Digital Payment Innovation Leading in Escalating Hostile Actions in the Middle East Region

Coin World News Report:
Traditionally, Middle Eastern countries have been seen as cash economies, with the majority of residents using local currencies to complete transactions and conduct trade. While cash is still considered the primary payment method in some countries, other developed economic centers are shifting gears. This comes at a time of escalating tensions in the region with the Hezbollah pagers and walkie-talkies explosions.
With the accelerated development of digital payments and financial technology, Middle Eastern countries with adequate resources and digital infrastructure are heavily betting on the future of the emerging payment market in the region, seeing a widespread adoption by younger, tech-savvy consumers.
Consumers have largely embraced the shift from cash to digital payments. A report by Mastercard found that approximately 85% of people in the Middle East and North Africa (MENA) have used at least one emerging digital payment method in the past 12 months. More and more people are using clickable smartphone mobile wallets, buy-now-pay-later (BNPL) services, and payment-enabled wearable devices.
The diversity of the landscape has brought a range of new entrants into the market, revealing not only the rise of digital payments but more importantly, how the Middle East has become a disruptor in the market and a driving force in the fintech industry.
Global Opportunities in the Middle East
Convenience and efficiency are important factors for many consumers when it comes to making payments or completing transactions. However, in the Middle East, Mastercard’s research found that cybersecurity is one of the primary factors consumers consider when choosing a more convenient payment method.
While digital security is important, it goes beyond what meets the eye. Consumers in the region take into consideration other factors such as ease of use, availability of rewards and promotions, and the social and environmental benefits they may receive.
Given that these are all factors that local consumers deem important, digital payment companies and regulatory bodies are developing key areas to help advance the personal payment space in each country. This will provide consumers with faster and more efficient payment solutions while changing their perspective on digital payments.
Using open currencies for cross-border payments, such as the US dollar, and sending value directly between digital wallets using blockchain technology can reduce costs and friction. This is the power of open currencies for businesses.
#OpenMoneyEra
https://t.co/YUo77pRJs2
– Circle (@Circle)
August 7, 2024
Buy now, pay later
Buy now, pay later
has already gained a foothold in the global and Middle Eastern payment landscape. Deloitte’s forecast estimates that the global goods market value (GMV) of BNPL will increase from $433 billion in 2022 to over $960 billion in 2028.
BNPL payments are available globally. In the United States, approximately 9 million consumers use BNPL, despite representing a small percentage of the total population. The number of users has grown by 40% in the past few years.
Indonesia has the highest number of BNPL users in Asia, with nearly 19 million users as of 2022. Other countries with the highest number of BNPL users include the Philippines, Vietnam, and Japan.
Estimates from the Middle East, North Africa, and Pakistan indicate that over 50% of the population in the region uses BNPL payments in 2022, making it the largest and potentially most active region in terms of cash-on-delivery transactions.
Buy now, pay later
#BNPL
accounted for 5% of global e-commerce transaction volume last year, with a projected compound annual growth rate of 16%
#fintech
#technology
#finserv
#AI
@psb-dc
@BetaMoroney
@efipm
@BrettKing
@shilotech09
pic.twitter.com/rdXTFVzeCK
– Richard Turrin (@richardturrin)
November 28, 2023
In some parts of the Middle East, credit cards are not tied to a person’s credit score, as is the case in other Western countries, but rather to their income. BNPL opens up a new financial avenue for individuals with incomes below a certain threshold or who may not have access to credit and financial services.
Stored Value Facilities
Another positive sign of progress in the digital payment landscape in the Middle East is the significant growth of Stored Value Facilities (SVF) in recent years.
SVF is a collective term for digital wallets and prepaid card ecosystems that have become gateways for a large population without bank accounts, making transactions more convenient, secure, and efficient without the need for physical bank accounts or a single service provider commitment.
Through SVF, customers can choose to make payments to others using currency values, reward points, cryptocurrency-based assets, or other types of virtual assets, perhaps on behalf of others. These activities allow customers to access different providers accepting SVF more directly, either in full or in part.
The deployment of SVF enables a wider range of consumers, especially those without bank accounts, to access more forward-looking financial services, maintaining a sense of financial security and stability.
The SVF space has seen significant transformations in the Middle East, with countries like Bahrain emerging as leaders in SVF regulation. The Central Bank of Bahrain (CBB) issued Volume 5 of the CBB Rulebook, outlining rules, regulations, and supervisory principles for digital wallets and prepaid cards.
Visa and Mastercard prepaid cards are a convenient way to cash out and use your cryptocurrency.
Virtual cards are available globally, require no KYC, can easily be added to Google, Apple, or Samsung Pay, and can also be used for online shopping.