporting an
including online payments.”
effective digital economy, driving financial
Stable
Economic Growth
According to Euromonitor, the economic outlook Egypt also experienced a growth period in 2022,
for the MENA region is positive, with real GDP with real GDP growth estimated at 7.9%.
growth estimated to be 4.8% for 2022, the Economic growth across industries is expected to
highest level in the past decade. Saudi Arabia and spur consumer spending and accelerate the
the UAE are benefitting from positive momentum adoption of digital commerce.
as a result of high global energy prices and
prudent economic and fiscal policymaking.
COUNTRY PROFILE
UNITED ARAB EMIRATES
The UAE is a growing economy with a young oil sector, are all expected to drive sustained
population of approximately 9.5 million people. per capita income growth.
The outlook for economic growth is positive
Internet penetration in the UAE is among the
with real GDP growth projected to reach 3.5%
highest in the MENA region, with the
in 2023 driven by a sharp rebound in oil prices
percentage of population using the internet
and an increase in foreign direct investment.
estimated at 329%. With 5G internet coverage
Most of the UAE’s population consists of
made available across the UAE, all public areas,
expatriates, estimated at around 90% of total
including shopping malls and government
population.
organisations, offer free high-speed internet
Moderate economic development between connections, enabling consumers to make
2021 and 2040 will lead to a 46% increase in online payments without difficulty.
real per capita disposable income.
The UAE leads digital banking in the region and
Euromonitor’s Lifestyles survey confirmed that
is developing into a major global fintech hub
over 60% of respondents believe that they will
with supportive government policy. Rising
be financially better in the future. Over the
partnerships between banks and fintech
short to medium term, work-friendly visas,
companies are likely to drive innovative
rising investments to establish the UAE as a
products and facilitate easier adoption of new
Middle East hub for businesses, and a resurgent
fintech solutions, including in digital payments.
UAE COUNTRY CARD, 2022

Based on Euromonitor Analysis
3.8% 56% 18.3%

Real GDP Population CAGR %
Growth Under 35 2021-23
Total Population:
9.4 Million TOP 5 INDUSTRIES
(BY SIZE)
Online Retail
Bill Payments (Online)
Utilities
329% 99% Government
INTERNET POPULATION
PENETRATION USING INTERNET Airlines (Online)
Source: Euromonitor International Passport database and analysis based on primary and secondary research
UAE:
Digital payments industry size by category (USD bn)
Digital Payments industry size - United Arab Emirates, 2021 (USD Bn.)
55%
CAGR 2021-2023 (%)
0
Lodging
Ticketing
Education
Airlines (direct)
Consumer Foodservice
On-demand Online
entertainment
Insurance
Healthcare
Online Retail Sales
Travel Intermediaries
Bill payments
Utilities
Transport
Government
CAGR 42.7% 28.1% -14.5% -18.1% -13.7% 36.0% 4.2% 36.9% 19.9% 22.8% -12.9% 19.2% 38.0% 81.5%
2019-2021
CAGR 20.1% 17.6% 30.8% 33.4% 24.5% 20.1% 40.8% 21.8% 19.5% 8.5% 9.5% 11.5% 16.0% 9.6%
2021-2023
Please refer to page 87 for definitions of industries.

COUNTRY PROFILE
SAUDI ARABIA
The Kingdom of Saudi Arabia is expected to be the population in 2021. This is expected to
one of the world's fastest-growing economies in expand further to reach 99% by 2030.
2022. Rising oil and gas output, large-scale
This is in line with the Kingdom’s holistic digital
investment in the energy and non-energy
transformation initiatives—to be implemented
sectors and effective government programs to
as part of Vision 2030—from enabling
stimulate economic diversification and
infrastructure, such as high-speed internet
liberalisation under Vision 2030 are driving this
access through public hotspots, to Smart
positive outlook.
Government mandates for digital payments and
Saudi Vision 2030 aims to promote digital reducing cash dependency.
payments to transform Saudi Arabia into a
Overall consumer expenditure is expected to
cashless society, with a target of 70% in
register a strong CAGR of 8.5% between 2021
non-cash payments by 2025. In line with this
and 2026, driven by economic development plans
strategic direction, the Saudi government sector
resulting in stronger employment, higher income
has almost completely shifted to digital
levels and increased discretionary spending
payment methods.
across categories, accelerating the adoption of
Saudi Arabia remains one of the fastest adopters online retail and digital payments. Growing
of the internet, with the population using the investments in tourism is also likely to boost
internet growing from 75% in 2016 to 97% of consumer expenditure across the Kingdom.
SAUDI ARABIA COUNTRY CARD, 2022

7.9% 58% 13.6%

Growth within 35 years 2021-23
Total Population:
36.4 Million TOP 5 INDUSTRIES
(BY SIZE)
Bill Payments (Online)
Government
Utilities
162% 97% Consumer Foodservice (Online)
INTERNET POPULATION Online Retail
PENETRATION USING INTERNET
16
Saudi Arabia:
Digital Payments industry size - Saudi Arabia, 2021 (USD Bn.)
55%
CAGR 2021-2023 (%)
0
Lodging
Ticketing
Education
Airlines (direct)
On-demand Online
entertainment
Insurance
Healthcare
Online Retail Sales
Bill payments
Utilities
Transport
Government
CAGR
2019-2021 41.9% 149.9% 60.2% -9.2% -5.1% 14.2% -24.0% 56.1% 14.4% 8.3% 18.0% 9.9% 2.3% 30.9%
CAGR 18.1% 17.3% 26.3% 54.1% 23.7% 13.9% 46.5% 22.0% 14.0% 5.3% 10.7% 1.2% 6.7% 14.2%
2021-2023

COUNTRY PROFILE
EGYPT
Egypt's real GDP growth in 2022 totalled 5.0%, The percentage of the population using the
which was lower than the MENA average of internet is anticipated to rise from 68% in 2022
5.5%. Egypt's Vision 2030 outlines a digital to 79% in 2026. Egypt will continue to lag
strategy to boost digitalisation and innovation relative to the UAE and Saudi Arabia despite this
in the country. In November 2021, as part of its rise. Delayed internet adoption is largely the
digital plan, Egypt announced the establishment result of inadequate infrastructure that restricts
of 17 smart cities that will use the newest access to fixed broadband services, primarily due
technologies to improve the quality of life to high implementation costs.
through digital solutions and technological
Egypt's consumer expenditure is forecast to
breakthroughs, including digital payments.
expand by a CAGR of 2.2% between 2021 and
COVID-19 caused supply-chain interruptions as 2026. Greater economic activity, increased
well as a slowdown in both private investment exports and high-paying job placements are
and the tourism industry, which negatively predicted to increase Egyptian spending. Private
impacted the economy. However, the pandemic sector development, corporate activity and job
also accelerated the government's focus on the prospects will boost discretionary income. With
transition to a cashless society and improving consumer demand for digital payments on the
the perception of digital payments among rise, businesses across all industries are
Egyptians. continually expanding their payment acceptance
capabilities to embrace new payments methods.
EGYPT COUNTRY CARD, 2022

5.0% 66% 19.6%

Growth Under 35 2021-23
Total Population:
103.0 MILLION TOP 5 INDUSTRIES
(BY SIZE)
Ticketing (Online)
Transport (Online)
Utilities
91% 68% Bill Payments (Online)
INTERNET POPULATION Online Retail
PENETRATION USING INTERNET
Egypt:
Digital Payments industry size - Egypt, 2021 (USD Bn.)

55%
CAGR 2021-2023 (%)
0
Lodging
Ticketing
Education
Airlines (direct)
On-demand Online
entertainment
Insurance
Healthcare
Online Retail Sales
Bill payments
Utilities
Transport
Government
CAGR 72.6% 45.0% 4.2% 8.2% -9.1% 18.7% -27.2% 49.6% 33.7% 44.7% -33.7% 32.7% 29.2% 49.2%
2019-2021
CAGR 29.0% 37.4% 8.9% 11.0% 20.9% 33.6% 23.2% 8.2% 15.3% 29.0% 12.5% 29.1% 23.5% 5.4%
2021-2023

SECTION – 2
DIGITAL
PAYMENTS
AND THE
GENERATION GAP
Digital payments, driven by technology, have The spread of these generations varies widely
always been associated with the younger between the region’s three key countries: Saudi
generation, as older generations are more likely Arabia, Egypt and the UAE.
to maintain traditional payment methods.
Generation Alpha (aged 0-9) is the largest

generation in Egypt, accounting for 30% of the
total population in 2022. In Saudi Arabia and the The MENA region boasts a higher
UAE, Millennials (26-41 years) make up the bulk contribution of youngsters (including
of the population, at 26% and 47%, respectively,
Gen Alpha, Gen Z and Millennials),
mainly due to the number of expats working in
these countries. This not only serves as a strong estimated at 75% of the overall
base for adoption of technology and, in turn, population in comparison with a global
digital payments, but also showcases a
average of 67%.
promising future for reaching a wider
population base as these generations age.
Generation Ages Egypt Saudi UAE

Arabia
Gen Alpha 0–9 29.9% 22.6% 11.8%
Gen Z 10 – 25 23.9% 22.1% 15.8%
Millennials 26 – 41 21.5% 26.3% 47.3%
Gen X 42 – 57 14.9% 22.2% 20.8%
Baby
Boomers
58 – 76 8.7% 6.1% 3.9%
Silent
Generation
77 – 94 1.0% 0.7% 0.5%
Euromonitor International Economics & Consumers Database 2021
Why are these differences so important in
the digital payments context?
Baby Boomers
& Gen X
Even though most established businesses in Saudi they’ve been doing business. They have, after all,
Arabia, Egypt and the UAE belong to Baby established and maintained the most successful
Boomers and older Gen Xers, these businesses businesses to date. It is therefore up to younger
have thrived for decades using cash and banking generations venturing in entrepreneurship or
transactions. These generations, despite having updating inherited businesses to adopt newer
an understanding of the concept of digital payment technologies.
payments, are usually content with the way
Millennials Now
Millennials are the age group leading online implementing digital payment methods to
purchases today. They are the 26- to 41-year-olds expand their reach and satisfy a wider customer
who have flourishing careers, strong purchasing base. It is easier for Millennials, who are
power, and are as tech-savvy as the younger establishing SMEs, to incorporate digital
generations. It is important to note that many payments into their business operations, as they
entrepreneurs also fall within this age group, understand the need for cashless transactions.
which means that Millennials are not only
consumers, but also business owners
Gen Z of Today
& Tomorrow
Gen Z encompasses young people aged 10 to 25. respondents in all three countries confirmed being
A small segment of that population is out of school either part-time or full-time employed (69% UAE,
and working to gain experience in their respective 55% Saudi Arabia, and 97% Egypt). The preferred
fields. They are very tech-savvy and spend payment methods were cash and credit/debit
countless hours on social media, with leading cards, however almost half the respondents use
players shifting their focus towards them and their digital/mobile wallets for daily payments (UAE
needs. This is the generation that is shaping the 51%, Saudi Arabia 48%, and Egypt 43%). According
consumer habits of tomorrow. Many companies are to survey respondents, most feel the pressure to
planning and adapting to be ahead of the game keep up with the latest trends, including digital
once this segment of the population reaches its full payments. Respondents also showed confidence in
economic potential. both the security and reliability of these payment
methods. With rising consumer expenditure,
According to a Gen Z survey of 18- to 24-year-olds
respondents also showed willingness to try
by Amazon Payment Services in collaboration with
reputable companies that offer options such as
SixthFactor Consulting in Saudi Arabia (N=403),
Instalments and Buy Now, Pay Later (BNPL).
Egypt (N=402) and the UAE (N=400) in 2022, most
SECTION – 3
YOUNG CONSUMERS,
YOUNGER COMPANIES:
ROLE OF SMES
IN DIGITAL PAYMENTS
Small and medium enterprises (SMEs), owned SMEs are also the largest employers in their
mostly by millennials, play a pivotal role in the respective countries, providing jobs for 50% of
economies of Egypt, Saudi Arabia and the UAE. In private workers in Saudi Arabia, 86% in the UAE
Egypt, SMEs (including micro enterprises) and 75% in Egypt.
account for 98% of the private sector, and
All three countries are focusing strongly on
contributed 43% of the country’s GDP in 2022. In
incentives for SMEs across all sectors as part
the UAE, the numbers are very similar, with SMEs
of their economic diversification policies
constituting 94% of the companies in the private
focused on non-oil businesses.
sector and contributing 40% of the country’s
GDP, while in Saudi Arabia, the equivalent figures Fintechs also play a pivotal role enabling SMEs
are 90% and 30%, respectively. to expand their business efficiently.
“In Egypt, Saudi

