Navigating MENA’s Digital Transformation: Success Stories and Collaborative Strategies for a Thriving Digital Commerce

Leading payment solutions provider Checkout.com has released phase two of its fourth annual report on digital commerce in the region, titled “The State of Digital Commerce in MENA 2024: Perspectives from the Leading Edge”. The report features thought leadership and insights from key players at the forefront of MENA’s digital economy who reflect on the dynamics that have shaped e-commerce, fintech, and payments over the past 48 months, and the impact they have had on the e-commerce landscape throughout the region.

The report affirms that as consumer preference for digital commerce grew, innovation, regulatory developments, and advancements within the payments, fintech, and the money movement sectors grew even more, driving businesses to increase their dependance on digital payments to meet the demand for faster and more secure payments.

Report contributors highlight the strategies businesses have employed that helped them successfully navigate this transition, leveraging innovative tools and platforms to reach a broader audience. Furthermore, they reflect on the fundamental role of governments in facilitating this digital transformation. They also share some recommendations for future initiatives and collaborations aimed at enhancing regional interconnectivity, improving fraud detection, and refining payment and financial regulations. Their strategies focus on bolstering regional connectivity in payment processes and regulatory frameworks.

The robust growth of digital commerce in MENA in recent years saw digital payment volumes grow by 658% since 2020, according to Checkout.com processing data. In its “The State of Digital Commerce in MENA 2024“ report, the company also highlights the impressive 80% growth since 2020 in the number of MENA consumers who report shopping online at least once a day.

“Our consumer and transaction data underscores how MENA’s traditionally cash-centric society has now become a leading digital-first market in just a few years,” said Remo Giovanni Abbondandolo, General Manager for MENA at Checkout.com. “Consumers are increasingly seeking choice and control in their shopping, payment, and money transfer experiences, which merchants and fintechs are beginning to recognize as a competitive advantage”.

Abbondandolo stressed the importance of adaptability, resilience and multi stakeholder collaboration in this dynamic digital landscape, underlining that embracing change is crucial for sustained growth, saying: “In the rapidly evolving digital economy of the region, adaptability, agility, and resilience are essential for maintaining competitiveness. Embracing the latest payment trends and technologies is crucial for enhancing performance through payments and achieving sustained business growth.

“As governments in the region implement forward-thinking policies, the interplay between regulation and businesses becomes increasingly vital. The insights shared by our contributors highlight that a cohesive approach involving all stakeholders—governments, businesses, and consumers—is essential to harness the full potential of MENA’s digital economy. This collaboration is particularly important for enhancing payment performance and driving growth in the years to come,” he added.

Prioritizing convenience and efficiency

When it comes to e-commerce, consumers in MENA show an optimistic outlook on their future online spending. Checkout.com data suggests that half of all shoppers in MENA anticipate increasing their online spending this year. The increased preference for digital payment methods reflects a profound shift towards convenience and efficiency in everyday transactions.

“The widespread adoption of digital solutions is not merely a trend; it has become a defining characteristic of the region. The clear efficiencies and conveniences offered by digital solutions are driving this transition,” says Imad Gharazeddine, Chief Executive Officer at Mamo.

Islam Abdul Karim, General Manager for Yango GCC confirms this by saying: “The emphasis remains on providing a seamless user experience where intuitive interfaces and streamlined payment processes are paramount.”

Acceleration of money movement and remittances

The region’s large expatriate population is also influencing the development of digital payments. According to Checkout.com data, total payment volumes for remittances and money transfers in MENA grew six-fold between January and December 2023, and the introduction of Account Fund Transfers (AFT) has fundamentally changed how remittances are processed.

“Looking ahead, we anticipate that growth in remittance frequency will continue to be driven by technology,” contends Amine Sabri, Group Chief Financial Officer at Astra Tech. “And with concerns about currency devaluation and inflation in neighboring countries, there’s likely to be more demand for inclusive fintech solutions.”

 Promoting financial inclusion

Supporting financial inclusion, contactless and mobile payment methods are now mainstream, with Apple Pay and Google Pay processing volumes surging by a factor of 14x and 4x respectively in the past 48 months, according to Checkout.com MENA processing data. Despite these recent advancements, the latest report highlights how ongoing efforts are necessary to standardize regulations across MENA and enhance financial inclusion. Joint efforts in digital education and training for SMEs could further unlock e-commerce potential and drive adoption in the region.

“There is still much more we can do to reach underbanked and unbanked populations, integrating digital payments into government services and enhancing cross-border payments,” says Amnah Ajmal, EVP, Market Development, EEMEA, Mastercard. “Underdeveloped digital payments infrastructure and services, as well as a lingering cultural bias towards cash, are also considerable challenges to overcome.”

 Integration and regional collaboration

According to report data, the region has achieved an impressive 91% digital payment adoption, which confirms that governments have made significant regulatory strides to encourage citizens toward a more digital approach.

Gül K?l?ç, Head of Payments – EMEA at Trendyol Group, notes that governments’ significant investments in payment systems not only reflect a commitment to modernization, but signal an alignment with global standards, creating “a fertile environment for digital businesses.”

However, contributors believe that collaboration among countries in the region holds great promise for creating a more integrated financial landscape. Establishing a unified system akin to other regions could streamline processes, enhance cross-border transactions, and promote greater financial inclusion.

“A more unified regulatory framework across MENA would facilitate smoother e-commerce operations and foster a more attractive investment climate,” says Amnah Ajmal, EVP, Market Development, EEMEA, Mastercard.

Checkout.com, a leading global payment solutions provider, has diligently tracked MENA’s e-commerce landscape for the past four years. The second phase of its annual MENA digital commerce report for 2024 is available to download here, with contributors including:

• Pallav Singhvi, Vice President and Head of Consumer Business, Almosafer
• Arjun Singh, Partner and Global Head of Fintech, Arthur D. Little
• Amine Sabri, Group Chief Financial Officer, Astra Tech
• Nikola Cabarkapa, Chief Operations Officer, Instashop
• Imad Gharazeddine, CEO, Mamo
• Amnah Ajmal, EVP, Market Development, EEMEA, Mastercard
• Majid Abdulrahim, Head of Strategic Partnership, Salla
• Gül K?l?ç, Head of Payments – EMEA, Trendyol Group
• Islam Abdul Karim, General Manager, Yango GCC
• Sergey Solyakov, Head of Payments, Yango