Saudi Arabia, Egypt and the United Arab Emirates lead rise in payments
Payfort says online payments in the Middle East grew 22 per cent last year
Online transactions in the Middle East rose by 22 per cent in 2016, on the back of a surge in payments for events and entertainment, according to a region-wide survey conducted by the Amazon-owned company, Payfort.
The findings of the survey by the payments solutions company showed that Saudi Arabia, the biggest Arab economy, led the growth with a 27 per cent increase in online payments; Egypt, the most populous Arab nation, recorded a rise of 22 per cent, while the UAE saw a 21 per cent jump . Overall, events and entertainment was the fastest growing segment, registering a 33 per cent growth in transactions.
"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.
The report, each year, aims to shed light on real issues for the region's online business merchants, however, this year "we [have] put the control in the hands of our readers, providing them with interactive tools that allow them to easily adapt the date sets for their own needs and business decision making", he noted.
During 2016, a total of $30.4 billion of goods and services were purchased online in seven countries, a 22 per cent jump from the $24.9bn garnered in online sales during 2015. The UAE, the second biggest Arabian Gulf economy, had the biggest share of the value of online transactions at $12.4bn, Saudi Arabia with $8.3bn and Egypt with $6.2bn.
Digital payments for goods and services are on the rise in the region, especially in the UAE, which boasts one of the highest penetration of smart phones in the world. Increasingly, consumers are shunning bricks and mortar retail goods and service vendors, including banks for the online alternative. That has led to flourishing of online retail services, especially in the wake of Amazon's purchase of the online retailer Souq.com, earlier this year, for $650 million.
The biggest concern of online consumers remained security, with more than 50 per cent of cash-on-delivery customers polled saying that they would switch to online payments if they deemed it secure enough, according to the survey. The highest levels of cash-on-delivery payments were registered in Egypt, accounting for about 70 per cent of all transactions, followed by Lebanon where it was 60 per cent.
"Despite the enormous growth in the region's online payments and usage of e-commerce, 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 cyber crimes. They are also increasingly demanding, seeking faster and easier checkouts. "
The survey also showed that there was a greater interest in mobile payments, with 50 per cent of respondents in six out of seven countries expressing an interest in mobile payment apps.