Mobile commerce is set to comprise 70% of online transaction value by 2025 in the Middle East and North Africa (MENA) region and Mobile remittance services have grown to encompass more value-added services, resembling fully-fledged digital wallets in the wider Africa region.
These are findings from “The Map of World Payments”, that drills into e-commerce payment trends, with a focus on the Middle East and Africa.
The report shows how merchants serving these regions can tap into more revenue opportunities by offering locally-used payment methods.
FYST gathered data across 10 countries (Turkey, Israel, Qatar, Kuwait, United Arab Emirates, Pakistan, South Africa, Nigeria, Cameroon, and Kenya) and shines a light on the proportion of cards, bank transfers, digital wallets and other methods used for online purchases in each country.
Crucially, the report outlines which payment methods and card types are used in each country, demonstrating how important it is for merchants to be able to accept a wide array of locally-used payment methods to maximise transaction conversion rates and boost revenues.
The report shows that for e-commerce to be viable and successful, it requires high levels of internet and mobile network penetration, widespread supply chain logistics and transport infrastructure development, and the ability to accept digital payments through a range of methods.
The Middle East and Africa regions, encompassing two continents stretching from South Africa to the Arabian peninsula and north to Turkey, show up wildly varying differences in e-commerce infrastructure from country to country.
But the common denominator driving ecommerce as a whole is mobile commerce, which is set to comprise 70% of online transaction value by 2025 in the Middle East and North Africa (MENA) region, while the wider Africa region is forecast to have half a billion e-commerce users by 2025.
According to the report, credit cards are the most widely used online payment method across the MENA region, followed by bank transfers and cash-on-delivery.
But with digital wallets gaining in popularity, and currently making up around 20% of online spending, digital wallet usage is quickly catching up with credit cards and is set to overtake over the next few years.
Key data from report:
- In Turkey, nearly 70% of e-commerce purchases in 2021 were conducted via mobile apps, and the domestic card payment scheme TROY is widely used alongside Visa and Mastercard for online transactions.
- In Kuwait, although e-commerce usage is growing, currently most Kuwaiti companies don’t sell online to consumers. The majority of e-commerce transactions are made through cash-on-delivery.
- In Nigeria, the number of online shoppers is expected to hit 122.5 million by 2025, from 76.7 million in 2021. Digital wallets are expected to double their e-commerce market share to over 15% by 2025.
- In contrast, Cameroon’s internet penetration rate is only 35%, making it one of the least-developed e-commerce markets in Africa, but with 47% smartphone penetration, there is a huge opportunity for merchants to tap into fast-growing mobile commerce demand.
With the value of cross-border payments anticipated to hit $250 trillion by 2027, the launch of the report is timely, as e-commerce businesses move beyond merely offering digital payment capabilities to seek full 360-degree advice and support, and first-hand market insights to help them unlock new opportunities in the fast-evolving e-commerce space.
“Today, e-commerce businesses in the maturing and developing markets of the Middle East and Africa are at an inflection point – they know they need to have digital payment services in place,” explains Ryta Zasiekina, CEO of FYST.
“Map of World Payments report shows that with the vast improvements to mobile and internet infrastructure over the past decade, there are opportunities for in-country and cross-border e-commerce merchants to expand online sales with the right payment acceptance strategies tailored to local markets.
These variances show how important it is for merchants to add localised payment methods, local currencies, and tailor payment acceptance strategies carefully to each market.
By doing so, merchants can capture and convert more transactions, and reduce cart abandonment rates.”
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