Arabia and the UAE,
SMEs, including
micro-enterprises,
represent at least
90% of the private
sector and at least
30% of each
country's GDP”
SMEs
SMEs across Saudi Arabia, the UAE and Egypt In travel and tourism, travel intermediaries, who
have the highest penetration in online retail, are smaller SMEs with very few employees,
travel & tourism and consumer foodservice. partner with global online travel aggregators, to
These are also the sectors registering the offer travel packages that include airlines,
strongest adoption and highest growth in lodging, tours and tickets, as well as
digital payments. in-destination transport. These aggregators
usually only accept digital payments, usually In
These industries are already using digital
App. All of these alliances have allowed many
payments and have strong potential for new
SMEs in these industries to maintain operations
payment methods across all three countries.
during the COVID-19 pandemic, and even show
Growth for these SMEs can be boosted
strong growth once pandemic restrictions eased
through partnerships.
in each country.
Retail SMEs are partnering with
In Conclusion
well-established online retailers to further
Adopting digital payments individually can be
expand their consumer base, decrease
very costly for SMEs, as it requires investment in
operational costs without having to offer
digital infrastructure and periodic maintenance
purchases through their own websites and
or subscription. However, with the help of
offer consumers convenience through several
aggregators and larger online retail places, SME
digital payment options. The foodservice
investment requirements are much lower as the
industry is already using food aggregators to
technology is owned by third parties. However,
boost SME sales, offering benefits for
the question is not whether digitalisation is
consumers, such as ease of ordering, payment
beneficial for SMEs, the question is how fast can
and delivery. Food aggregators have a wide
SMEs achieve this digitalisation with the tools on
range of restaurants offering their menus in
hand. As consumers shift their mode of
their apps. They offer SMEs in the foodservice
purchasing, SMEs must follow their lead.
industry access to a wider consumer pool
Digitalisation offers SMEs a way to differentiate
without having to deal with online orders or
themselves from their competitors and take
delivery themselves. In some cases, they have
advantage of the online shopping boom.
even removed the need for a physical
restaurant, as is the case with ghost kitchens.
FINTECH
According to the International Monetary Fund

(IMF), SMEs in the Arab world face the largest
financial gap worldwide and receive the lowest
Only 80 of the 400 active percentage of bank credit. It is estimated that
fintechs identified in the SMEs require USD123 billion to reach their full
potential, which presents a strong opportunity
Arab world, target SMEs. for fintech⁶. Of the 400 active fintechs identified
in the Arab world, only 80 actively target SMEs,
and most don’t offer financing, but rather
provide services, such as digital payments, to
improve their business processes.
Financial services are key to enabling
entrepreneurs to launch and grow SMEs. Let's take a look at the current payment themes
Financing and business support lead SMEs to offered by fintech entities that are driving the
successfully expand their businesses, manage adoption of digital payments in SMEs and larger
risks and make processes more efficient. companies alike.
FIN T E
CH
GET S
TA R T
E D
Source: ⁶ How are Fintechs handling the US$123 Bn. SME finance gap?, CGAP, April 2021
SECTION
SECTION – –4 4
THEMES DRIVING
DIGITAL PAYMENTS
Payment instruments and mediums that have With the rise of the fourth industrial
endured for millennia have undergone a revolution—marked by digitalisation,
profound and sudden shift since the advent of interconnected devices, digital transformation
the internet in 1983 and the subsequent digital and AI—the payments sphere is experiencing yet
revolution. The intersection of the internet and another fundamental and innovative shift.
the financial sector has led to the birth of new Digital payments systems are transitioning
digital payment systems, where the scope and towards a new digital era, guided by the precepts
scale of payments increased to cross of accessibility, consumer centricity, real-time
geographical boundaries, almost in real time. connectedness and autonomy.
Electronic bank accounts and payments allowed There is a newfound liberty in digital payments,
new precedents for the exchange of value, both underpinned by a sprawling and complex digital
at domestic and international levels, albeit under infrastructure. This has wide-ranging benefits for
the supervision and regulation of central banks. all key stakeholders, as well as some inherent risks.
Benefits of digital payments for key stakeholders
Governments Customers
– Improved data analytics to monitor consumer – More convenient and diverse payment options
spending and industry trends
– Value-added digital payment services such as BNPL
– Financial inclusion for broader segments of the
– Rewards from loyalty schemes and promotions due to
population
better Customer Relationship Management systems
– Increased cost efficiency and operational effectiveness
Businesses Suppliers
– Faster and more reliable operations and increased – Effective supply-demand mechanics as a result
security of improved digital infrastructure
– Merchants can also generate revenue from new digital – Enhanced operational effectiveness and
channels through wider access increased transaction security
– Merchants can receive previously inaccessible lines – Ability to provide lines of credit based on
of credit digital financial records and predictive models
in cooperation with key stakeholders
World Bank, Euromonitor Analysis
Which themes are driving
digital payments in the Middle East?
In this section, we will discuss some of the changes being

witnessed in digital payments systems, and their impact on
the wider payments landscape. With diverse digital payment
trends across the world, three major aspects of the digital
payments journey are being redefined and are currently in
different adoption phases in Saudi Arabia, the UAE and Egypt:
Lending for smart consumers
Seamless shopping experiences

through integrated commerce
Fostering financial inclusion

through digital payments
To visualise each of the themes' maturity levels,
this document defines maturity stages as:
Early Introduction Product / service has been introduced only within the past year in the country.
Prime Introduction Product / service has been active for more than a year and may be represented by more than one
player.
Late Introduction Product / service has gained acceptance and is beginning to grow with its end-consumer /
merchant. This phase might involve 2 or more players in the competitive landscape.
Product / services is easily accessible by the end consumer through 2 or more players and has
Early Growth
strong acceptance to begin registering growth.
Prime Growth Wide availability of the product / service ensuring strong growth among consumers.
Product / service stabilises in growth terms after expanding across all relevant industries /
Mature Growth
geographies, as applicable.
Early Maturity Growth begins to stabilise after rapid expansion in the growth phase.
Prime Maturity Growth flattens completely indicating the need to look-out for possible replacements.
High Maturity Product / service loses momentum and begins to decline.
Decline & Phase-out Product / services has lost complete relevance and is likely to be phased out.
LENDING FOR
SMART CONSUMERS
Questioning the fundamentals has been the key The payments landscape pushed the limit
to expanding the consumer’s purchasing remit further to ask, “why can’t the consumer expand
across goods and services. Why should their purchase remit on a day-to-day basis
consumers be able to borrow money only for through small bite-size loans?” Why should
high-ticket items that require lengthy instalments be accessible only to a social class
documentation and a long repayment period to that can provide significant documentation?
make them affordable? Instalments were Fintech service providers leveraged this gap
introduced as a solution by banks and service to introduce Buy Now, Pay Later (BNPL), a
providers, both with and without interest game-changer and soon-to-become
payable, based on agreements between trillion-dollar payment theme that will
retailers and service providers. increase the consumer base and expand their
purchasing power.
Instalments
Instalments are a long-term payment option to
convert transactions to periodic instalments (typically monthly)
Instalments are one of the earliest assessments at the time of the transaction or the
consumer-friendly initiatives established by request for instalment payments, thus improving
banks and non-banking financial institutions to customer retention and new onboardings.
help convert large-ticket transactions into
As for SMEs, open banking data will be the first
monthly payments (in the form of credit card
source to enable fintech players to help smaller
instalments and easy payment plans) that the
merchants leverage extended data points for
customer can assimilate comfortably. There are
credit assessments before adding the level of
a growing number of partnerships between
consumer behaviour which, although expected to
instalment providers (banks or fintechs),
take more time to launch, will likely evolve
merchants, and online pure-play retailer to offer
eventually.
instant instalment options.
With the onset of BNPL, which involves very
Credit scores for instalments are expected to
minimal documentation and lower minimum
mature from solely salary-based assessments
transaction limits, instalments are expected to
towards customer behaviour scoring and online
mature rapidly over the coming years to cater to
spending histories. Collaboration between
specific basket sizes and high-ticket-value
instalment providers and merchants and online
industries.
pure-play retailer has been increasing,
incorporating metrics such as type of car, house,
neighbourhood and even education, leveraged
from the merchant’s own sales data, to facilitate
making instant repayment capability
Check next page for graph
Instalments currently have strong adoption across
high-value consumer categories like jewellery, white goods,
among others, across MENA region.
� There are a growing number of partnerships � Traditionally, instalment payments in Egypt are
between instalment providers (banks or available to people with fixed income, which
fintechs) and merchants, online pure-play means that a very large segment of the
retailers and service providers to offer instant population is excluded from instalment
instalment options in the UAE. Growing demand payments, including those, such as freelancers,
for affordable lending products for smaller who have a variable income. Possible adoption of
values could result in a hybrid product of BNPL tracking the creditworthiness of customers
and micro-loans that could see instalments across the payment landscape could help expand
being limited to mid-large-value transactions. adoption of instalments.
� Driven by strong adoption across several

categories including online retail and travel &
tourism in Saudi Arabia, instalments is likely to
expand further across categories.
Current and forecast adoption of Instalments¹
Introduction² Growth³ Maturity⁴ Decline⁵
CURRENT FORECAST SAUDI ARABIA UAE EGYPT

(2022) (Until 2025)
¹ Refer to page 27 for a detailed explanation of the maturity phases

² Introduction: Product/Service introduced in the past year by one or more players and is yet to gain customer confidence
³ Growth: Product/Service has gained customer confidence and is actively expanding across categories and/or geographies
⁴ Maturity: Growth begins to stabilise and eventually flatten with wide customer and reach
⁵ Decline: Product/Service has lost relevance, is phased out and replaced by a superior product/service
Buy Now, Pay Later (BNPL)
Buy Now, Pay Later is a short- to medium-term payment
option (typically digital) to convert transactions to periodic
monthly payments (mostly over 4 and going up to 6 or 8 months)
A new instalments model is gaining traction in amounts divided equally into smaller
the world of payments. BNPL is a instalments, service providers are expanding the
customer-friendly payment option that allows remit to attract customers by providing loyalty
consumers to purchase a product, without programs, discounts and vouchers in the UAE and
paying for it immediately. Instead, the payment Saudi Arabia. Meanwhile in Egypt, service
is spread across a short-term, interest-free providers allow customers to purchase without a
period with monthly instalments. down payment, to try the product, and then
initiate payment instalments if not returned.
These purchases typically encompass high-value
categories like furniture and electronics, with These payment options are gaining popularity in
negligible minimum transaction limits, but can the MENA region where they are still in their
also include groceries, thereby expanding the growth phase and are expected to expand across
consumer’s average basket size. BNPL gained all major consumer-driven industries. Leading
popularity primarily because it is easily payment processors are currently attempting to
accessible and efficient for both the payer and attract existing Payment Service Providers
the payee, as they typically occur on digital (PSPs) into their BNPL service network by
mediums. offering white-label solutions to major
merchants. As a result, BNPL is anticipated to see
All the customer information is logged on the
an influx of new companies and alliances soon.
system, including their payment details,
providing safety, security and assurance for all Considering the fees and additional services
parties involved when conducting transactions. provided by BNPL providers, retailers now have a
In addition, there is typically zero interest on plethora of options to choose the most
instalments, making it an appealing option for advantageous partnerships.
consumers. BNPL schemes cannibalise a portion
of credit card and cash-on-delivery payment
revenue as consumers find that this is a
trustworthy alternative form of delayed
payment.
While BNPL typically begins with one instalment

at the point-of-sale followed by the remaining Check next page for graph
BNPL is gaining significant momentum with consumers.
B2B BNPL or a hybrid of BNPL and micro-loans requiring
easier compliance are creating their own niche in some
industries and specifically with high-ticket items.
� UAE is seeing active adoption of BNPL across intensifying, necessitating the development of
categories with several service providers loyalty programs and discounts to bind
competing for a share of this offering. Leading customers to certain providers. Adoption of BNPL
payment processors are also expanding their is likely to expand further driven by an influx of
products by including cashback and providing new service providers and alliances.
virtual cards that offer BNPL services in stores
� BNPL has grown strongly in Egypt driven by the
across fashion and electronics without the need
current economic situation and strong hurdles in
to link to a credit or debit card, thereby
consumers’ ability to get bank loans, which
conveying flexibility.
makes the option to pay in instalments
� The rising BNPL sector in Saudi Arabia attractive. Due to the strong uptake, new players
facilitates easy loan access for more consumers. are actively entering this segment thus driving
Competition among BNPL providers is competition in BNPL offers.
Current and forecast adoption of BNPL¹

