The creation of cohesive transnational online marketplaces is often undermined by fragmented payment infrastructures and underdeveloped regulations. However, residents of the Middle East, North Africa, and Pakistan (MENAP) region are increasingly part of the global digital economy as the borderless nature of e-commerce results in international integration.
The rising digital economy is changing regional socio-economics, as people demand digital services, and governments transform economies. A recent Checkout.com study showed that approximately 25 percent of consumers in states such as the UAE and Saudi Arabia feel that the “internationalisation” of politics, economics and business are vital if their economies are to transform.
People recognise commerce’s vital role in achieving internationalisation. In fact, the Gulf region saw a 214 percent year-on-year increase in cross-border online sales in mid-2020. Moreover, around 1-in-3 consumers in MENAP view international shopping as the main benefit of internationalisation. According to the World Bank, remittances across the MENA region reached USD 56 billion by the end of 2020 and events including Expo 2020 and World Cup 2022 will further bolster internationalisation.
Best-in-class payments
At the forefront of these changes are a series of fintech firms leading a revolution in digital payments. Digital payment methods such as E-wallets, apps and buy now and pay later (BNPL) services are rapidly becoming the norm.
In the case of BNPL, Saudi firm Tamara was the first such company to enter the Saudi Central Bank’s regulatory sandbox program for fintechs and startups. Tamara now works with over 1,000 vendors across the region and recently secured a $110 million funding round, led by Checkout.com.
In this regard, the private sector is vital in helping to strengthen the underlying payments infrastructure required for digital businesses to thrive. This is what Checkout.com looks to do.
We have supported businesses across the region from day one. We recognised their immense potential and strive to offer the best-in-class digital payments they required to unlock it.
Since 2019, we’ve handled over 400 million e-commerce transactions, offering all major credit and debit cards, digital wallets including Apple Pay and Google Pay, and local options including Fawry, mada, Knet, QPay and more. We work with companies like OSN, AlShaya, Careem and tajawal to help them succeed.
A financial service revolution
As the regional fintech environment grows, governments are recognising that they must support digital payments and digitise their economies. Many are keen to replace regulatory barriers that may have hampered progress in the past. Regulators such as the UAE Central Bank and the Saudi Arabia Monetary Authority (SAMA) now see themselves as enablers of innovation.
Everything points to the acceleration of digitisation and the creation of real value for businesses and consumers. While challenges certainly exist in unlocking the full potential of digital commerce in the region, the opportunity has never been greater to forge a new level of regional and global integration — one that has been missing for far too long.
Download Checkout.com’s latest report and stay abreast of the ever-evolving e-commerce environment.
