The Middle East has traditionally been associated with a reliance on an economic reliance on the region’s rich oil reserves. However, following the Covid pandemic, and various governmental initiatives, many countries focused on diversifying their economies and bolstering growth and innovation across various sectors.
However, according to Fuse, a company committed to building a common layer of infrastructure across payments across the Middle East and North Africa (MENA), the region remains one of the last to be conquered by payment innovation.
Fuse’s How Money Moves in MENA report, which aims to provide a comprehensive overview of the evolving payments landscape across the region, highlights that cash remains the most popular payment method for many of the countries in the Middle East. Recognising the chance to innovate, many of these countries have already taken steps to make changes.
Fuse outlines a few of them:
- In Egypt, just shy of nine in 10 consumers have used at least one emerging payment method in the last 12 months.
- In Morocco, as much as 75 per cent of people had used at least one emerging payment method in 2022.
- In Bahrain, the volume of e-wallet transactions almost tripled between 2020 and 2021.
- In 2017, MPClear launched in Oman, enabling customers to transfer funds using their mobile numbers.
Big opportunities remain
Remittances also remain a key part of the majority of economies in the region. In fact, the Middle East ranks top for outbound remittances, as well as in inbound remittances between Middle Eastern countries.
The six GCC countries alone host around 35 million migrant workers, which represents around 10 per cent of all global migrants. This has had a huge impact on the growth in outgoing remittances – which rose from $25billion in the early 2000s, to $134billion in 2021.
To facilitate the huge volume of remittances, countries have established a number of payment schemes. For example, the Arabian Gulf System for Financial Automated Quick (AFAQ) Payment Transfer enables the transfer of funds between MENA nations without connecting with the SWIFT network, avoiding high transaction fees and payment delays.
“When building Fuse, we found information surrounding payments and finance in the region sparse and difficult to interpret,” explained George Davis, co-founder and CEO at Fuse. “The MENA market is, in our opinion, the most exciting the world and is currently seeing a transformation akin to that of LATAM or APAC – yet the information available makes it inaccessible to businesses with a global focus.”
Meanwhile, the payments space remains dominated by traditional banks, such as Emirates NBD, Mashreq, and First Abu Dhabi Bank.
Because of the makeup of the Middle East, Fuse says that this presents an opportunity for fintechs to pursue a share of the market, offering enhanced services to consumers and taking a slice of the payments and currency exchange profits that these traditional banks are currently monopolising.