(2022) (Until 2025)

SEAMLESS CONSUMER EXPERIENCE
THROUGH INTEGRATED COMMERCE
The digital economy forms an active and living interconnected system. Online retail is one of
infrastructure that is used by banks, merchants, the main pillars of the digital economy. Saudi
consumers and organisations alike. All Arabia, Egypt and the UAE form 80% of the
stakeholders are engaged and add value in region’s overall online retail sales.
different capacities to form an active and
Against the backdrop of a growing digital
economy, and huge demand for online retail, we
Online Retail - MENA are witnessing a significant transformation of
the consumer experience with new online
Other MENA payment methods and mediums that seamlessly
Countries integrate the shopping experience with the
20% wider payments landscape.
The online conversion of the payments

experience is driven by high levels of internet
80%
penetration and mobile phone adoption, with
smartphones as the primary mode of digital
transactions. Particularly, Gen Z, have a
proclivity to pay via mobile phones and other
online channels. Today, a successful purchase is
defined by where and how a consumer
completes the transaction.
Saudi Arabia,
Egypt & UAE
Omnichannel Payments
Multichannel service delivery model with a simultaneous,
standardised and unified user experience across all channels
Businesses are recognising the importance of the information that is not siloed, where the
customer journey as a basis for identifying customer can instantaneously switch between
hidden opportunities and generating revenue. channels without interruption to the quality and
This includes defining the key stages of consumer consistency of service.
interaction, including all consumer touchpoints
The omnichannel experience in payments
and interaction channels. In an ideal journey,
struggles from a lack of interconnection of the
consumers have the same experience along
front-end (online and offline shopping cart
parallel lines of interaction, both online and
mapping, payment systems, etc.) and back-end
offline.
(inventory and logistics management). This calls
With the growing adoption of the customer for payment service providers to support
journey online, including product browsing, merchants with solutions that offer the
selection and payment, consumers are possibility to leverage payment and data
interacting with businesses and organisations reconciliation to streamline the process and
across different channels constantly, both online better understand customer buying behaviour.
and offline. The power of a brand comes through Developing a dashboard that allows retailers to
when consumers consistently receive the same compile all relevant omnichannel payment data
quality of interaction across all channels to will help them analyse client behaviour and
facilitate a seamless and cohesive customer personalise their offers accordingly.
journey that is underpinned by customer
convenience.
The difference between an omnichannel and

multichannel approach to consumers is based on
real-time and accurate exchange of Check next page for graph
Introducing advanced digital payments such as P2P

payments, pay-by-link, soft POS, virtual cards, etc. are
expected to unlock the full potential of omnichannel
payments in the future.
� In the UAE, Omnichannel payments are still in offers, in which the merchant uses their own
the introduction phase and limited to smart devices (phone or tablet) to accept
multichannel options. Wider adoption of payments, is expected to unlock the full potential
payment methods that integrate online and of omnichannel payments.
offline payments such as P2P (wallets), Tap on
� In Egypt, omnichannel payments struggle from a
Phone, virtual cards and BNPL are expected to
lack of interconnection of the front-and
accelerate omnichannel payments into the
back-end, and from the continued high
growth phase.
penetration of cash-on-delivery—estimated to
� For Saudi Arabia, as businesses aim to offer be around 50%. Growing consumer interest in
online and offline purchasing, the two worlds are digital cards, SMS payments, digital money
not yet interconnected, and only a few payment transfer apps and instant payment services is
providers offer the service to retailers. Increased resulting in merchants looking for payment
adoption of advanced P2P payments, including service providers that offer a blend of options to
pay-by-link as well as the use of Soft POS enhance the overall customer checkout experience.
Current and forecast adoption of Omnichannel Payments¹

(2022) (Until 2025)

Digital Payment Portals
(In-App Payments)
Digital payment touchpoints hosted by service providers or external
third parties to provide checkout and payment processing services
Digital payment portals provide an efficient and and leveraging payment portals to offer a full
customer-friendly means of payment. Although end-to-end customer journey.
still in their early growth phase, digital payment
Social media now provides a variety of options
portals are becoming the preferred de-facto
for payments, depending on the merchant. This
medium for consumer purchases and
begins with payment links that route the
transactions. This unique payment offering
consumer to secure payment portals for
allows consumers to conduct the entirety of the
seamless transactions, hosting in-app payment
customer journey within the digital space, and
portals either entirely or partially onsite, or
with the advent of digital wallets, it has never
redirecting customers to an external service
been easier to click and pay.
provider for checkout and payment processing
Whether it’s paying the bills, purchasing a services.
product, subscribing to an application, or even
Customers are offered a wide array of payment
buying an airplane ticket, it can all be done
options including BNPL, digital wallets, credit,
online with the convenience of an integrated
debit and prepaid cards and, in some cases,
payment portal that complements the user
even cryptocurrency. Security and confidence in
journey and is interconnected with the wider
merchant websites remain the key
network of payment-related organisations.
decision-making factor for consumers to choose
Pure online retail players are the leaders in the the best-suited digital payment portal.
region in using payment portals to complement
their business model. However, social media
websites and dedicated retailer apps are also
capitalising on the shift towards online buying
by acting as an online retail space for products Check next page for graph
Social media as a pure-play online retail place is likely
to be a game-changer in online purchases and digital
payments, especially among the youth.
� In-app purchases have already gained traction customer confidence in their in-app payment
in the fashion and electronics segments in the services on social media, where consumer trust
UAE. Players in the travel industry, among in terms of security is low.

others, are expected to follow, addressing
� In-app payments are at an early stage of
consumer demand through their social media
development in Egypt but are expected to see
and driving growth in adoption of in-app
strong growth on the back of rising social media
payments.
interaction among consumers. In-app
� Saudi Arabia is one of the most active countries payments are expected to increasingly allow
for social media, and a growing number of users micro-enterprises, such as tutoring, personal
want to be able to make purchases without training or household services that sell primarily
leaving the app. Merchants are yet to establish via social media, to offer payment options.
Current and forecast adoption of In-App Payments¹
Intoduction² Growth³ Maturity⁴ Decline⁵

(2022) (Until 2025)

Cross-Border Payments
Payment transactions that happen between consumer
and merchant or between two merchants across more than one country
There are many factors that inhibit cross-border There is a concentrated global effort towards
payments from replicating the effectiveness, realising an effective cross-border payments
cost efficiency and speed of domestic digital framework, led by major multilateral
financial services, such as difficult policy organisations (such as the G20), with several
requirements and complex stakeholder countries setting up bilateral and/or regional
interaction frameworks. According to the relationships to standardise and improve
Financial Stability Board¹, “for too long cross-border payment systems.
cross-border payments have faced four
In the MENA region, cross-border payments are
particular challenges: high costs, low speed,
becoming increasingly important for
limited access and insufficient transparency”.
stakeholders such as expats sending money
Two key drivers are needed to unlock the home or businesses capitalising on
prospects for seamless, truly global and international digital commerce opportunities.
cost-efficient cross-border payments. These are
cutting out payment intermediaries and
interoperability between payment networks.
The traditional banking model for cross-border

transactions charges significant tolls as money
passes through several banking jurisdictions,
significantly impacting the payee’s wallet size.
Meanwhile, current closed-loop systems are not
interoperable, thereby limiting reach. Check next page for graph
¹ The Financial Stability Board is an international organisation based in Basel Switzerland,

whose main function is to monitor and make recommendations about the global financial system.
As social media and online pure-play retailers bridge the
geographical divide, there is a growing need for an
interface that offers seamless payments through
multiple currencies.
� The ubiquitous digital infrastructure and high through a single payment portal.
expat population in the UAE provide ideal To simplify cross-border purchasing, Saudi banks
conditions for cross-border commerce. have begun issuing multi-currency credit cards
Increasing offerings of multi-currency prepaid that may be loaded with the desired currency
credit cards and anticipated growth in and used to make transactions.
cross-border social media in-app payments is
� Cross-border trade is yet to gain popularity in
likely to continue driving multi-currency
Egypt and traders still face many legal
shopping in the UAE.
barriers. Some start-ups are addressing this
� Demand for merchants in Saudi Arabia to problem by offering intermediary services to
expand into multiple other countries is growing enable Egyptians who only have local payments
and with it demand for PSPs that can provide the options to buy from foreign countries.
flexibility to offer multiple currency payments
Current and forecast adoption of Cross-Border Payments¹

(2022) (Until 2025)

Super Apps
One-stop-shop application model offering a diversified
portfolio of services in-house or through third parties
Providers from start-ups to scaleups are providers. Hence, super apps could face
focusing more on single-solution app competition from online pure-play retailers as
development to meet consumer demand for a the latter continue to include more product
single app tailored to everyday needs. Super categories, helping smaller merchants to
apps are digital systems centralised through expand their consumer base.
offering an array of services for consumers.
The benefits of super apps extend to the
Super apps can differ in terms of construction,
unbanked and underbanked segments of the
with one type being a single interface where
population, increasing financial inclusion and
all services are provided by one organisation,
offering users their first glimpse into the
and another consisting of multiple service
banking sector. This builds the much-needed
organisations that individually contribute in
financial literacy skills that could potentially
the back-end to create a unique service
drive engagement in the banking sector, in
portfolio with a unified user experience. With
addition to registering a bulk of transactions
the latter, merchants will need to decide early
that take place in the informal economy.
on whether to remain independent or seek
collaborations in developing super apps.
Super apps are still in the development phase

in the region but have been gaining
momentum as the appetite for apps that offer
several services is growing. This is expected to
feed into intense competition for consumer
spending between banks, pure play online
retail players and third-party payment Check next page for graph
According to an EIU survey conducted in October 2020,
“over a third of global executives believe it’s highly likely
that the bulk of financial transactions will take place
through a single super app within the next decade”.
� Super apps are at an early stage of term when consolidation among players has
development in the UAE and are expected to progressed to the point where they have more
see healthy growth over the next two to three negotiating powers with partners.
years as digital payment innovations are
� Egypt is increasingly seeing apps that offer not
introduced.
only payment services but also provide
� Super Apps are in a nascent stage in Saudi financing, fostering partnerships between
Arabia but are expected to see some initial players such as wallet providers and banks.
growth over the next two to three years, offering Providers are expected to differentiate
consumers a one-stop solution for all their daily themselves to become the leading super app
needs. Due to the fragmented payment provider that serves all client segments and eliminates
landscape, stronger development of super the need to utilise separate applications for
apps is anticipated to take place in the medium different services.
Current and forecast adoption of Super Apps¹

