Assessing the Payment Landscape in the Middle East and Africa

Strategy Briefing

About This Report

Jul 2013

Much of the Middle East and Africa remains untouched by traditional financial services. Moving forward, the key trends will be the expansion of the infrastructure required to allow for card payments, the continued conversion of unbanked consumers, and overcoming the cultural barriers that have adversely affected card penetration rates.

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Assessing the Payment Landscape in the Middle East and Africa

Region is one of the smallest card markets

The Middle East and Africa remains one of the smallest card markets globally, meaning ample opportunities for card players willing to invest in the region.

Cash remains king

The region has a strong and persistent cash culture. Even those who do carry a card tend to use it for cash withdrawals rather than direct payments.

Consumer spend increasingly rapidly in certain markets

Higher consumer spend is being driven by a rise in incomes, thanks to rapid urbanisation in the region, the emergence of the middle class, an improved business climate and the use of new technology to reach consumers.

High rates of poverty hold back the region

Sub-Saharan Africa has the highest rates of poverty in the world. Almost 800 million, or 93% of the population, live on less than US$5 a day.

Region has highest proportion of youth

The Middle East and Africa region had the highest proportion of the population under the age of 30 as of 2012. For payment players, the youth are often the subset of the population most open to new methods of payment.

Cards are projected to outpace all payment types

Card payments are projected to be the fastest-growing payment method as financial cards grow into a mainstream option across the region, and consumers become increasingly comfortable with the use of such cards.

Mobile will continue to be an important channel for reaching the unbanked

Mobile has transformed Africa over the last decade, as mobile telephones reached parts of the region that fixed telephone lines never did. The mobile phone has been a leapfrog technology, becoming a lifeline for rural and low-income consumers with no connection to the financial mainstream.

What this report includes

  • Top-level strategic analysis of how major consumer trends will influence global markets
  • Consumer insight
  • Impact across all relevant consumer markets
  • Unique graphics and case studies
  • Key market snapshots
  • Accompanying presentation to synthesise main findings

Why buy this report

  • Identify factors driving change now and in the future
  • Understand motivation
  • Forward-looking outlook
  • Briefings and presentation should provoke lively discussion at senior level
  • Take a step back from micro trends
  • Get up to date estimates and comment


Key findings

Regional Performance

Middle East and Africa equates to a new frontier for card players
Nearly three-quarters of all payments across region made in cash
Cardholders more likely to opt for cash withdrawal than payment
Cards have been the fastest-growing payment type since 2007
Region has lowest per capita spending on cards in the world
Egypt’s first electronic bill payment network tries to displace cash
Credit cards struggle to gain ground in Muslim-dominated markets
Usury laws also limit store cards across Middle East and Africa
Pre-paid cards are one of the smallest, but fastest-growing types

Regional Consumer Profile

Lack of stability and fear of corruption hold back the region’s growth
Urbanisation, growing middle class and technology spurring growth
Wide variations in Middle East and Africa consumer incomes
High rates of poverty hold back Sub-Saharan Africa markets
Highest rate of spend for MEA consumers is for housing and food
Middle East and Africa is home to some of the lowest savings rates
How the wealthiest top 10% of each market spend their money
High inflation rates could constrain consumer purchasing power
Israel’s consumer debt per capita is on a par with the US and UK
Pay-as-you-go lending model reaches those on irregular incomes
Population has boomed in Middle East and Africa over last decade
Middle East and Africa has highest proportion of youth population
Young Moroccans apply for cards in order to make web payments
Longer life expectancies may bode well for card payment players
Rise in tourism lifts card spend and improves infrastructure
Mobile phones more widespread than fixed telephone lines

Regional Prospects

Card payments in Middle East and Africa region far from maturity
Cash will continue to dominate across region despite card growth
Expansion of payment infrastructure will help boost card payments
Region expected to post greatest growth for credit and debit cards
Debit card volume is projected to outpace credit across region
Israelis’ love of credit cards overshadows potential for debit cards
Shift from traditional to modern retail formats could spur card usage
A ttachment to cash will continue to constraint card payment growth
Public and private sectors introduce financial inclusion initiatives
Private-public partnership led to Nigerian financial inclusion project
Recent regulatory decisions impacting the payments landscape
Internet connectivity more likely via mobile phone than computer
Mobile likely to be the channel for reaching the region’s unbanked
How the mobile phone introduced banking to Africa’s unbanked
M-PESA becomes poster child for African mobile money services
Key trends to watch in the Middle East and Africa in the near term


Data parameters and report definitions
Data parameters and report definitions, continued