Checkout.com has released its annual MENAP Payments report. As consumer demand for digital commerce grows, ‘Digital Transformation in MENA and Pakistan: Why Payments are Key to Unlocking More Growth and Opportunity’ highlights the region’s eCommerce and Fintech sectors’ development over the last year well as the growth opportunity for merchants in this maturing market.
The eCommerce market in MENAP is growing at an exponential rate, according to the report. In 2020, 47% of customers predicted that they would buy online more regularly in the coming year. In 2021, about 83 percent of respondents indicate they’ll keep or even increase their present level of eCommerce spending through 2022, indicating a permanent shift in consumer behavior.
This trend has affected the convenience economy, with commonplace things like food delivery, groceries, and domestic goods becoming firm favourites. The analysis also indicates that customers are shopping online more frequently, with almost half (45%) of those polled stating they shop online at least once a month. Furthermore, 53% claim they are doing more buying online now than they were before the COVID-19 outbreak began. Online buying peaks at peak seasons like Ramadan. Earlier this year, 76 percent of consumers in the United Arab Emirates and Saudi Arabia indicated they planned to buy more items and services online.
The region’s digital payments infrastructure has grown in sophistication in tandem with the development in digital commerce. Payment methods including cash-on-delivery and bank transfers have experienced a year-over-year decline. Instead, 60 percent of consumers in the region prefer to pay for online purchases using a digital payment method, up 20% from Checkout.com’s 2020 research.
Newer payment mechanisms are emerging, such as digital wallets, in-app social shopping, and buy now, pay later (BNPL) choices. According to Checkout.com’s global data for 2021, the MENAP region is actually exceeding Europe and APAC in terms of in-app social shopping and BNPL adoption. Three-quarters of consumers in the region (76%) say they’ve used a fintech app in the last year, with 81 percent saying they’ve benefited directly from the sector’s growth.
“A flourishing digital payments and eCommerce ecosystem is leading consumers to feel more empowered, with start-ups thriving in the fintech arena, and commercial markets opening up,” notes Mo Ali Yusuf, Regional Manager for MENAP at Checkout.com.
Also said, “Checkout.com has operated in the region since 2014 and has played a privileged role to enable eCommerce to flourish, offering a unified payment experience across all major markets in MENA. This has given us a unique vantage point across the market, with our 2021 report highlighting how much growth has been condensed into 12 short months – a testament to progressive government policies and forward-thinking governments who are opening up the region, harnessing the growth potential of fintech, and responding to the changing habits and expectations of their populations.”
A steady increase in cross-border trade is another evidence of the region’s expanding eCommerce and digital payment businesses. According to the survey, merchants who accept both international and popular local payment methods help countries in the region contribute more efficiently to global value chains. In the past 12 months, over 85 percent of customers in the region made online purchases from brands and retailers outside of their own country, with a third (33 percent) identifying cross-border shopping as their top motivation for doing so. This year’s report further predicts that over 80 percent of large European enterprise merchants will be selling into the MENAP region by 2023.
Yusuf continues: “For the first time, our data shows us that MENAP has begun to outperform European markets in the adoption of emerging payment methods. This presents a phenomenal opportunity for global and domestic merchants to expand their businesses across MENA. We are proud to continue supporting this ecosystem to thrive in what we forecast to be another year of exponential growth across the region.”
As part of this year’s Checkout.com study, leading voices from the region’s business sector offer their perspectives on these challenges. Organizations such as Careem, OSN, Fawry, Tamara, the MENA Fintech Association, Visa, and others are highlighted in case studies and issue-based viewpoints, highlighting the value of creative collaborations in developing digital commerce.