(2022) (Until 2025)

FOSTERING FINANCIAL
INCLUSION THROUGH
DIGITAL AND INSTANT PAYMENTS
Cash and cards are forms of instant payments The creation of global synergies in the digital
that have been favoured for decades. However, payments sphere also allows businesses to reach
for the purposes of this whitepaper, instant international geographies with ease and at low
payments refers to digitally driven modes of cost, while also forming partnerships and
real-time payment that are typically engaging in international commerce activity.
independent of the banking sector. Expats abroad can exploit these synergies to send
money back home instantly and at optimal costs,
There is a direct relationship between the
helping their families and loved ones with
development of digital payments and the
much-needed financial assistance, especially in
promotion of financial inclusion. Secure, fast and
the current global economic climate.
interconnected digital payments help reach
financially disadvantaged communities and Instant payments contribute to onboarding low
supercharge their engagement in the formal income and unbanked segments of the
economy. This enables the creation of wealth and population into the formal economy by providing
prosperity for communities everywhere and an accessible payment option.
provides an effective lens for the government to
form effective policy decisions through the
availability of robust data analytics.
Instant Payments
Electronic payment transactions processed
in real time, 24 hours a day, 365 days a year where the funds are made
immediately available for use by the recipient
The transfer of funds instantly and without Digital intermediaries and industry service
interruption at any point in time through a providers that embed instant payment provisions
digital medium denotes a real-time payment. in their applications will propel the growth of
These are typically low-value/high-volume super apps in digital payments. There are several
payments and limited to domestic established cases of instant payments boosting
non-interoperable transfers. super app adoption in many countries around the
world.
The explosive growth of instant payments can
mainly be attributed to consumer expectations
of convenience, affordability and ease of use. In
addition, they facilitate business transactions by
making the exchange of goods and services more
timely, effective and accessible. Alias identities,
such as a mobile number or email address, are
expected to be implemented soon to support
more convenient transactions, with the central
government acting as an enabler.
Instant payments applications are expected to evolve

further, adding to stakeholder networks and creating
seamless user interfaces for consumers and businesses.
� The UAE is on the verge of an instant payment � Egypt's Instant Payment Network (IPN),
revolution. Under the National Payment launched in 2022, allows instant payments
Systems Strategy (NPSS), government aims to between accounts at different banks and the
provide cutting-edge payment services, ability to transfer money from bank accounts to
transactions will be enabled 24/7/365 to ensure wallets. While transfers from wallets to bank
financial stability across all merchants and accounts are currently not possible, it is a service
consumers. that will likely be added soon to offer a full
transaction cycle. It is expected that in the next
� With instant payments already in place in Saudi
phase, intermediaries and payment providers
Arabia, the evolution of this trend is anticipated
will be allowed to launch their own instant
to involve the development of an even stronger
payment services in their apps, which could
network among stakeholders and the
propel the growth super apps as liquidity of
refinement of offers by making the user
many services will be more secure.
interface and experience seamless.
Current and forecast adoption of Instant Payments¹

(2022) (Until 2025)

Person-to-person (P2P) Payments
Instant electronic transfer of funds from one person to another via a digital medium
P2P transfers are the most popular subset of To accelerate the P2P payments environment,
instant payments and witnessed the fastest new fintech partnerships are underway to offer
growth both regionally and globally. It is worth additional services targeting the Gen Z
highlighting that this payment method has had a population, such as microfinance for purchases.
remarkable impact on low- and middle-income Most P2P transactions are restricted to a single
segments of the population. payment medium, however, development of a
unified interface that would enable
According to a study by Harvard Business School,
interoperability of transactions between
“These technologies are thought to improve
multiple mediums is underway. The potential
welfare, especially among the many who live pay
for this, once realised, would be tremendous
check to pay check, for whom payment delays
and a game changer in P2P payments, enabling
can be extremely costly. As the economy
widespread adoption among stakeholders.
becomes increasingly digitalised, policymakers
argue that increasing access to digital payments,
specifically, is critical to prevent further
exclusion of those who are already only
marginally integrated in the formal economy”.
The P2P payment model is expected to expand into used

goods. Person-to-Merchant (P2M) and
Merchant-to-Merchant (M2M) payments are expected to
record a higher volume of transactions than P2P payments
and will be the focus of future development.
� In the UAE, P2P payments are relatively new, � P2P payments have historically gained significant
and on the verge of embarking on a growth traction in Egypt mainly led by wallets offered by
phase, with most cases still limited to money telecom service providers. Providers have
transfers between users. Microfinance emerges continuously expanded their services, combining
as the next big theme for P2P Payments". P2P transfers with wallet operations. The next
expected steps will expand the use case for
� Saudi Arabia is expected to be the front runner
P2P payments across several cash applications.
in establishing unified architecture to enable
Cash-only sectors will thus be included in the
transactions across wallets. Underway but not
formal payments sector and in some cases, even
yet available are investigations towards a unified
in financing schemes as this leads, to financial
interface that would enable transactions
inclusion and maturity in Egypt.
between multiple wallets. Once operational,
they are anticipated to be a game-changer in
P2P payments, enabling widespread adoption
between businesses and consumers.
Current and forecast adoption of P2P Payments¹

(2022) (Until 2025)

MSME Lending
Providing MSMEs access to finance leveraging
digitised financial records and credit analytics
The contribution of Micro, Small and Medium of formal credit. Merchants need loans that are
Enterprises (MSMEs) represents a significant flexible and tailored to their exact needs. As a
portion of the economy, in addition to providing result, bullet loans are increasingly in demand.
much-needed goods and services to underserved Fintechs are now working closely with banks and
segments of the population, in both rural and regulators to tailor the onboarding process and
remote areas. Traditionally, these enterprises requirements for a loan so it is viable using data
have been relatively resistant to adopting digital analytics and AI.
payment systems, relying on cash as the primary
With a clear financial history, banking and
means of exchanging value. This is partly due to
non-banking financial institutions alike
cultural and social factors but also attributed to
(including payment service providers) will
the lack of infrastructure needed to effectively
provide the much-needed funding. According to
run a digital payments system.
the World Bank, “70% of MSMEs lack access to
There are many benefits for MSMEs in adopting formal credit.”⁷ This provides a significant
digital payments as a means of exchange, with a opportunity with socioeconomic benefits.
primary focus on encouraging financial inclusion Businesses that are integrated into the digital
and participation in the formal economy. Digital economy will be able to capitalise on hidden
payments provide businesses with unique data industry potential, reach wider audiences and
analytics that support development and growth, increase revenue.
including generating mission-critical financial,
customer relationship and inventory data.
The availability of financial analytics is crucial for

businesses seeking access to finance in the form Check next page for graph
Instant credit scoring and quick processing is expected to

enable growth in MSME lending.
Source: ⁷ “Two Trillion and counting”, International Finance Corporation (World Bank Group) and McKinsey&Company
� Merchant lending through fintech is in an early also has a very strong use case for P2P lending
adoption phase in the UAE, allowing merchants with microfinance offerings being developed to
to access low-cost borrowing instantly. Along assist MSMEs in obtaining easy and seamless
with P2P payments, P2P lending for merchants funding.
is also expected to grow gradually with instant
� The gap for merchant credit, especially for
credit scoring and quick processing times.
MSMEs, is large and lucrative in Egypt. This has
� To enhance merchant lending especially to micro led to the introduction of BNPL in B2B and
and small business in Saudi Arabia, new lending open-finance, with the latter allowing even
schemes include digital pre-financing of non-fintech stakeholders and delivery companies
outstanding invoices as well as BNPL offers for to become part of the funding process.
merchants to secure their liquidity. Saudi Arabia
Current and forecast adoption of MSMEs Lending¹

(2022) (Until 2025)

SECTION – 5
WHERE DO
INDUSTRIES STAND
IN ADOPTING
DIGITAL PAYMENTS?
Adoption of the various payment themes has
been very different from one country to
another. Saudi Arabia, the UAE and Egypt, the
three core countries of the MENA region, have
different industries and stories driving the
penetration and growth of digital payments.
Let's view these three countries

broadly then take a closer look
at each country’s performance.
Category Sizing - Total (UAE, Saudi Arabia & Egypt):
Digital Payments industry size in Value terms (USD Bn.)
Digital Payments industry size - Total (UAE, Saudi Arabia & Egypt), 2021 (USD Bn.)
55%
CAGR 2021-2023 (%)
0
Online Retail
Lodging
Ticketing
Education
Airlines (direct)
Streaming Service
Insurance
Healthcare
Bill payments
Utilities
Transport
Government
CAGR 45.08% 93.48% 5.89% -6.15% -8.47% 24.31% -9.74% 46.14% 17.69% 14.32% 10.39% 16.30% 21.90% 46.77%
2019-2021
CAGR 20.41% 18.10% 26.58% 27.43% 23.21% 18.65% 36.60% 20.69% 15.31% 8.34% 10.54% 10.38% 18.52% 8.55%
2021-2023

The UAE’s
Digital payments penetration is primarily driven transformed into online fulfilment centres no
by online retail and bill payments. Besides longer offering on-premises service to
being the largest, these industries are also the customers) are boosting online retail growth by
fastest growing in the country. In addition to decreasing operational costs and providing
online pure-play retailers, dark shop locations competitive prices with efficient delivery.
(former brick & mortar stores that have
Digital Payments industry size Across Categories (United Arab Emirates)

45%
CAGR 2021-2023 (%)
Ticketing
Lodging
Education
Insurance
Healthcare
Online Retail
Bill payments
Airlines
Utilities
Government
Transport
On-demand Online
entertainment
IN SAUDI ARABIA
The government played a large role in the As a first step, the Saudi governmental sector has
growth of digital payments, as Saudi nationals almost completely shifted to digital payment
lacked confidence in both purchasing and methods for all outward payments to businesses,
transacting online. Consumers relied heavily on individuals, as well as other government agencies.
traditional payment methods, such as This digital transformation by the government has
cash/cheques, credit cards and money transfers. boosted consumer trust and adoption of digital
Saudi Vision 2030 promotes digital payments payments. Consumer confidence is actively
with the aim of transforming Saudi Arabia into a growing, driven by bill payments and followed
cashless society, with an initial target of closely by government payments.
reaching 70% non-cash payments by 2025.
Digital Payments industry size Across Categories (Saudi Arabia)

45%
CAGR 2021-2023 (%)
Ticketing
Lodging
Education
Insurance
Healthcare
Online Retail
Airlines
Bill payments
Utilities
On-demand Online
entertainment
Government
Transport
EGYPT
Egypt still relies heavily on cash for several Online retail and utility payments are the
reasons. As of 2021, rural areas constitute more largest industries using digital payments in the
than 57% of the population, 67% of the country. However, other categories are
population is unbanked, and only 3% has access experiencing rapid growth, such as consumer
to credit cards. Instead of hindering the growth foodservice, which has seen a strong uptake since
of digital payments, these factors have driven the pandemic, and travel intermediaries, which
its expansion, with Egypt’s lower income classes moved to online bookings to provide added
relying on digital wallets as an alternative to convenience.
bank accounts. For this reason, bill payments,
Digital Payments industry size Across Categories (Egypt)

