The latest report by Germany-based desk research specialist yStats.com, entitled “Middle East & Africa Online Payment Methods 2020 and COVID-19’s Impact,” reveals how the region is adopting digital payments. The publication sheds light on the top payment methods used by online shoppers in 10+ countries in the Middle East and Africa, and summarizes the latest trends affected by the pandemic outbreak.
COVID-19 disrupts the dominance of cash payments in the Middle East & Africa
The top payment method used by consumers in the Middle East and Africa, both in-store and online, in 2019 was cash. Cash on delivery accounted for between one-half and two-thirds of E-Commerce transactions in countries such as Egypt, Morocco and Saudi Arabia, according to the data cited in the yStats.com report. However, due to the coronavirus outbreak in Q1 2020, central banks, E-Commerce merchants and payment companies across the region are encouraging consumers to use less cash and opt for e-payment means such as cards, digital wallets and mobile money instead. As a result of these efforts, nearly two in three consumers surveyed in the UAE, Saudi Arabia and South Africa in April 2020 reported transacting less with cash.
Contactless payments and mobile money on the rise
Among the top payment methods encountering strong growth during the pandemic are contactless cards and mobile wallets. However, due to the low financial account penetration in Africa, consumers on this continent are opting for alternative means to substitute cash, such as mobile money, the yStats.com report reveals. In 2019, Africa accounted for two-thirds of the world’s mobile money payment value. As of early 2020, the growth trend continued, as demonstrated by Kenya, where the number of mobile money accounts is now larger than the country’s total population.
African and Middle Eastern Fintechs attract investment
FinTech startups in Africa raised hundreds of millions U.S. dollars during 2019 to help transform the payments landscape in the region and drive financial inclusion. The best funded startups include Kenya’s Tala and Nigeria’s Interswitch and Opay. Furthermore, one of the leading payment providers in the Middle East, Network International, held an IPO on London Stock Exchange in 2019 and its revenues rose at a double-digit rate.