Despite ease in the measures set to combat the COVID-19 pandemic, electronic payments in the Gulf countries surged more than cash payments in several other Arab countries.
Gulf governments have consistently been working to increase the presence of electronic payment in many sectors as part of more extensive national plans to establish governance and optimize automation.
Saudi Arabia has experienced a historic surge
According to what the Saudi Central Bank (SAMA) revealed on August 14, 2022, electronic payments surpassed cash transactions for the first time in the kingdom’s history, achieving 62 percent of total payments, compared to 57 percent in 2020 and 44 percent in 2019.
SAMA revealed that cash is no longer the most used payment method by individuals for the first time in the kingdom’s history.
The rise in non-cash payments was a part of Riyadh’s efforts to minimize reliance on cash by 70 percent by 2025, which all individuals and sectors recognized.
In the Saudi business sector, the share of electronic payments reached 84 percent in 2021, up from 51 percent in 2019. The government sector has likewise nearly entirely converted to electronic payment.
In terms of trade, Saudi Arabia has become one of the world’s top e-commerce markets, with the average user spending $248 on the Internet, expected to rise to $252 by 2025.
The total digital commerce income in the kingdom is $7 billion across all product categories, estimated to reach $8.6 billion by 2025.
In UAE, half of all purchases are made electronically
In June 2022, Checkout, a payment solutions company, performed a new survey that revealed that more than half of the UAE population is utilizing digital wallets for the first time.
Furthermore, approximately 40 percent of respondents stated that their trust in digital wallets is equal to their confidence in banks.
According to the survey, over 83 percent of residents want to maintain or improve their e-commerce spending rates in 2022. 58 percent prefer to pay bills with digital wallets, while 55 percent prefer to pay for groceries with digital wallets.
In July, Euromonitor, a market research firm, reported that e-commerce in the UAE increased to $5 billion in 2021 and is predicted to reach $8 billion by 2025.
According to the firm, E-store license growth rates grew, with the most increasing by 33 percent during the first quarter of 2022.
Pay by phone in Qatar
Qatar Central Bank launched the Qatar Mobile Payment System (QMP) in July 2022, allowing quick mobile phone transfers without requiring bank cards or creating a bank account.
E-commerce in Qatar increased by 47 percent to $2.2 billion in 2020, up from $1.5 billion in 2019.
A Qatari citizen’s average single purchase transaction reached $260. According to the Qatar Chamber, Qatar ranks eighth in the Middle East and North Africa region for B2C e-commerce transaction volume.
Kuwait sees $33bn online purchases
Official data in Kuwait showed that online purchases increased by 67.7 percent in 2021, with a value of $13.5 billion, to reach $33.6 billion, up from $20 billion in 2020.
Kuwait has three of the most powerful electronic financial enterprises in the region:
-“MyFatoorah” is a platform that offers electronic payment services to company owners and e-commerce platforms. In 2021, the company conducted $2.9 billion in transactions, its app was downloaded over 255,000 times, and it has over 60.5 thousand active users.
-“Ottu”, the second startup, enables business owners to incorporate electronic payment gateways into e-commerce websites and mobile applications without having to construct a payments infrastructure. In 2021, the company contributed over 2.6 million transactions worth $970 million.
-“UPayments” is a company that offers online payment and billing services, as well as the building of electronic stores and the payment and collection of real estate rents. It provides its services via its own website and application.
In 2021, the company executed more than $689 million in transactions, and its app was downloaded over 150,000 times. It presently operates in Kuwait, Qatar, and Saudi Arabia and has partnerships with the National Bank of Kuwait and “Zain” Telecom.
Digital transformation in Oman
The Central Bank of Oman stated in August 2022 that there is a rising tendency toward using electronic payment systems as part of digital transformation initiatives to achieve the goal of a comprehensive digital society.
According to the Bank, the number of government and private agencies in the country that benefit from electronic payment services has increased to around 13,000 using the electronic payment gateway, in addition to more than 14,000 institutions benefiting from point-of-sale device services.
Starting January of next year, all institutions and businesses will be required to provide electronic payment services and update their status by the end of the year.
Electronic payments on the rise in Bahrain
The Central Bank of Bahrain said in November 2021 that electronic payments operations increased to $5.8 billion in the first nine months of the year, up from $4.4 billion in the same period in 2019.
According to the local newspaper “Al-Watan,” the Assistant Undersecretary for Control and Resources at the Ministry of Industry, Commerce, and Tourism, Abdul Aziz Al-Ashraf, said that e-commerce for small and medium-sized firms expanded by 20 percent in 2021, with a 27 percent increase projected this year.