- Pandemic accelerates electronic payments take-up across Middle East region
- Kingdom’s national electronic wallet reveals 785% increase in remittances in 2020
A group of MPs in Bahrain, widely regarded as the banking capital of the GCC region, have pressed the government to transition to a fully cashless society within a decade, marking an acceleration of the demise of paper currency in the Middle East.
Most GCC states, including Bahrain, were already moving towards a cashless society before COVID-19, but politicians in Bahrain, led by services committee chairman, Ahmed Al Ansari, are leading the case for a renewed drive to accelerate the adoption of electronic payments.
Bahrain’s advanced digital infrastructure and decision to move all government services to the cloud has enabled a quick shift away from cash during Covid. The Kingdom’s national electronic wallet, BenefitPay announced a 785% increase in the number of remittances through its Fawri+ service in the year 2020 – exceeding $5m.
“Increasingly, people are using online payment apps for monetary transactions,” Mr Al Ansari said. “Payment for most government services has also shifted online,” he said, referring to Bahrain’s decision to process payments for governments services through digital channels only.
“A lot of people nowadays don’t even go to ATMs, they either use debit/credit card directly when shopping or pay through an e-wallet,” he said, adding that printing physical money is expensive and “electronic security or encryption is much cheaper.”
Mr Al Ansari said that with even small corner shops now accepting payments through e-wallets, the case for cash was no longer clear. Aside from quicker, easier, and more hygienic transactions, cashless payments improve security by creating digital paper trails to help reduce fraud and money laundering.
The Middle East and neighbouring subcontinent are moving rapidly away from paper currency. India is the world’s most supportive country when it comes to a cashless society. In contrast, France, Germany, the US, and UK are least supportive, according to a report by moneytransfers.com earlier this year, which surveyed the main global economies.
People in the Middle East are increasingly trusting of online payments, with 81% of consumers across the region saying they now trust the security of online transactions. In the GCC, some 61% of young shoppers now pay for online purchases with cards, compared to just 45% in 2018, according to publication relations firm BCW.
Research from the European Payments Council indicates that the MENA region will process around 139 billion individual non-cash transactions in 2022, which is 90 billion more than five years ago. The only markets to surpass that growth are emerging ones in Asia.
For more information, contact jpeskett@apcoworldwide.com
© Press Release 2021
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