While consumer payments have been declining in 2020 and 2021 due to Coronavirus (COVID-19), card payments have continued growing. Consumers have been favouring contactless payments, seen as the most hygienic means of paying for goods, as well as using e-commerce more due to periods of home seclusion, which has served to speed up the move away from cash. M-commerce has also been receiving further impetus from the pandemic, with dynamic growth across most of the region.
Consumer spending patterns in Middle East and Africa have been disrupted by the COVID-19 pandemic. This is both in terms of the direct impact of the measures to slow the spread of the virus, which have generally been favouring cashless transactions, or the economic impact of these measures, which have been hitting overall consumer spending, with some countries, eg Nigeria, worse hit than others by this.
While cash remains an important payment mode across the region, particularly in many African countries, it continues to lose out to alternative forms of payment. The pandemic seems to have helped increase the banked population and financial inclusion, while increasing use of e-commerce and m-commerce is also driving the move away from cash.
M-commerce continues to gain momentum across the region, supported by improving internet penetration and widespread smartphone ownership. Evolving shopping habits, with mobile becoming a multifunctional tool, will continue to help drive further m-commerce growth. Tablet m-commerce as well as mobile m-commerce (both remote and proximity) will record double-digit CAGRs over the forecast period.
In spite of the economic impact of COVID-19, the post-pandemic period is expected to see a return to positive annual growth rates for consumer payments, albeit only from 2022. While growth in card payment transaction value slowed significantly in 2020, it still, just, remained in positive territory, with a return to dynamic growth expected from 2021. Government policies will also continue to encourage the trend towards cashless transactions in the coming years.
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