By: Remo Giovanni Abbondandolo, SVP of MENA, Checkout.com
Covid-19 changed a lot of consumer habits. We saw rapid adoption of digital payment methods especially in the Middle East, North Africa and Pakistan (MENAP) in the past eighteen months. More and more people in the region embraced digital commerce channels for payments. As per Checkout.com’s latest research 60% of consumers in MENAP say they prefer to pay using a digital payment method. This is a 20% increase from 2020. Unsurprisingly, we see the use of cash has plummeted. According to reports from Visa, its usage has declined by as much as 75% in some markets.
But what’s interesting is that we’re not simply witnessing a ‘forced’ change in behaviour due to initial pandemic protocols. Instead, there’s a genuine shift in consumer mindset. And that’s not only leading consumers to embrace digital payment. It’s leading them to experiment with a wide variety of payment methods. The emergence and meteoric growth in the use of buy now, pay later (BNPL) encapsulates this trend. Checkout.com’s data finds that a quarter of the region’s population has used a BNPL option in the past 12 months. Numbers mean that the MENAP region has quietly become a BNPL leader, with the pace of adoption outstripping that seen in North America and Europe.
Saudi-headquartered, Tamara, is one of the region’s BNPL leaders. In the past six months, its transaction volume has grown by 75% on average month-over-month and it’s onboarded over 1,200 major brands. It also announced the largest Series A round in the region, led by checkout.com. Tamara’s CEO and Co-Founder, Abdulmajeed Alsukhan is not surprised that consumers in the region have embraced BNPL. “It’s no big secret that MENA’s payments ecosystem has long needed improvement,” said Alsukhan. “BNPL provides a great alternative to cash as it replicates the experience of receiving the product or service before paying for it. Also, compared with traditional credit cards, BNPL is transparent and easy to use, which also appeals to consumers.
“Merchants offering BNPL are not only providing their customers with a better experience,” adds Alsukhan. “They’re also likely to see their revenues increase. That’s because customers paying with BNPL tend to convert more often at the checkout and place larger orders than they would when using other payment methods. To put this in perspective, we typically see a merchant’s checkout conversion increase anywhere between 10% to 30% when offering BNPL. While their Average Order Values increase by 30% on average — and by as much as 85% in some cases.”
Moving towards digital payments like BNPL creates a tremendous opportunity to transform the customer experience. Brands that capture this opportunity are set to unlock new growth opportunities and increase revenues. checkout.com works with the region’s largest brands to offer their customers some innovative digital payment methods. Their team of payment experts work in partnership with it’s merchants to help them analyse their payment flows to uncover the optimum solution to meet their objectives.
This work has allowed businesses like OSN to stop accepting cash payments entirely from their customers. Instead, they’re now using Checkout.com to offer digital payments like Apple Pay across the region, Fawry in Egypt, KNET in Kuwait, and mada in Saudi Arabia. The move has reduced risk, cut costs and allowed them to open their service to a new segment of customers.
MENAP’s payments landscape is alive with innovation, and the speed of change we’re seeing is phenomenal. And our data shows no signs of this slowing down. For instance, over 50% of consumers say they’ll use BNPL later at least once in the 12 months. What’s exciting is that these trends are not only transforming the interactions between consumers and businesses. They’re laying the foundation to embrace digital across every sphere and unlock prosperity and growth for all across the region.
Al Seef is a charming attraction which blends the old and newJanuary 14, 2022 | By Zubina Ahmed
A Dubai-based female entrepreneur Marie-Hélène Stavelot has launched an online platform thatJanuary 11, 2022 | By Justina Eitzinger
Foodlink Global Restaurants & Catering Services, the F&B services enterprise in India
‘Tis the time to be jolly! The festive season is back. Celebrate
“It sounds like this, Luh Pan Koh-ti-dyan and means ‘the daily bread’,
The long weekend might be over but the Etisalat Beach Canteen 2021
UAE gears up to celebrate this year’s National Day celebrations in the
UAE-based Etisalat Group has signed an agreement with elGrocer, a leading online
Amazon.ae announced that the 11.11 sale is back once again this year
Abu Dhabi Cooperative Society’s COOP City store is now open in Lake
Union Coop, a consumer cooperative in the UAE, revealed that 78% of
Union Coop has opened its 23rd branch within the UAE in Jumeirah
Nando’s has revealed their revamped Sheikh Zayed Road outlet where newcomers and
UAE-based Al Maya Group announced that it will be boosting import of
SML, an end-to-end RFID specialist for brands around the globe, has announced
Retail sales during 2021’s November-December holiday season grew 14.1 percent over 2020
Dubai’s leading Cloud kitchen company Kitopi announced two new market launches in
Al Seef is a charming attraction which blends the old and new
Renowned Lollipop and sugar confectionery brand Chupa Chups opened its first ever experiential
Leading luxury brand Louis Vuitton opened its first travel retail store in
A Dubai-based female entrepreneur Marie-Hélène Stavelot has launched an online platform that
UAE-based retail distribution company GMG has said it will open more than
The first weekend of the year will begin with some music and
H&M, the world-famous retail clothing company founded in Sweden, has revealed that
Deerfields Mall, Abu Dhabi’s community mall, has relaunched its Farmers Market running