Online payments surge in wake of e-governance

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Adopting online payment methods has become a necessity rather than an option, especially with the emergence of e-governance and e-commerce, say experts.

“Trust in e-payments has increased over the past couple of years,” COO of Hyperpay Ashraf Manasra told The Jordan Times.

Manasra added that as online shoppers and e-commerce users in Jordan increase, they choose digital modes of payment instead of cash to complete daily purchases.

“Consumers feel safer buying and transacting online when they are aware of the multi-layered security measures that are in place to protect card data,” added Manasra.

Country General Manager of Zoodpay Mohammed Al Yousef told The Jordan Times that there is “definitely a potential for e-commerce in the Jordanian market”.

“Jordanian customs and clearance fees have a negative impact on cross-border e-commerce, resulting in approximately 60 per cent decline in GMV (Gross Merchandise Value),” Yousef noted.

Yousef added that the average value for cross-border orders ranges from $20 to $40, with customers required to pay JD5 as a minimum customs fee in addition to local delivery and clearance fees. These amount to an additional JD5, bringing the total fees to roughly 30-35 per cent of the product value.

“The local e-commerce market is facing a delay in digital adoption and transformation by local merchants, as well as a lack of digital and localised content. There is also a delay in digital payment acceptance and adoption,” said Yousef.

“Cash on delivery is the preferred payment method,” he added.

He noted that “credit card penetration is low, at approximately 7 to 8 per cent, and 35 per cent have limited access to financial institutions and consumer lending facilities”.

“The absence of a fulfilment centre and the consolidation of orders result in a challenging and costly delivery process,” Yousef added.

He pointed out that the limited availability and usage of postal codes render "last-mile deliveries harder to execute. Additionally, the limited number of orders per customer from the same supplier also leads to higher last-mile delivery costs”.

According to Yousef, Jordan has one of the highest social media penetration rates in the Arab region.

“Over 60 per cent of Jordan’s Internet users are active on social media such as Facebook, Instagram and TikTok. These have significant influence on purchasing decisions,” he added.

“Although cash on delivery remains the most popular payment method for online purchases in Jordan, it has been changing post-COVID as a result of the growing e-commerce market and government digitisation initiatives, leading to increased use of online payment systems,” said Yousef.

“As the Jordanian government is transitioning paper-based information services such as passports/National ID, vehicle licensing, and utilities billing/payments to an online platform, they are integrated with a standardised online payment platform, which was announced as part of the e-governance initiatives,” added Yousef.

These platforms are often used as the foundation for online purchasing systems, ensuring a risk-free experience for customers and are expected to boost business.

“E-payments have become necessity more than willingness,” noted Manasra.

He added that the transformation was accelerated in a way that had not been seen before.

“What was accomplished in two years would not have been achieved in 10 years in normal circumstances,” he noted.

Manasra highlighted that an essential feature of digital payments is “the ability to track your spending and do the proper personal financial management needed”.