Highest rates of growth were in Saudi Arabia, Egypt and UAE
The Middle East region has seen a 22 percent increase in online transactions during 2016, according to data revealed by Payfort, an Amazon company.
Payfort’s 'State of Payments in the Arab World' report found the highest rates of growth to be in Saudi Arabia (27 percent), Egypt (22 percent) and the UAE (21 percent).
The report included data on four other key countries (including Jordan, Kuwait, Lebanon ad Qatar) and four online payment segments.
Additionally, the report identified “events and entertainment” as the fastest growing online payments sector, with 33 percent growth between 2015 and 2016.
“Our 2017 edition of the State of Payments report marks the most dramatic change to the report since we launched the project in 2014,” said Omar Soudodi, Managing Director of Payfort.
Among the study’s objectives this year was to examine consumer attitudes towards new fintech applications and service, and found ample room for growth in that sector. For example, 17 percent of those surveyed in the UAE are looking for better options to send international money transfers. Another 47 percent said were found to have yet to adopt online wallet technology.
In total, $30.4 billion worth of goods and services were purchased online in the seven countries during 2016, up 22 percent from $24.9 billion in 2015.
The top country in terms of dollar value was the UAE, with $12.4 billion of transactions and 21 percent annual growth, followed by Saudi Arabia ($8.3 billion in transactions and 27 percent growth) and Egypt ($6.2 billion in transactions and 22 percent growth).
The statistics show that the airline and travel sectors grew the fastest in Saudi Arabia, with 21 percent year-on-year growth in airline payment volume and 36 percent growth in travel and tourism. Egypt led the seven countries in the growth of online shopping, with a 32 percent increase in volume of payments. The UAE was the fastest growing country in the entertainment and events sector, at 36 percent.
Security was cited as a main concern by any of those that choose not to pay for goods and services online, with over 50 percent of cash-on-delivery customers stating they’d only switch to online payments if they were completely convinced it was secure. Cash-on-delivery was most popular in Egypt (70 percent usage) and Lebanon (60 percent usage).
“Despite the enormous growth in the region’s online payments and usage of ecommerce, security fears remain prevalent among consumers,” said Nardeen Abdalla, Marketing Director of Payfort. “Although we now see a greater willingness to make online transactions, consumers are increasingly aware of the risks of fraud and other cybercrimes. They are also increasingly demanding, seeking faster and easier checkouts.
The report also showed increasing interest in mobile payments, with 50 percent of respondents in six of the seven markets examined showing an interest. Use of mobile wallets was found to be widespread, particularly in Saudi Arabia (33 percent), Egypt and Lebanon (27 percent), Jordan (25 percent) and the UAE (23 percent).