45%
CAGR 2021-2023 (%)
Ticketing
Lodging
Education
Insurance
Healthcare
Online Retail
Airlines
Bill payments
Utilities
On-demand Online
entertainment
Government
Transport
DIGITAL PAYMENTS
ADOPTION DYNAMICS
Amazon Payment Services, along with Euromonitor, identified 14 of the

fastest-growing industries in digital payments. These were then mapped and grouped
into four categories: Online Retail, Travel, Essentials and Leisure. Each of these
categories has different dynamics and drivers in each of the three core countries
covered.
Online Retail Travel
Essentials Leisure
consumers to expand their basket size and
merchants to grow their customer base. The
pandemic also played a pivotal role in
strengthening and expanding digital payments
across online retail sub-categories during
lockdowns.
Many consumers maintained their online

shopping habits even after lockdown restrictions
ONLINE RETAIL
were lifted, mainly due to efficiency, convenience
and positive experiences during the pandemic.
SALES OF NEW
AND USED GOODS
Online sales of new and used goods typically has
all products sold by retailers to consumers. This
includes purchases made through pure-play or
brick-and-mortar retailers having online
presence. This category further expands into
several sub-categories such as many
sub-categories, such as Apparel and Footwear,
Beauty and Personal Care, Appliances,
Electronics, Healthcare products, Food &
Beverages, Pet Care and Toys, among several
others.
The overall category is transitioning to a solid

growth trajectory, aided in part by rapidly
growing digital payment options such as BNPL
and P2P payments, that encourage growth in
small and medium-sized businesses. This allows
Rapid growth in adoption of newer digital payment

methodologies is a key driver for growth in consumer base
and average online spend.
Source: Euromonitor International analysis based on primary research including trade and expert interviews.
This category has been the strongest driver of digital
payments penetration in the UAE, disrupting the traditionally
cash-based society, particularly within electronics, fashion,
beauty, home-improvement and daily necessities, such as
food and beverages.
Digital Payments growth in

Online retail sales of new and used goods
CAGR
2021-2023
20.1%
USD bn
18.1%
29.0%
2019 2020 2021 2022 2023

EGYPT SAUDI ARABIA UAE
Source: Euromonitor International analysis based on primary and secondary research
Dark retail businesses (which have converted to be a strong support system among businesses,
brick-and-mortar to a center for fulfillment allowing them to find quick-access, limited funding
operations) contribute to the growth of online outside of the banking industry. Currently,
retail sales in the UAE, as they offer consumers merchants offer ease of shopping with
affordable prices by reducing operational costs. interest-free instalments for big-ticket purchases,
while smaller purchases show a strong potential
Consumers in the UAE prefer instant payments and
for BNPL. Consumers now have a greater degree of
social media embedded payments, which drives
confidence in the transaction process, thereby
the adoption of both in-app and P2P payments.
indicating higher maturity in digital payments in
As a regional hub for start-ups promoting online
the country.
customer engagement, merchant lending proves
Saudi Arabia is more traditional, with a brick & mortar focused

society that prefers cash payments and has, culturally, been
hesitant about adopting digital payments.
Consumer electronics is the largest category in

online retail sales (in value terms) in Saudi
Arabia, closely followed by fashion (apparel and
footwear).
The pandemic drove a surge in demand for online

retail. These two categories accounted for
almost half of online retail sales in in the country
in 2021. However, food and beverages is the
fastest growing online retail sales category,
having more than doubled in 2020, and showing
doubled-digit growth in 2021. This is driving
leading grocery retailers to increase their
investment in online sales by opening dedicated
fulfilment centres. Leading pure-play
online aggregators are also paying more
digital payment systems, such as mobile wallets
attention to this category.
and BNPL, will also drive growth in this category,
Online retail sales is expected to witness strong as young and tech-savvy Gen Z and Millennials
growth in the next two years, as consumers look for one-stop and social commerce solutions,
continue to gain confidence. The maturation of with several players already offering this service.
Online retail sales is growing steadily in Egypt, driven primarily
by consumer electronics, which represented approximately 45%
of total online sales in value terms in 2021.
Even though Egypt did not go into full Several pure-play online retail players have
lockdown during the pandemic, many performed strongly in Egypt, offering consumers
consumers began to explore online shopping a wide portfolio of products and easy payment
due to fear of contagion. The demand for online systems. As Egypt remains a largely cash-based
retail was further boosted by the increasing society, some companies accept
coverage of smartphones in the country, as cash-on-delivery payments, but are encouraging
mobile phone operators continuously invest in customers to switch to more efficient and secure
the digital space. digital payment methods. This transition,
alongside lucrative digital payment options,
such as BNPL, Instalments and subscription
service for faster delivery and better deals,
stimulated consumer interest thereby increasing
sales within online retail.
As Egyptian consumers become more

comfortable with the idea of online shopping,
Online retail sales is expected to continue
expanding rapidly in the foreseeable future.
Increased smartphone usage, with cheaper and
faster mobile internet access, will provide a
further boost, as most consumers tend to shop
via mobile phones rather than computers or
tablets. Store-based retailers will soon follow
suit, investing strongly in becoming available
online to compete in their relevant market
segments, as they shift towards a more
omnichannel model.
The governments of all
three countries are
investing strongly in
reactivating this sector
post-pandemic, and
TRAVEL businesses are eager to

recover losses incurred
in 2020 and 2021.
Airlines Lodging Ticketing
Travel
Intermediaries Transport
Travel is a large category that encompasses five investment of more than USD27.2 billion for its
sub-categories: Airlines (online airline ticket Tourism Strategy 2031.
sales), Lodging, Ticketing (online sales of
Prior to the FIFA World Cup event in Qatar,
tickets to sporting events, concerts, theatre,
Saudi Arabia registered the highest number of
etc.), Travel Intermediaries (travel retailers,
visitors to the MENA region in 2022, surpassing
tour operators) and Transport (online sales of
its pre-pandemic levels by 121% to reach 18
transportation, excluding airlines, but including
million tourists, followed closely by the UAE
shared mobility).
with 14.8 million visitors. Egypt, despite
Whether it’s for religious, cultural or attracting a far smaller number of visitors, saw
archaeological purposes, travel and tourism are tourism rebound strongly, with 4.9 million
strong economic drivers across Saudi Arabia, the visitors in the first half of 2002 representing an
UAE and Egypt. The Saudi government aims to 85.4% increase over the same period the
attract 100 million visitors through a planned previous year. Within travel and tourism,
investment of USD1 trillion over a decade as part industries are adopting digital payments at
of Saudi Vision 2030, while the Egyptian different rates, and for various reasons. For
government is investing USD500 million in its instance, in Saudi Arabia, travel industries
2021-2022 fiscal year. The UAE wants to attract currently use instalments, cross-border and
"Source: Euromonitor International based on primary an secondary research including

press releases by Atalayar, 'Saudi Arabia is the Arab country with the most tourists in 2022', October 2022"
instant payments. Super apps that integrate Egypt has strong use of BNPL and instalments
several travel services are envisioned in the short across travel categories, except for transport.
term, using BNPL methods, while in-app and P2P Travel intermediaries are yet to adopt in-app
payments could be integrated in the longer term. payments. Super apps and instant payments are
expected to be used in the future.
BNPL, instalments, in-app and cross-border
payments are currently in use by most UAE While airlines and travel intermediaries lead
industries within travel but have a lot of room to online sales within travel in the UAE and Saudi
mature and be embraced by more companies and Arabia, ticketing and transport are the main
customers. Merchant lending and instant drivers of online travel sales in Egypt. This is
payments are not currently used by all travel mainly due to ticketing and transport being
industries and show potential for strong growth cheaper than airline tickets, as Egyptians still
in the future. prefer cash, reserving digital payments for
smaller-value purchases.
Digital Payments growth in Travel
CAGR
2021-2023
27.1%
24.1%
USD bn
16.3%
2019 2020 2021 2022 2023

Airlines
Online sales of airline tickets sold separately
by intermediaries and direct suppliers to leisure travellers.
Online airline sales in Saudi Arabia were growing airlines will ultimately lead to the emergence of
prior to the pandemic. In the first year of the new competitors, which will further boost online
pandemic, online sales surpassed offline sales and mobile bookings. Egypt saw strong demand
for the first time and has been growing ever for cheaper flights in 2021, especially among
since. This category reached double the size of local tourists, leading low-cost airlines to gain
offline sales in 2021, and are expected to ground on traditional airlines. This growth
maintain this gap in the forecast period. This enabled low-cost airlines to expand their routes
shift from offline to online was driven primarily and provide foreign tourists with convenient and
by the pandemic and the growth of private affordable domestic and regional travel options.
on-demand flights within the country. Airlines in Tourism is anticipated to grow in Egypt, due to
Saudi Arabia and the UAE show the highest value the government's domestic travel and tourism
of transactions for online transactions within expansion strategy, which will considerably
travel, and among the highest predicted CAGRs enhance the country's ability to accommodate
over the 2021-2023 period (30.8% in the UAE the needs of international tourists. In addition,
and 26.3% in Saudi Arabia). Customers are eager the long-awaited Sphinx International Airport is
to spend on luxury destinations and demand nearing completion, which will alleviate pressure
continues to increase, driving online bookings. on Cairo International Airport, boosting Egypt's
Meanwhile, the growing popularity of low-cost travel and tourism industry.
Digital Payments growth in Airlines
CAGR
2021-2023
USD bn
30.8%
26.3%
8.9%
2019 2020 2021 2022 2023

Travel
Intermediaries
Online sales through intermediate companies like tour operators or agents
that sell travel packages and components together (including traditional brick & mortar
travel agencies, online travel agencies and travel management companies).
Despite an overall decline due to movement respectively, in the 2021 to 2023 period. BNPL
restrictions during the pandemic, travel and instalment options are set to see promising
intermediaries saw a strong shift from proximity growth in the forecast period in these two
to online payments in Saudi Arabia and the UAE. countries, as consumers prefer to pay for larger
With travel uncertainties during the pandemic travel packages in instalments. In Egypt,
and the gradual lifting of restrictions, many digitalisation has driven the emergence of
consumers preferred booking hotels, flights and several online travel start-ups, which are
insurance through travel intermediaries, as they expected to grow significantly over the 2021 to
provided accurate information regarding health 2023 period. Digital initiatives of this kind are
protocols and entry restrictions in destinations, expected to become increasingly important
all the while offering flexible bookings and during the forecast period as Egypt's tourism
cancellation options. This integration of services, industry moves inexorably to online bookings,
coupled with the ease of online payments, with a forecast CAGR of 33.6% for online
encouraged consumers to reach out to these payments to travel intermediaries. Travel
service providers, instead of handling their intermediaries in Egypt also offer instalment and
bookings themselves. Online payments to travel BNPL options. In-app payments are also growing,
intermediaries in Saudi Arabia and the UAE are as Egyptians prefer this digital payment method.
expected to witness CAGRs of 13.9% and 20.1%,
Digital Payments growth in Travel Intermediaries
CAGR
2021-2023
USD bn
20.1%
13.9%
33.6%
2019 2020 2021 2022 2023

Lodging
Online sales of lodging services as a single component,
including hotels, short-term rental intermediaries, and others made
by intermediaries and direct suppliers to leisure travellers.
As the tourism industry regains its pre-pandemic religious tourism. UAE, on the other hand, is
buzz in all three countries, lodging and ticketing focusing on sustainable tourism, which will
are also growing but shifting to digital bookings continue to generate attention in 2022, with
and payments. Travel restrictions highly eco-friendly lodging and activities aimed at
impacted lodging sales during the pandemic but upscale millennial and Gen Z consumers.
show promising signs of recovery in the 2021 to Meanwhile, Egypt's growing focus on tourism
2023 period, with Saudi Arabia growing in luxury and approved construction of 20 hotels in 2021
hotels and short-term rentals catering to is expected to drive this segment further.
Digital Payments growth in Lodging
CAGR
2021-2023
23.7%
USD bn
24.5%
20.9%
2019 2020 2021 2022 2023

Ticketing
Online purchases of tickets to sporting events, cinemas
and live performances like concerts, theatre, dance, comedy, or readings.
This category includes the first-time purchase of event tickets as well as tickets
sold in secondary online retail spaces, such as ticket brokers orticketing websites.
Ticketing is poised for strong growth in the travelling. Digital payment options vary within
forecast period, with digital payments set to each country, with the most prominent being
witness CAGRs of 46.5% for Saudi Arabia, 40.8% in-app payments, and BNPL for larger events.
for the UAE and 23.2% for Egypt. Digital Super apps have strong potential to integrate
payment growth is driven by consumers multiple events through a single interface in all
planning their trips in advance and purchasing three countries.
tickets online for local attractions prior to
Digital Payments growth in Ticketing
CAGR
2021-2023
40.8%
USD bn
23.2%
46.5%
2019 2020 2021 2022 2023

