Digital payments: Top transformative trends in the MENA region

With ambitious government strategies and visions prioritising digitalisation across sectors, businesses across the MENA region are navigating a fast-paced environment where adaptability is key to success. In such a scenario, digital payments are becoming increasingly relevant with online retail sales rising and technology revolutionising payment processes.

Spearheading the conversation on digital payment trends, Amazon Payment Services, in collaboration with Davies Hickman Partners, unveiled their latest report titled Leading Trends in Digital Payments: Driving the Real-Time Economy in MENA.

Based on quantitative data and insights from over 100 executives responsible for payments in businesses across Saudi Arabia, the UAE and Egypt, the report outlines key payment trends, indicating their relevance to businesses in the region.

Peter George, managing director of Amazon Payment Services MENA, shared, “Our latest report helps businesses increase their knowledge and ultimately better navigate this fast-evolving landscape.

“It not only provides observations but also offers actionable strategies that businesses can use to better prepare themselves as the landscape evolves, enhance customer experience, and boost their revenues. This latest report is anchored in our customer obsession philosophy, meeting merchant demand for fresh insights into the most important trends currently shaping the payments industry such as omni-pay advances, security technologies and artificial intelligence.”

Insights on customer loyalty

An important finding of the report is that fast checkout and payment completion are paramount for building customer loyalty.

Eighty-one per cent of businesses acknowledge that faster payment transactions could lead to increased revenues.

Given customers’ busy schedules, prolonged transactions risk abandonment, a concern echoed by 83 per cent of the executives.

With nearly a third of businesses anticipating substantial growth in 2024, digital payment enhancements are crucial for sustained success. Noteworthy trends identified by executives include bank accounts linked to national identity, the rise of digital wallets, enhanced payment experiences, fraud reduction, and improved biometric authentication.

These trends will shape business strategies and customer payment preferences in the coming years.

Key trends impacting digital payments

Innovation and advances in omni-pay: With consumers demanding more flexibility and convenience in payment methods, omni-pay emerges as a pivotal trend. Governments and regulators are proactively introducing regulations to enable rapid changes in digital payments.

Innovations such as stablecoins, open banking, and account-to-account payments are gaining momentum, offering businesses new avenues for transactional flexibility.

Fintech innovation and payment fragmentation are listed among the top 10 payment drivers of change for the next five years by the respondents.

Overall, 89 per cent of the executives said they engage with fintechs to improve payments for their business.

Enhanced experiences: Enhanced payment experiences are becoming increasingly vital in driving customer satisfaction and loyalty.

Faster, more streamlined transactions are prioritised, with digital wallets (which 87 per cent of the executives surveyed said were becoming the preferred way for customers to pay) and embedded payments in apps emerging as preferred methods.

Social commerce is also on the rise, as customers seek seamless integration of payment options with their online interactions.

Fifty-nine per cent of the executives said they would like to advance social commerce; 54 per cent said that their customers would likely use live streaming to buy products and services promoted by social media influencers.

Centred on security: In an era marked by growing cybersecurity threats, payment safety remains paramount. Innovations in biometrics and enhanced security features are instilling trust among consumers. In fact, for 68 per cent of the businesses surveyed, earning customer trust was the most important reason to deploy new payment methods.

Governments and regulators are also stepping up efforts to improve payment authentication, further boosting confidence in digital transactions.

Aligning with and adapting to artificial intelligence (AI): AI is revolutionising the efficiency of payment processing, offering opportunities for cost reduction and personalization. AI-driven insights enable businesses to predict preferred payment methods and tailor offerings to individual customer preferences, contributing to a hyper-convenient payment experience.

Amidst these trends, businesses are urged to focus on building trust, offering choice, driving change, and prioritising sustainability in their payment strategies. Trust, in particular, emerges as a cornerstone, with 68 per cent of executives agreeing that it is the primary driver for deploying payment technology.

“Our aim with driving these essential conversations forward is to empower businesses across MENA more broadly, to embrace digital payments seamlessly, enhancing efficiency, security, and customer experiences. We endeavour to play a meaningful role in advancing the regional digital economy, driving sustainable growth, and fostering a vibrant culture of innovation,” said George.