Fragmented payment infrastructure and underdeveloped regulations have traditionally hampered efforts to build cohesive online marketplaces worldwide. Nevertheless, citizens and residents in the Middle East, North Africa, and Pakistan (MENAP) region increasingly see themselves as part of a global digital economy. The borderless nature of e-commerce is indeed forging a new level of international integration.
This has a profound impact on the socio-economic outlook for the region as consumers demand more digital services and governments seek to transform their economies. According to a recent study by Checkout.com, approximately one in four consumers in countries like the UAE and Saudi Arabia believe that the most important key to achieving their country’s national economic transformation goals will be greater "internationalization" - economically, politically, and in business regulation.
Moreover, people increasingly see commerce as vital to such internationalization. Our
research reveals that the Gulf region alone had a 214 percent year-on-year increase in cross-border online sales by mid-2020. About a third of consumers in MENAP overall cite cross-border shopping as the number one reason for shopping online. According to World Bank data, remittances across MENA had risen to a staggering USD 56 billion by the end of 2020. With several global events taking place in the region, such as Expo 2020 and the Qatar World Cup 2022, there will be even greater catalysts for deeper internationalization and lasting economic ties set on the world stage.
This transformation is being underscored by a budding fintech and digital commerce ecosystem. An array of innovative fintechs are now leading an evolution in the region’s economy, especially when it comes to digital payments. Digital payments such as e-wallets, apps, and buy now and pay later (BNPL) services are increasingly prevalent.
Let’s look at the BNPL market as a specific example of the region's fintech maturity. Saudi payments firm Tamara was the first BNPL company to be enrolled in the Saudi Central Bank’s regulatory sandbox program to boost fintechs and startups. The startup has quickly established itself as a market leader and signed up over 1,000 merchants across the region. Earlier this year, it secured a record-breaking funding round of USD110 million, led by Checkout.com.
In this regard, the private sector is vital in helping to strengthen the underlying payments infrastructure required for digital businesses to thrive. This is what we do at Checkout.com. Launched in 2012, we're a truly global payment solutions provider with a team of over 1,500 people across 19 offices worldwide - including Dubai, Riyadh and Karachi.
Checkout.com has supported businesses across the region from day one. We recognized their immense potential and made it our mission to give them access to the best-in-class digital payments they required to unlock it.
We've processed more than 400 million e-commerce transactions in the region since 2019, offering all major international credit and debit cards, digital wallets like Apple Pay and Google Pay and popular local payment methods, including Fawry, mada, Knet, QPay and more. That's why we're trusted by companies like OSN, Alshaya, Careem and tajawal to power their payments and help them unlock more growth.
As fintech funding flows throughout the region, governments see the digitization of economies and boosting digital payment ecosystems as key to their economic transformation goals. Many are keen to replace regulatory barriers that may have hampered progress in the past. Regulators such as the UAE Central Bank and the Saudi Arabia Monetary Authority (SAMA) now see themselves as enablers of innovation. Such entities have already taken steps to advance the regional financial landscape by transforming regulations to be fintech friendly, creating regulatory sandboxes and launching accelerators.
These developments suggest that the rate of digitization will rise quickly. That will provide real value to consumers and businesses alike. Deepening access to financial services - such as delivering mobile banking services to the unbanked - has been shown to significantly raise individual incomes and national economic output. It is perhaps no surprise then that 36 percent of those in the UAE, 45 percent of those in KSA, and 48 percent of consumers in Jordan believe that further digitizing their economy and more digital skills education is fundamental to achieving their nation’s economic transformation plans.
While challenges certainly exist in unlocking the full potential of digital commerce in the region, the opportunity has never been greater to forge a new level of regional and global integration - one that has been missing for far too long.
Download Checkout.com's new report to get exclusive insights into how businesses can meet the expectations of consumers across MENAP.