Bahrain is currently at an advanced stage in its digital transformation journey in the information and ICT sector, which is one of the pillars of the development process in the Kingdom. Politicians in Bahrain, led by services committee chairman, Ahmed Al Ansari, are leading the case for a renewed drive to accelerate the adoption of electronic payments.
A group of MPs in Bahrain have pressed the government to transition to a fully cashless society within a decade, marking an acceleration of the demise of paper currency in the Middle East.
Research indicates that consumers in the Middle East are increasingly trusting of online payments, with 81% saying that they now trust the security of online transactions.
According to a European Payments Council study, the MENA region will process around 139 billion individual non-cash transactions in 2022, which is 90 billion more than five years ago. The only markets to surpass that growth are emerging ones in Asia.
Bahrain’s advanced digital infrastructure and decision to move all government services to the cloud has enabled a quick shift away from cash during Covid. The Kingdom’s national electronic wallet, BenefitPay announced a 785% increase in the number of remittances through its Fawri+ service in the year 2020 – exceeding $5m.
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“Increasingly, people are using online payment apps for monetary transactions,” Al Ansari said. “Payment for most government services has also shifted online, referring to Bahrain’s decision to process payments for governments services through digital channels only.
“A lot of people nowadays don’t even go to ATMs, they either use debit/credit card directly when shopping or pay through an e-wallet,” he said, adding that printing physical money is expensive and electronic security or encryption is much cheaper.
With even small corner shops now accepting payments through e-wallets, the case for cash was no longer, according to Al Ansari.
Aside from quicker, easier, and more hygienic transactions, cashless payments improve security by creating digital paper trails to help reduce fraud and money laundering.