Transport
Online purchases of transportation and mobility-related services,
including shared mobility (ride-hailing, ridesharing, car-sharing, scooter sharing
and bike sharing), rail, ferries, coach buses, car rental, taxis and other mass
transportation commuting expenditures. This category excludes airlines.
Transport has, in recent times, seen a strong The UAE and Saudi Arabia also show promising
adoption of digital payments in Egypt. In 2020, growth for transport (CAGRs of 33.4% and
rail and metro facilities were among the most 54.1%, respectively, for 2021-2023), as both
affected transport sectors. However, the countries offer digital payment solutions for bus
transport industry witnessed positive growth as and metro travel via their websites. Gen Z is a
Egyptians reached for online payment methods driving force behind the growth of digital
to purchase tickets. In-app, P2P and super app payments for transport in these two countries,
payments enable Egyptians to buy tickets as the use of public transport is high among
without the hassle of going to a kiosk. These young individuals who move around frequently
digital payment methods also enable them to but are yet to own a car.
pay for car-, scooter- and bike-sharing services.
Digital Payments growth in Transport
CAGR
2021-2023
33.4%
11.0%
USD bn
54.1%
2019 2020 2021 2022 2023

Essentials encompasses all online payments
made for everyday needs, such as Utilities
(electricity, water, sewage), Healthcare (online
consultations, e-health apps), Insurance (health
and motor insurance only), Education (tuition
fees, online courses, certifications), Bill
Payments (phone, cable, gym and other regular
payments) and Government (visa fees incurred
by expats, vehicle renewal, registration and
maintenance costs, accommodation transfers,
payment of traffic fines, municipality and
work-permit-related expenditures). Essentials is
ESSENTIALS
a very important group of industries. They
represent a substantial segment of online
payments in all three countries (69% in Saudi
Arabia, 61.4% in Egypt and 46.8% in the UAE, as
of 2021). Bill payments is the largest category
within Essentials, as well as the largest category
among all 14 analysed industries in Egypt and
Saudi Arabia, and second only to online retail in
the UAE. Utilities is the third-largest online
Utilities Healthcare Insurance
payment category in all three countries.
Education Bill Payments Government
Digital Payments growth in Essentials
CAGR
2021-2023
10.5%
USD bn
13.1%
18.6%
2019 2020 2021 2022 2023

Bill Payments & Utilities
Online payments made from a credit card or bank account to a vendor for services like phone,
cable, gym, memberships, etc.
Online payments of electricity, water and sewage bills made by households. This includes
payments made to the government by businesses and consumers.
Digital wallets have been key to implementing app in Saudi Arabia soon, but no exact date is
digital payments for these two sub-categories given. In Egypt, utilities have traditionally been
in all three countries, with telecom providers paid for with cash, but there has been a shift
leading this shift. 2022 saw the introduction of toward digital payments. The Egyptian
a dedicated super app in the first quarter in government allowed the introduction of a
Egypt and the third quarter in UAE, which player in online payments and digital financing
enables consumers to pay for many services and in 2019, allowing citizens to pay all their
recurring payments at the click of a button. This expenses in one place. The combination of
super app has received strong acceptance in payment convenience and social distancing
Egypt and is likely to harness the same growth measures implemented in 2020 led to a
in the UAE. Its website claims it will launch the significant trend towards digital payments.
Digital Payments growth in Bill Payments & Utilities
CAGR
2021-2023
10.7%
USD bn
14.3%
19.3%
2019 2020 2021 2022 2023

Insurance
Online payments of health and motor insurance only.
Such as life or travel are either insignificant or paid in person.
While vehicle insurance saw an overall decline digital payments in this category. In Saudi
during the pandemic, as car purchases Arabia, online insurance payments are primarily
decreased, health insurance grew strongly in all made through insurance brokers. However, as
three countries. Uninsured consumers were the pandemic eased, consumers began
eager to find a policy that covered COVID-related purchasing insurance in person again, leading to
complications, as mortality was high during the slower forecast growth in digital payments
early phases of the pandemic, and (1.2% CAGR for 2021-2023). The Egyptian
hospitalisation was costly, especially for patients landscape for health insurance is more
admitted to ICU. In the UAE, online insurance traditional than the two other countries, with
payments are traditionally processed by most online insurance payments processed by
insurance agents or aggregators. However, insurance agents who recommend the most
customers are now beginning to buy directly by suitable insurance coverage. The pandemic,
analysing coverage, liability reimbursements, however, prompted a move towards smartphone
and payment methods. Driven by convenience payments and instant payments, driving the
and attractive pricing, demand for online motor growth of digital payments for this category
and health insurance purchases will likely drive (29.1% CAGR for 2021-2023).
Digital Payments growth in Insurance
CAGR
2021-2023
USD bn
1.2%
29.1%
11.5%
2019 2020 2021 2022 2023

Healthcare
Online payments for online consultations and e-health apps.
The pandemic strongly impacted the healthcare predicted to slow down over the forecast period.
category, as patients and health staff attempted However, there is long-term potential for it to
to mitigate the spread of COVID-19. This be expanded in the public and private sector,
prompted the growth of online consultations including online payment for products and
and e-health apps, as well as online bill services. Consumers and doctors prefer
payments in Saudi Arabia, the UAE and Egypt in-person visits over online consultations, as
(CAGRs of 30.9%, 81.5%, and 49.2%, part of the diagnosis process involves seeing the
respectively, for 2019-2021). With the pandemic patient and conducting in-person tests.
under control and consumers seeing Teleconsultations will remain niche for less
practitioners in person again, e-healthcare is critical ailments and secondary visits.
Digital Payments growth in Healthcare
CAGR
2021-2023
5.4%
USD bn
14.2%
9.6%
2019 2020 2021 2022 2023

Education
Online payments of tuition fees, online courses and certifications.
Another category that was strongly impacted by financing for parents using fintech apps that
the pandemic was education. Most schools and offer instant and BNPL payment options for
universities globally shifted to online formats for educational institutions, with real-time tracking
almost two years. This forced schools and and reconciliation statements. In Saudi Arabia,
universities that did not have an online interface consumers can pay for education fees digitally
to either develop their medium or collaborate through instalments and instant payments.
with existing service providers. This also affected Meanwhile, in Egypt, consumers are offered
payments, as students traditionally paid for their several digital payment options such as BNPL,
tuition in school offices. The digitalisation of instalments, in-app and instant payments. The
classes also brought a wide range of online need for online payments will increase as more
payment options to simplify payments for institutions use digital payment methods to
parents and students. In the UAE, digital wallets ensure parents and students have several
facilitate digital payments and provide quick options available.
Digital Payments growth in Education
CAGR
2021-2023
23.5%
USD bn
6.7%
16%
2019 2020 2021 2022 2023

Government
Online payments of government services including visa expenses incurred by expats,
vehicle renewal, registration and maintenance costs, accommodation transfers, payment
of traffic fines, municipality and work-permit-related expenditures.
Government payments have a strong digital by e-wallet and mobile app payment usage. This
penetration in Saudi Arabia and the UAE as both trend is expected to continue as the government
countries are pushing towards digital continues to drive the shift to digital payments,
transformation. Saudi Arabia, as mentioned with an expected CAGR of 9.5% for the
earlier, has mandated that most incoming and 2021-2023 period. The Egyptian population has
outgoing government payments be made via not widely adopted digital payments, despite
digital payments as part of its Saudi Vision the government’s development of a portal to
2030 strategy. This trend is expected to pay fees online. This is a largely cash-based
continue as younger Saudis already use digital society, and the shift requires more effort and
payment options for government payments. incentives to switch. However, as the population
Older consumers are expected to change from gradually gravitates towards online payments,
telephone and ATM payments to digital this trend is expected to expand to government
counterparts. Growth in the forecast period is fees in the future, reaching a CAGR of 12.5% for
expected to reach a CAGR of 10.7%. The UAE is the 2021-2023 period. One prepaid card that
following a similar path to Saudi Arabia, acts as a debit card is already used to pay for
developing and promoting online payment license renewals and traffic tickets. This card
options for consumers to pay taxes and service can also be used for local payments, including
fees. As a result, there has been significant government fees.
growth in government fees paid online, driven
Digital Payments growth in Government
CAGR
2021-2023
10.7%
USD bn
9.5%
12.5%
2019 2020 2021 2022 2023

Across the broad remit of the Leisure category,
two industries were determined as the most
important for digital payments in all three
countries. Consumer Foodservice, which refers to
meals and refreshments prepared outside the
home (restaurants, cafes, food delivery services),
and On-demand Online entertainment, defined
as video On-demand Online entertainment, music
On-demand Online entertainment, online and
cloud gaming, and digital subscriptions to
newspapers or magazines.
Consumer Foodservice and On-demand Online
LEISURE entertainment, have moderate penetration of

digital payments when compared to other
industries under analysis. However, these
sub-categories were among the fastest growing
during the pandemic, after Healthcare and online
retail. The fear of contagion during the lockdown
Consumer
and the monotony of being at home resulted in
On-demand
Foodservice Online entertainment significant growth in these two categories in all
three countries. Consumers’ growing need for
food delivery services drove other business
initiatives to grow, such as food aggregators (apps
that enable ordering and delivery food &
beverages from multiple sources, with easy
ordering, tracking and payment).
Digital Payments growth in Leisure
CAGR
2021-2023
18.5%
USD bn
19.8%
20.6%
2019 2020 2021 2022 2023

Online purchases of meals and refreshments prepared outside the home, specifically
those where payments are made online. Excludes cash-on-delivery or cash-on-collection.
Higher smartphone penetration and the enabled rapid growth. Local, regional and
blooming of food aggregators in the UAE were international food aggregators compete for
the main drivers for online consumer foodservice growing share of the industry. Several apps are
payments. This category grew by a CAGR of expanding to become super apps, combining
28.1% over 2019-2021. The foodservice industry other services such as groceries, ride-hailing, etc.
in the UAE offers consumers several digital
The consumer foodservice industry in Egypt is
payment options, such as In-app and instant
much more traditional. Food aggregators are
payments, as well as instalments and BNPL for
yet to penetrate the significant rural
larger-ticket items.
population. This represents a challenge for
Consumer foodservice followed a similar path in online payments for consumer foodservice and
Saudi Arabia. Driven by lockdown, this category an opportunity to uncover a solution that will
witnessed a CAGR of 149.9% for 2019-2021, with allow food aggregators to grow. During the
growth set to continue throughout the pandemic, the shift from offline to online food
2021-2023 period, albeit at a much slower rate ordering maintained steady but prolonged
(CAGR of 17.3%), as the surge in adoption of growth. The few food aggregators operating in
online ordering eased post-pandemic and the country rely heavily on younger generations
consumers are once again eating out more often. who are constantly online, such as Gen Z and
In Saudi Arabia, food aggregators were already younger Millennials.
launching services before the pandemic, which
Digital Payments growth in Consumer Foodservice
CAGR
2021-2023
17.3%
USD bn
17.6%
37.4%
2019 2020 2021 2022 2023

