Consumers in MENA embrace digital payments
KUWAIT CITY, Aug 2: Adoption of a broader range of digital payment methods is accelerating in the MENA region and the technology fueling the future of payments is already here, according to Mastercard’s New Payments Index 2022. In addition to being aware of solutions like digital cards, biometric payments, BNPL (Buy Now Pay Later) and open banking, consumers in MENA are increasingly and actively using these solutions in their everyday lives.
Mastercard’s New Payments Index 2022 found that 85% of people in MENA have used at least one emerging payment method in the last year, including tappable smartphone mobile wallets, BNPL, biometrics, and payment-enabled wearable tech devices. Consumers are also making purchases in increasingly diverse ways, including through voice assistantsand social media apps.
Usage of digital payments increasing, use of cash declining
While traditional payment methods still have traction, one in five (19%) consumers in MENAindicated they used less cash in the past year. By contrast, 64% of MENA users (compared to 61% globally) increased their use of at least one digital payment method in the last year, including digital cards, SMS payments, digital money transfer apps and instant payment services. These behaviors are expected to continue, with comfort and security key to growing adoption.
The Index confirmed security is top of mind when deciding what payment methods to use, globally and in the MENA region (41%). Other considerations are ease of use, rewards and promotions. Highlighting sustainability as a key driver in the region, 31% of MENA consumers said they also consider social and environmental benefits.
The Mastercard New Payments Index 2022 further shows:
High awareness of Buy Now, Pay Later (BNPL) Installments as a budgeting tool
The majority of MENA consumers have heard of BNPL with 79% saying they are familiar with the concept, and almost half (45%) arealready comfortable using it today. Consumers want the flexibility and convenience of BNPL, but with the sense of security associated with a trusted provider like a bank or payment network.
Those that have used BNPL find it useful for emergency and big-ticket purchases, as well as increased purchasing power. Consumers also find BNPL useful for unique use cases, including as a budgeting and financial planning tool.
Receptiveness to more direct Account-to-Account (A2A) payments
The majority of consumers are seeking greater agility to optimize bill payments, prioritizing control, flexibility, convenience, and integrated payment technologies.Mostconsumers are open to direct account-to-account payment options, by linking their account to a merchant site for future purchases. 81%of MENAconsumers using accountto-account paymentshave maintained or increased their usage in the last year.
Two thirds (68%) agree they are interested in a bill payment option that allows them to change the date they pay their monthly bills, mostly due to an irregular income.