According to RationalStat’s analysis, the Middle East & Africa online payment gateway is estimated at US$ 3 billion in 2020 and is expected to reach US$ 21 billion by 2028, growing at a CAGR of 28% from 2020 to 2028.
An online payment gateway is a facility that authorizes credit or debit cards to process the transaction and complete the payment stage to the merchant through the merchant’s website/mobile app. The outbreak of Covid-19 has shown the region that online payment gateways and e-commerce are the backbones. Saudi Arabia, Egypt, and UAE are the leading e-commerce markets in the region and thus, offer lucrative opportunities for the online payment gateway providers. The regional e-commerce market is estimated at US$ 22 billion in 2020 and reached US$ 31 billion in 2021. The e-commerce market in the Middle East and North Africa is anticipated to touch US$ 48 billion by the end of 2023. Saudi Arabia is leading the way in terms of regional e-commerce growth with a healthy CAGR of 40%, followed by the UAE at 38% CAGR.
Mirroring the trend of the global market, the online payment gateway market in the Middle East & Africa is expected to witness a hefty growth rate during the coming period. The gap between digital payments and conventional payments presents a tremendous opportunity for the growth of the online payment gateway market. The adoption of digital payments by small and medium-sized enterprises in the region is expected to support the demand for online payment gateways over the coming years.
Crucial factors accountable for market growth are:
- Surge in digital adoption
- Boom of the e-commerce sector
- Increased preference for online purchases
- High penetration of internet users
- Government support toward new ventures and favorable policies
- Growing population and affluent middle class
- Huge reliance on digital banking services and online payments
- Rise of digital consumer
- Banking
- Shopping
- Work/Study
Challenges impacting the growth of online payment gateway across the region;
- Cybercrime and fraudulent activities
- Limited exposure to online shopping
- Customer credibility and shipping problems
- Low awareness of digital payments
- E-commerce occupies a meager share in the region’s overall retail sales
Regional Snapshots
Saudi Arabia has set an ambitious target to achieve more than 70% non-cash or digital transactions by the end of 2030; opening promising avenues for the players engaged in the Middle East & Africa online payment gateway market. Digital payments in the two leading economies accounted marginally for 23% and 18% of the total transactions in the UAE and Saudi Arabia, respectively. In Egypt, nearly 65% of the population remains unbanked, and the government and central bank intend to move towards financial inclusion and upgrade payment systems. Some of the leading online payment gateways in the region include,
- UAE: Telr, CashU, 2Checkout, CCAvenue, Cybersource, Amazon Payment Services, Paytabs, Hyperpay, etc.
- Egypt: Amazon Payment Services (APS), PayMob, Fawry, OPay, 2CHECKOUT, Vapulus,
- Saudi Arabia: CASHU, Moyasar, Payfort, Paytabs, Hyperpay, STC Pay, Bayan Portfolio, Apple Pay, Mada Pay, etc.
- Bahrain: PayGCC, Sadad, Paytabs, Sinnad, Arab Financial Services, BENEFIT, etc.
- Oman: DaoPay, Gpay, Boku, Mobiamo, Razer Gold, Bitpay, Skrill, Paypal, etc.
- Qatar: Paytabs, 2Checkout, Tap, Paypal, MyFatoorah, Payfort, Sadad, Noqoodypay, etc.
- Western Sahara: 2Checkout, APS - Amazon Payment Services, BitPay, Coinbase Commerce, Credit / Debit Card – Mint, dLocal, FasterPay
Leading companies across the globe are seeking a significant foothold in the domestic Middle East market with local online payment gateway solutions. To grow their client base and increase their market foothold, the companies are adopting various strategies. Some of the notable events that happened in the Middle East & Africa online payment gateway market in the last few years include
- In March 2022, FintechCashier Group announced an investment of US$ 11 million into the MENA region, creating a financial gateway center based in Bahrain
- In January 2022, Noon e-commerce launched Noon Payments’, an integrated online payment gateway in Egypt to help small and medium businesses.
- In November 2021, India-based payments and banking solutions provider, Cashfree Payments invested nearly US$ 15 million in Saudi Arabia and UAE-based payment service provider, Telr.
- In December 2021, Saudi Arabia’s local payment gateway HyperPay obtained a permit from Saudi Payments to activate new “mada” services for its merchants.
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