On-demand Online entertainment
Online purchases of streaming media services, in which the video, audio or written
content is played directly without being saved to a hard drive. This includes video
On-demand Online entertainment; music On-demand Online entertainment; online and
cloud gaming; and digital subscriptions to newspapers or magazines.
The growth of leading On-demand Online overtook traditional broadcasting in terms of its
entertainment has been fuelled by the importance to viewers. This was mainly led by
binge-watching habits of the young population in video On-demand Online entertainment with
the UAE. One leading global streaming service many households subscribed to one or more
has customised its content for the region by On-demand Online entertainment in 2022.
offering Arabic subtitles on most of its offerings. Growth rates are set to slow but remain at a high
Video streaming consumption is predicted to level due to new players and upgraded offers
increase in the country over the next 12 months, (22% CAGR for the 2021-2023 period). Gaming is
particularly among young users. The same is true also significant in Saudi Arabia. The country is
for radio streaming consumption, where the same home to one of the largest gaming communities
cohort is expected to consume more. The in the region. This community is driving demand
category experienced a 36.9% CAGR over the for cross-border and multi-currency payment
2019-2021 period. Gen Z and Millennials drive options. Instant payments are crucial in this
most streaming and gaming services in the UAE. sector as gamers want to make purchases when
In a recent survey of Gen Zs, 35% of respondents needed with no delays impeding their gaming
stated that they have paid for On-demand Online experience.
entertainment or entertainment in the past three
On-demand Online entertainment in Egypt
months, with 43% purchasing via a combination
showed strong growth from 2019 to 2021 (49.6%
of online and offline channels and 36%
CAGR), as people spent more time indoors,
purchasing only via online channels. Consumers
exploring new films and shows across numerous
find in-app payments easier than third-party
On-demand Online entertainment. However, the
links. Growth in instant payments prompted
proportion of consumers wishing to cancel their
foreign players to introduce BNPL options as an
subscriptions due to cost-cutting has hit an
alternative to post-paid payments, which offers
all-time high, resulting in a slowing of digital
ease of use for merchants and customers.
payments for On-demand Online entertainment
The review period saw a shift in the Saudi media and entertainment, leading to a deceleration in
industry as On-demand Online entertainment growth for the 2021-2023 period (8.2% CAGR).
Digital Payments growth in On-demand Online entertainment
CAGR
2021-2023
21.8%
USD bn
22.0%
8.2%
2019 2020 2021 2022 2023

SECTION – 6
CONCLUSION
Which industries will propel

digital payments into the future?
While all
categories are
expected to see
strong growth over
the next year,
Essentials, Travel,
and online retail
provide valuable
insights into the
type of digital
payments.
As governments continue to push towards a consumers seamless transactions and ease of

cashless society, building trust in digital use. However, as the category matures, growth
payments by making and accepting is expected to slow (12.1% CAGR over
Government payments directly, Essentials 2021-2023). As consumers become more
(Utilities, Healthcare, Insurance, Education, confident in the use of digital payments, other
Bill Payments, Government) will retain the categories are expected to experience more
largest share of digital payments for the dynamic growth gradually reducing Essentials'
foreseeable future across the three key MENA share of the digital payments from 62% in
geographies (Saudi Arabia, Egypt and the UAE), 2021 to 58% in 2023.
supported by Super Apps, which offer
With global travel resuming in after the In-app and instant
pandemic, Travel (Airlines, Lodging, Ticketing,
Travel Intermediaries and Transport) is payments will continue
expected to grow at a 24.0% CAGR over
2021-2023. This will be driven by Airlines and to be important for
Travel Intermediaries expanding their reach by
online retail but
partnering with larger global travel aggregators.
Cross-border and multi-currency payments consumer lending
will be key for the industries under Travel in the
foreseeable future. options like BNPL and
Online retail saw rapid growth during the instalments are
pandemic but also helped many brick & mortar
shops find online consumers and continue expected to see more
business during lockdown, through partnerships
with established pure-play online retailers. While
dynamic growth,
continued strong growth is expected as more especially for
brick & mortar shops venture into online retail,
this category was among the first to embrace big-ticket items.
digital payments and being a mature category,
growth is expected to be slower over the forecast
period (20.4% CAGR over 2021-2023).
Digital Payments industry size across industries in UAE, Saudi, & Egypt
USD Billion
2019 2020 2021 2022 2023
Essentials¹ Online Retail Travel² Leisure³ Others⁴ Total
¹ Essentials: Utilities, Healthcare, Insurance, Education, Bill Payment, Government

² Travel: Airlines, Lodging, Ticketing, Travel Intermediaries, Transport
³ Leisure: On-demand Online entertainment, Consumer Foodservice
⁴ Others: Online Retail
Why merchants must adapt to the changing
digital payments landscape?
Digital payments have significant room for growth Thus, digitalisation is becoming imperative and a
across categories led by a young population who way of life. The faster companies adopt digital
are keen to try new technologies, embracing payments, the more likely they are to forge a
change in a society where convenience is at the strong place in tomorrow’s world. Understanding
forefront of future online engagements. This the ever-changing needs of the growing Gen Z
serves as an opportunity for merchants across and Millennial consumer base is key to
industries to expand their visibility and consumer unravelling the future of digital payments.
reach online.
Consumers remain the key to unlocking the

potential of digital payments. Unlike older
generations, young people see no need to carry
money for their day-to-day transactions, stand in
line to pay bills, or even go to stores to shop for
their favourite brands when everything they want,
and need, is just a click away.
Stay tuned to the re:Imagine payments forum for more on

how consumer behaviour will impact digital payments.
What does the future beyond 2023
hold for digital payments?
Taking a birds-eye view of the road ahead, three

key pillars emerge in defining future digital
payment trends in the MENA region:
Governance
and innovation
to go hand-in-hand
Payments
everywhere,
right now
The evolving
definition of
financial inclusion
Governance and innovation
to go hand-in-hand
One of the biggest adaptations that with the UAE and Egypt following suit with
governments and central banks across the similar approaches.
region have undertaken is to become agile with
In governments’ endeavours to reach a cashless
regulations governing consumer finance and
society while being mindful of reducing security
payments. The regulatory frameworks adopted
concerns, central banks are increasingly
by different countries in the region are becoming
adopting Central Bank Digital Currencies
more malleable and expanding to include new
(CBDC), a digital token that is pegged to the
and innovative payment-related products. New
value of the country’s currency and aims to
products will focus on being ever more
provide a structured payments system similar to
consumer-centric, creating a more seamless,
cryptocurrency that gives confidence and
convenient and affordable experience.
financial security to businesses and consumers
In a survey conducted by Euromonitor alike. Bank of International Settlements reports
International with 150 merchants each in Saudi that, as of 2021, 86% of the central banks across
Arabia and the UAE in July 2022, the top 3 key the world are actively researching and in the
performance indicators identified by merchants race to launch CBDCs.
for selection of payment service providers
The Saudi Central Bank and Central Bank of UAE
included conversion rate, chargeback rate and
are jointly pursuing a CBDC as well as other
reduced fraud/failed transaction rates.
innovative uses of blockchain technology via
Despite several rules and regulations being
Project Aber. This follows several case studies
established by central banks in the region,
across the globe including The Bank of Japan’s
consumers are still apprehensive of losing their
recent digital yen trial, Sweden’s e-krona pilot,
money if something goes wrong during a
the Bahamas and Cambodia introducing their
transaction. Meanwhile the entire payments
own quasi CBDCs and the Central Bank of Nigeria
system is pushing for a cashless economy. This is
launching a CBDC program for the eNaira.
where transparency in regulations and openness
to innovation comes into play and is key to build In addition to this, governments are coming
consumer confidence. together across borders to facilitate convenient,
secure and real-time payments. This is to be
Governments are taking a holistic approach to
carried forward through the Buna Payments
going cashless, both from a consumer and a
system, owned by the Arab Monetary Fund which
central bank perspective. Central banks are
provides seamless transactions between central
establishing regulatory sandboxes involving all
banks in the Arab region and the launch of AFAQ
players including the regulator, banking
system, which provides Real-Time Gross
institutions, fintech players and consumers to
Settlement (RTGS) among the six GCC countries.
build a use-case for an innovative solution and a
corresponding regulatory framework. Saudi Looking ahead, joint efforts by governments
Arabia has leveraged this to develop its along with banks, payment service providers and
regulatory sandbox framework further to an fintech entities both globally and in the MENA
‘Always Open’ approach, allowing high flexibility region, are likely to drive the rate of adoption of a
on applications and speed of authorisations, cashless society among consumers.
So, what does this mean for The MENA region is moving
the payments landscape? rapidly to implement
digital payments with the
Governance is now, goal of decreasing cash
Collaborative Governance: use. This region has the
• Fintech entities, including payment service highest share of cash
providers, are invited to research,
collaborate and innovate to launch new payments in the world but
products or services by leveraging the
witnessed a sharp 16.3%
regulatory framework and sandbox
applicable in the country drop in cash payments in
• Merchants are encouraged to participate, 2021 and is expected to
experiment and learn about new or
upcoming technologies that allow newer
reach a cumulative
payment methods that resonate with reduction of 42% by 2025
convenience, provide best-in-class security,
access to consumer analytics and ensure as the region navigates
minimal transaction failures
towards QR, biometric and
contactless payments.
The journey from Physical to Phygital
to Digital Money is on fast-track:
• With cryptocurrencies still largely seen as an

investment tool, the launch of CBDCs could
be a gamechanger. With the digital world
providing a safe, secure and virtual currency,
this could catapult not just digital
transactions but also consumer know-how
and customisation through higher
transaction volume and enhanced consumer
analytics.
Payments everywhere,
right now
Geographical boundaries continue to blur in the ensures seamless travel, trade and remittance
digital world as governments mirror digital flow between the countries.
technologies and regulatory frameworks to
Moreover, with Canada, New Zealand, Peru and
allow seamless transactions. Moreover,
Indonesia launching real-time payments in 2022,
established online pure-play retailers allow
an estimated 72% of the world population will
online purchases across geographies through
have access to instant payments infrastructure,
seamless purchasing and payment systems.
thus providing an opportunity for inter-country
With cross-border payments expanding across linkages and easy cross-border transactions for
regions, governments are developing instant the future.
payments systems through bi-lateral and
In the future, we could witness the rise of a
multi-lateral agreements. These systems aim to
one-world payments systems, integrated
facilitate cost-efficient and effective
everywhere. Social media apps are already
cross-border digital payments thereby paving
paving the way and have provided this model in
the way for a more integrated international
the communications field. Applying a similar
payments landscape. India and Singapore, for
reach to a payment application across a unified
example, just completed linking their instant
and integrated system would lead to a truly
payment networks, using card or QR codes. This
instant and borderless payments landscape.
So, what does this mean for
the payments landscape?
Borderless payments
• Cross-border payments in the MENA region

have been led by B2B payments contributing
to almost 97% of all cross-border payments.
They typically involve transactions between
suppliers and merchants/buyers. While
governments collaborate to enable instant
payments across borders and fintechs
collaborate across borders to facilitate any
digital payment transaction leveraging
digital wallets, merchants are encouraged to
explore fintech and payment service provider
systems that enable multi-currency
purchases across regions to expand their
reach to other feasible geographies.
• Surveys conducted among end-consumers

across the globe show most consumers are
keen to explore cross-border purchases for
better prices and to gain access to a wider
product range. Merchants with a
multi-country presence can leverage online
pure-play retailers to provide a unified
purchase experience. A seamless interface
with lower transaction charges is likely to
drive consumer-to-business cross-border
payments in the future.
The evolving definition
of financial inclusion
The expansion of the digital landscape is appliances and devices across households,
inevitable and with generation gaps being financial inclusion is also likely to expand across
compressed, it will soon encompass most channels including connected devices like smart
individuals and organisations in the region. speakers and televisions.
Digital payments are at the heart of the digital
Mobile money serves as a cornerstone for
economy. They represent a future vision for the
financial inclusion. In Egypt for example, with an
circulation of value. In building future digital
estimated unbanked population of 44 million
payment architectures, inclusiveness is
people, the task of improving financial inclusion
considered a primary design principle, not only
has been a key focus area. With almost three
in terms of access, but also for engagement
quarters of Egyptians under the age of 40, its
and benefits.
youthful population provides significant leverage
There have been great strides in the MENA for penetration of digital payments by various
region towards the development of digital stakeholders. To drive this inclusion, the Central
payments. This should be integrated with the Bank of Egypt waived all fees applicable on
previous sentence. Relevant stakeholders need e-wallets and increased the transaction limit of
to capitalise on the dynamism in the digital e-wallets linked to mobile phones. This enabled a
payments industry to identify and capture value wave of adoption of mobile wallets that now
pools resulting from new innovations and facilitate peer-to-peer transfers and provide ease
existing start-ups. An intense level of of conversion of cash to digital money and
stakeholder coordination is also required to vice-versa.
ensure a cohesive and inclusive digital
landscape. With growing penetration of smart
Some of the payment themes
discussed in this report that bring
inclusivity to the payments
landscape include:
• Peer-to-Peer (P2P) payments which are

