Global contactless, non-cash, debit card, credit card, mobile and digital transactions are expected to cross more than $100 trillion in 2019, including $77 trillion cross-border interbank transactions through SWIFT.
Paymentology, the UK based innovative payment technology solutions provider, is working closely with banks, financial institutions and help change the way consumers make payments through cards, cash, mobile phones, etc, as real-time digital payment transaction is set to jump faster than other formats due to COVID-19 pandemic.
E-commerce sales revenue in the Middle East and North Africa region is forecast to grow at a compound annual growth rate (CAGR) of 16.9 percent between 2016 to 2021 to reach US$48.8 billion (Dh179 billion) in 2021, according to Deloitte, the global accounting firm.
The UAE is expected to lead the market, followed by Saudi Arabia and Qatar. These countries are expected to jointly account for more than 50 percent of the forecast revenue in 2021.
The region’s current internet penetration rate is 60 percent, well above the global average of 51.7 percent. Currently, only 15 percent of businesses in the Middle East have an online presence and almost 90 percent of the online purchases in the region are shipped from abroad, according to technology research company Gartner.
The e-commerce and digital payments market will see a massive growth as more people start using smart phone, smart payment options and when businesses shift online. The growth of the e-commerce and digital payments could be fast-tracked by technologies embedded in the payments systems by fintech providers such as Paymentology which will soon start installing its next-generation technology to offer the best user experience in processing safe and secure payments.
According to Forbes Middle East and Marmore MENA Intelligence, online sales in the Middle East are estimated to account for only 2 percent of the overall retail sales, much lower than the 15 percent in developed markets: thus confirming the huge untapped potential for e-commerce players .
“The regional retail market is on the verge of a digital disruption, with industry players undergoing a structural shift from traditional in-store concept to online channel through the adoption of digital technologies,” Deloitte said.
The global digital payments market is expected to grow from $3.88 trillion in 2019 to about $5.43 trillion in 2020, according to a report by Research and Markets, a global online market intelligence provider. However, this is only a fraction of the amount of money that changes hands through contactless payment channels, such as credit and debit cards, online payments, mobile payments and other digital channels.
In 2019, non-bank online payment platforms in China processed RMB250 trillion, nearly US$35 trillion, according to the People’s Bank of China (PBOC), showcasing the platforms’ widespread adoption. This perhaps makes China the largest country in the world to process digital payments.
“People are using digital payment options to avoid contact and spread of infection through direct cash handling, and also to adhere to social distancing to curb the spread of Covid-19. Due to closure of local market places and to avoid public gathering, people prefer online purchase of essential supplies, which in turn is increasing the demand for the digital payments market. The market is expected to record a Compound Annual Growth Rate (CAGR) of 20 percent and stabilize at $8.05 trillion by 2023,” Research and Markets, said in a report.
Global non-cash transactions surged nearly 14 percent from 2018–2019 to reach 708.5 billion transactions, the highest growth rate recorded in the past decade, according to the World Payments Report 2020 by Capgemini Research Institute.
Asia-Pacific surpassed Europe and North America to become the 2019 non-cash transactions volume leader, at 243.6 billion. The growth was driven by increasing smartphone use, booming e-commerce, digital wallet adoption, and mobile/QR-code payments innovations. It was led by China, India, and other SE Asian markets (32% growth).
In addition to these, cross-border inter-bank transactions last year doubled to nearly US$77 trillion in 2019, up from US$40 trillion in 2018, through the Society for Worldwide Interbank Financial Telecommunication (SWIFT) – reflecting the changing payments transaction landscape worldwide.
“Amid disruption, the payments industry is coming to grips with the digital shift of retail and B2B customers. The holy grail for payments firms lies in providing differentiated offerings that feature speed, convenience and end-to-end customer experience,” says the World Payments Report 2020 by Capgemini Research Institute.
“As the payments horizon broadens, players move digital capabilities to the front burner to cook up engagement-led services and tasty ecosystem propositions, leaving undifferentiated incumbents with a bland diet.”
In the coming years, instead of going out for shopping, most consumers will order essentials – food, beverage, grocery supplies, household shopping, and making payments for almost everything else sitting at home, be it ordering a plumber to fix a pipe leak to fetching a mason to repair a wall plaster that fell off – as all of these services will be made available through mobile applications and the services could be availed through the apps.
Customer convenience and Payment experience will be the deciding factor for consumers to choose the best vendors or banks for making payments. This explains why the digital payment transactions are going up while payments through mobile wallets and apps are catching up.
Financial technology companies such as Paymentology is bringing those conveniences and Customer experiences to the consumers across the world and in the Middle East where it made its foray this year.
Paymentology’s entry in the Middle East market comes at a time when demand for contactless and non-cash transactions soared after the COVID-19, prompting businesses and financial institutions to shift towards the digital and smart payment solutions. Middle East and Africa were among the fastest growing digital payments markets last year – booking an 18 percent jump from 2018, World Payments Report 2020 said.
“The consumers are fast moving into the contactless, digital and mobile payment environment and we are helping financial institutions and vendors to upgrade the payment technologies to the next level of sophistication and excellence to offer the best customer experience with air-tight security,” Shane O’Hara, CEO of Paymentology, said.
“Consumers will switch to payment technology that offers them the best customer experience, safety, security and a peace of mind. Our cloud-native propriety technology is ahead of its time. As the Middle Eastern banks seek more advanced technology for their customers, we are more than ready to offer them the best.”
Lockdowns, virtual working arrangements and widespread fear of infection have caused most commercial activity to move online – be it a Zoom call for business, or a look at the online grocery catalogue. The foundation for this entire transition is a quick, reliable and secure online payments infrastructure.
A Boston Consulting Group report from July revealed that Covid-19 and all its repercussions present a tremendous opportunity for the FinTech sector. Capgemini’s report notes the devastating effect that Covid-19 has had on the financial sector, but also presents it as an accelerating force for digital payments – highlighting the sheer pervasiveness of the crisis.
Launched in 2015 and with accreditations to operate globally, Paymentology is firmly positioned as a leader in the payment processing world. It has been chosen by banks such as Revolut and Standard Chartered’s Mox Bank to support their ground-breaking and highly customer centric payment programmes.
The technical expertise of its people and understanding of the banking space, mean that Paymentology can continuously innovate its services to enable our customers to deliver competitive payment products to the market.