Checkout.com Reports Continuous Fintech Growth in MENA as 82% of Respondents Use Fintech Apps

Checkout.com has released the second phase of its Digital transformation in MENA 2022 report. Part one, launched last month, included insights from 15,000 consumers in the region. The next chapter interviews companies and their leaders at the forefront of the rapidly growing digital economy.

Remo Giovanni AbbondandoloVP for commercial, MENA at Checkout.com said: “If our almost 10 years in the region have taught us one thing, it is that it is impossible to underestimate the potential, drive and dynamism that exists in this diverse and rapidly changing region. It will become increasingly important on the global stage.” Fintech growth in MENA shows this as the digital way of managing finances is adopted by a number of different sectors.

Retail is riding the digital wave

Data from the report shows that 91 percent of consumers in MENA bought products online in the past year, with fashion and clothing making up 46 percent of all online purchases in the region. One in five consumers in MENA are buying retail products online more often than last year, with 33 percent shopping for fashion and clothing online more often.

This points to a rapidly evolving digital ecosystem that allows government agencies, established companies and start-ups to flourish, observed Paul Careyexecutive vice president for cards and payments, Al-Futtaim Group. “This is particularly evident in payments, where governments have set up regulatory sandbox infrastructure and made it easier for businesses in the region with more flexible visa options and commercial licensing,” he added.

Food and drink is overcoming historical resistance to digitalisation

While the pandemic forced consumers to stay away from their favorite eateries, it opened MENA’s appetite for home delivery services. Checkout.com’s data shows that by 2022, local consumers will order meals online more often than ever. Over half (53 percent) of MENA consumers bought food online in the past year, and 42 percent of MENA consumers said they are buying food online more often this year than in 2021.

The online food ordering sector has many moving parts that must come together in every transaction, from restaurants to drivers and aggregators to payment providers. Close cooperation is therefore important for the many stakeholders, noted Ramzi Alqrainychief technology officer at The Chefza Saudi based food delivery app.

“Collaboration allows us to innovate effectively and reach and serve society in its most inclusive sense. These days, one provider does not need to manage every aspect of a consumer experience from A to Z. We all need to work together. This is the death of ownership,” said Alqrainy .

Travel and entertainment: navigating digitally in the experience economy

While a drop in travel and live entertainment sales was inevitable in 2020, the survey shows that the sector is regaining momentum and making its presence felt in the digital economy as it continues to grow.

According to Checkout.com’s findings, 20 percent of MENA consumers purchased entertainment services online in the past year, and 14 percent reported purchasing them more often now than in 2021. Additionally, 32 percent shopped for travel services online in the past year, with 21 percent of consumers who report buying them more often now than in 2021

Alexandre Morinpayments director – risk and fintech, We’re walkingthe region’s largest travel market, said: “MENA has become a priority market for many of the world’s tourism boards, as it is a reliable source of long-term visitors with excellent purchasing power.”

Fintech’s relentless growth

The survey shows that remittance apps remain the most used form of fintech in MENA, but as other products increase, so does adoption. The report found that 82 percent of consumers in MENA will use some form of fintech app in 2022, up from 76 percent in 2021.

Innovation has been underpinned by solutions such as Visa’s Account Funding Transactions (AFTs) that draw funds from an account and for use on a prepaid card, top up a wallet or fund a person-to-person (P2P) money transfer. “The safe, reliable and rapid movement of digital money between individuals, businesses and governments is the engine that drives today’s global economy”, said Dr. Saeeda Jaffarsenior vice president and group country manager for the GCC, Visa.

Meanwhile, half of consumers in markets such as KSA and the UAE used Buy-Now-Pay-Later (BNPL) options this year, and as many as 67 percent in MENA indicated they may use it in 2023.

In crypto, 55 percent of 18-35 year olds in the UAE and KSA would like to be able to pay for goods and services in crypto or stablecoins in the next 12 months.

“In the past, merchants saw BNPL as just another payment method and often compared BNPL services with other payment providers, resulting in downward pressure on prices. However, we are seeing merchants increasingly focus on overall growth, including marketing, customer experience and product maturity . As a result, we see a win-win, sustainable partnership model,” said Sargun BawaVP of growth at Tamarathe homegrown BNPL platform.