revolutionising the financial system and the
way individuals and organisations exchange
value from one to another leveraging digital
wallets.
• Buy Now, Pay Later (BNPL) schemes allow

consumers to purchase more goods without
paying the high interest rates generally
associated with buying on credit. They
provide an efficient means for consumers to
organise their spending into affordable
bite-sized payments. BNPL solutions have
been met with success across the world due
to the security given by interest-free loans in
times of economic uncertainty, especially for
high-volume and high-value purchases.
BNPL accounted for 6% of all online retail
transactions in 2021, and is forecast to see
value growth of 50.5% in 2022, according
to a Research and Markets’ BNPL survey.
Therefore, global and regional companies
that offer BNPL solutions gained popularity
and grew economically in 2021.
• Payment data analytics are being used to

secure financing from banking and
non-financial banking institutions. This is a
tremendous opportunity for businesses in
remote and previously inaccessible areas to
engage in the formal economy and identify
business opportunities by leveraging
consumer behaviour data.
So, what does this mean
for the payments landscape?
Collaboration instead of competition will be a winning formula
• Consumers and merchants alike are looking Merchants can explore access to a newer target
for one seamless experience across all consumer base by leveraging systems that offer
payment corridors that they transact in. newer payments methods and customised
Globally, eight in ten fintech start-ups solutions targeted at social classes with lower
now collaborate with a payment network. spending power. Are there additional payment
Besides working closely with the themes or methods that can be onboarded to
government, fintech entities, including cater to a wider population base? Is there any
payment service providers, are looking to target market segment for your offering
leverage each other’s competencies to among the non-affluent social classes?
provide a convenient, secure and seamless Answering ‘yes’ to any of these questions
payment experience. presents a strong opportunity for merchants to
explore beyond the obvious in digital payments.
These key pillars and active development of the entire

digital landscape present a strong opportunity for
digital payments that will be explored in more detail in
forthcoming re-Imagine payments papers.
APPENDIX
DEFINITIONS
Industries
Online sales of new and used goods to the consumer from a business for personal or household
Online Retail consumption. This includes purchases made via online pure-play retailers assuming it is a
business-to-consumer purchase.
Consumer Foodservice Online purchases of meals and refreshments prepared outside the home, specifically those where
(Online) payments are made online. Excludes cash-on-delivery or cash-on-collection.
Airlines (Direct) Online sales of airline tickets sold separately by intermediaries and direct suppliers to
(Online) leisure travellers.
Online purchases of transportation and mobility-related products, including shared mobility

Transport (ride-hailing, ridesharing, car-sharing, scooter sharing and bike sharing), rail, ferries, coach buses,
(Online) car rental, urban and suburban mass transportation authorities, taxis, and other commuting
expenditures. This category excludes airlines.
Online sales of lodging services as single components, including hotels and all other lodging
Lodging
types by intermediaries and direct suppliers to leisure travellers, including sales made by
(Online)
short-term rental intermediaries.
Online sales through companies that put travel packages and components together (tour
Travel Intermediaries operators), companies that sell travel services directly to consumers and businesses (travel
(Online) agents, including traditional brick & mortar travel agencies, online travel agencies and travel
management companies) and short-term rental intermediaries.
Online purchases of tickets to sporting events, cinemas and live performances like concerts,
Ticketing theatre, dance, comedy, or readings. This category includes the first-time purchase of event
(Online) tickets as well as tickets sold in secondary online retail spaces, such as ticket brokers
orticketing websites.
Bill Payments Online payments made from their credit card or bank account to a vendor for services like phone,
(Online) cable, gym, memberships, etc.
Online purchases of streaming media services, in which the video, audio or written content is sent
in a compressed form over the internet and played immediately rather than being saved to a hard
On-demand Online
drive. This includes video On-demand Online entertainment; music On-demand Online
entertainment
entertainment; online and cloud gaming; and digital subscriptions to newspapers or magazinest.
Online payments of electricity, water and sewage bills made by households. This includes
Utilities (Online)
payments made to the government by businesses and consumers.
Online payments of all government services including visa expenses incurred by expats, vehicle
Government renewal, registration and maintenance costs, accommodation transfers, payment of traffic fines,
(Online) municipality and work permit related expenditures.
Online payments of health and motor insurance only. Most other insurances such as life or travel
Insurance (Online) are either insignificant or paid in person.
Education (Online) Online payments of all relevant tuition fees, online courses and certifications.
Healthcare (Online) Online payments for online consultations and e-health apps.
DEFINITIONS
Payment Themes
Omnichannel Payments made via a system that integrates payments and purchases made across both online
payments and offline touchpoints.
Person-to-Person (P2P) The transfer of funds from one individual to another either through digital wallets or a
payments separate application.
Includes direct purchases and payments made through social media or pay-by-link
In-app payments
methods within applications.
Short-term financing allowing consumers to convert transactions into limited instalments

Buy Now, Pay Later
with no interest and no minimum purchase requirement.
(BNPL)
Mid- to long-term financing allowing consumers to convert transactions into a minimum

Instalments
amount to monthly instalments at a fixed cost or interest rate.
Provides easily accessible loans to help businesses manage operational costs. Includes P2P
Merchant lending
lending.
A one-stop solution for consumers to access all major daily needs and services (including
Super apps
financial and payment services).
Cross-border/multi- Payments where the seller and buyer are present in two different geographies and trade in
currency payments different currencies.
All payments and transactions done immediately, 24 hours a day and 365 days a year. This may
Instant payments
include transactions done through digital wallets or bank transfers.
Other terms
Digital tokens that are regulated and issued by a central bank, unlike cryptocurrency which
Central Bank Digital
cannot be regulated by a single authority. They are pegged to the value of a government-based
Currencies (CBDC)
currency that is not backed by a physical commodity like gold.
Digital Wallet A mobile application that facilitates a monetary transaction.
A digital medium of exchange and storage of value using mobile money accounts,
Mobile Money
facilitated by a network of mobile money agents that facilitate the transaction.
The process of replacing a sensitive piece of data or information with a non-sensitive

Tokenisation
value, called a token, which is typically used to complete a transaction.
Calculated by dividing the number of internet subscribers by the total population and
Internet Penetration multiplying by 100.
METHODOLOGY
This report is built based on a holistic
methodology approach involving both
primary and secondary research.
Over 500 interviews conducted with merchants across various

industries and company sizes along with fintech and payments
experts across the three key countries researched (UAE, Saudi
Arabia and Egypt) between January and October 2022.
a. Over 300 interviews with merchants, conducted face-to-face

or via telephone, provided qualitative inputs to determine
the key trends driving digital payments alongside
acceptance and adoption of payment themes across industries.
Extensive secondary research including:
a. Referencing published statistics across the three countries

‒ General Authority of Statistics (Saudi Arabia),
Department of Statistics (UAE), Central Agency for Public
Mobilisation and Statistics (CAPMAS, Egypt) and Eurostat.
b. In-house syndicated research insights through over 25

reports from Passport by Euromonitor International
c. Analysis of insights gathered through associations,

journals, press releases and relevant industry publications.
Triangulation of extensive data points gathered from secondary

and primary research.
HOW TO
READ THIS REPORT
This report was written keeping the entire payments landscape in

mind. The objective was to provide a holistic perspective of
ongoing and forward-looking trends in digital payments. It is a
very intricate and complete report, but is also very easy to
navigate. Below is a sitemap to the report:
• Section 1 introduces digital payments from global, regional

and country-focused perspectives
• Section 2 defines the generation gap that impacts digital

consumers and their influence on the evolving payments
landscape
• Section 3 highlights how fintech entities and SMEs benefit

from the generation gap and, hence, act as key drivers for
digital payments
• Section 4 discusses the key payment themes that are driving,

and likely to drive, digital payments in the near future
• Section 5 provides a deep-dive into understanding digital

payments across industries
• Section 6 draws a summary of the key takeaways and an

outlook on the road ahead for digital payments.
Each section can be consumed independently as part of a cohesive

narrative to make it an accessible read for consumers, fintech
entities and merchants alike.
CREDITS
Kalika Ram S Kumar Himanshu

Tripathi Team Lead – Consulting Vashishtha
Head of Marketing Partner
Aditya Alur Ahmed Elkhodiry Aditya

Head of Key Client Consultant Gokhale
B2B Marketing Partner
Tarek Baalbaki Purva Sethi

Senior Business Director - Brand
Development Consultant & Innovation Research
https://paymentservices.amazon.com
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re:Imagine payments

What's Next for

Research & Insights by

07 Section 1: The Rapidly Changing

20 Section 2: Digital Payments and the

22 Section 3: Young Consumers, Younger

25 Section 4: Themes Driving Digital Payments

49 Section 5: Where do Industries Stand

Multiple government initiatives across

“What’s next for digital payments in the Middle

In its endeavour to drive forward-looking • The macro-and socio-economic trends driving

THE RAPIDLY CHANGING

¹McKinsey Global Payments report, 2022

Consumer centricity An estimated two-thirds

Building on global momentum, the MENA is now online. Accordingly, organistations

” In an interview with The National, Managing Director of

The COVID-19 Digital Savvy Fintech

UP TO THE AGE OF 14 UP TO THE AGE OF 34

Global average is 25% Global average is 55%

MENA Region average is 31% MENA Region average is 63%

The Push for a

UAE COUNTRY CARD, 2022

3.8% 56% 18.3%

Please refer to page 87 for deﬁnitions of industries.

SAUDI ARABIA COUNTRY CARD, 2022

7.9% 58% 13.6%

Bill Payments (Online)

Digital Payments industry size - Saudi Arabia, 2021 (USD Bn.)

Please refer to page 87 for deﬁnitions of industries.

EGYPT COUNTRY CARD, 2022

5.0% 66% 19.6%

Digital Payments industry size - Egypt, 2021 (USD Bn.)

Please refer to page 87 for deﬁnitions of industries.

Generation Alpha (aged 0-9) is the largest

Generation Ages Egypt Saudi UAE

Gen Alpha 0–9 29.9% 22.6% 11.8%

Gen Z 10 – 25 23.9% 22.1% 15.8%

Millennials 26 – 41 21.5% 26.3% 47.3%

Gen X 42 – 57 14.9% 22.2% 20.8%

Euromonitor International Economics & Consumers Database 2021

“In Egypt, Saudi

According to the International Monetary Fund

Beneﬁts of digital payments for key stakeholders

World Bank, Euromonitor Analysis

In this section, we will discuss some of the changes being

Lending for smart consumers

Seamless shopping experiences

Fostering ﬁnancial inclusion

High Maturity Product / service loses momentum and begins to decline.

� Driven by strong adoption across several

Current and forecast adoption of Instalments¹

Introduction² Growth³ Maturity⁴ Decline⁵

CURRENT FORECAST SAUDI ARABIA UAE EGYPT

¹ Refer to page 27 for a detailed explanation of the maturity phases

While BNPL typically begins with one instalment

Current and forecast adoption of BNPL¹

Introduction² Growth³ Maturity⁴ Decline⁵

CURRENT FORECAST SAUDI ARABIA UAE EGYPT

¹ Refer to page 27 for a detailed explanation of the maturity phases