Five payment challenges that stand in the way of cross-border ecommerce success
What merchants expanding into MENA need to know
Top of any business strategy must be an understanding of how consumers want to pay. Offering a payment method that people like can make the difference between a sale won, or lost.
But knowledge at the category level — card, digital wallet, bank transfer — will get merchants only so far. Those categories are increasingly congested by different solutions. Customer-centric merchants will want to understand each payment category in its own right. When they do, customer preference will not be the only factor of interest. The coverage, cost, success rate and speed of remittance of each solution should also come into the equation.
So too, your ambition for segmenting your market. The Middle East and North Africa (MENA) is an enormous region — between 20 to 30 countries, depending on your definition. They include many of the wealthy OPEC nations; those with strong European ties, such as Israel and Turkey; through to countries synonymous with conflict and instability. A single payment strategy to cover the region will be too riddled with compromises. Yet, there comes a point when granularity becomes uneconomical. Merchants must decide on the right balance for them.
Marketing Trends in MENA
As we’ve mentioned, the region contains some of the world’s wealthiest and some of the world’s most unstable countries, but there are still some broad market trends in MENA that give merchants who plan to expand there valuable insights.
- Digital payment methods are growing - cash has remained king in much of MENA, meaning the adoption of digital payments has been relatively slow in comparison to other areas of the world. However, the deregulation of digital payments services by central banks in Egypt, Bahrain, the UAE and Saudi Arabia, alongside other changes, is encouraging significant growth in the spread of digital payments. For example, the pandemic, during which cash was seen as a potential carrier of the virus, boosted the use of digital methods, and could lead to lasting change. Additionally, new digital payment methods such as Careem Pay in the UAE, and STC Pay, a Saudi Arabian digital wallet are transforming how people pay
- Digital still faces challenges - that said, data security remains an issue in the region, as well as a relatively high risk of fraud. The other main challenge is that, in some emerging countries in MENA, a comparative lack of digital literacy could impact growth
- Smartphones have been widely adopted - MENA has experienced high internet and mobile penetration, partly thanks to the launch of less expensive smartphones that come with financing options. By the end of 2025, smartphone connections in the region could increase by 200 million to reach 565 million, encouraging a dramatic shift towards the use of mobile wallets.
- Fast internet access encourages use - MENA offers fast internet access (the average fixed internet connection is 80.39 Mbps and the average mobile internet speed is 91.06 Mbps) which enables quick money transfers via digital payments
Social media is enabling payments - the region’s social media platforms are enabling online purchase, where users can jointly spend cash with friends without the need for an account number
Local payment methods in MENA you need to offer your customers
Type: Digital wallet
Main country: Bahrain
What you need to know: BenefitPay is a mobile app that lets consumers make online payments via QR codes.
Main country: Saudi Arabia, Kuwait, UAE
What you need to know: Tamara is a MENA BNPL payment method that offers customers to split payments into 3 and 4. It is the market leader in Saudi Arabia for BNPL.
Type: Local card scheme
Main country: Kuwait
What you need to know: Knet lets merchants accept all local debit cards issued by the 11 member banks of Kuwait. It accounts for 80% of the country’s online transactions.
Type: Local card scheme
Main country: Oman
What you need to know: OmanNet routes debit card payments within Oman and GCCNET countries. It covers all debit cards issued by local banks in Oman, which account for approximately 90% of payment cards in the country.
Type: Digital card
Main country: Qatar
What you need to know: QPAY debit cards are issued by local banks and used by consumers to make online payments. The cardholder's identity is verified using a one-time passcode sent to their mobile phone via SMS.
Type: Debit card
Main country: Saudi Arabia
What you need to know: mada is a debit card issued by local banks in Saudi Arabia. It can be used to make payments online or at over 160,000 POS terminals in the Kingdom, and millions more internationally through the Visa, MasterCard, and Maestro networks. 30m mada cards are in circulation.
Name: STC Pay
Type: Digital Wallet
Main country: Bahrain
What you need to know: STC Pay is a Bahraini mobile wallet. The mobile app allows consumers to spend, save and manage their finances all in one place with a safer, more secure way to pay.
Local insights vs. scalability
Even merchants familiar with the region can struggle to keep pace with the emergence of new local payment methods. For international brands just starting to target these markets, it can feel like being dropped in the middle of a maze without a map. Acquiring, and maintaining, this knowledge will suck resources and budget. Yet the alternative — a generic, one size fits all payment strategy — is bound to fall short. So which approach to choose?
Shrewd merchants see the false dichotomy of this thinking. Instead, they leverage payment partners that can provide the technical infrastructure, and crucially the local knowledge too. The latter is about offering people their preferred payment choice; the former is about being able to make that happen. Some PSPs will have local knowledge, but without the full apparatus to action what’s best. Others will have the scale but not the local insights to apply it most effectively. Merchants with ambitions in the region should prioritize working with a PSP that can give them it all.
Checkout.com is available in the MENA region, offering various APM
If you’re expanding internationally, it’s vital to offer alternative payment methods (APM) - any form of payment that isn’t cash or a big brand credit or debit card. In many countries, they’re not just a nice-to-have, they’re often the most widely used payment method, and MENA countries are no different. Mobile wallets are increasingly popular thanks to the proliferation of smartphones and improving internet speeds, while domestic cards like QPay and OmanNet are growing in the Middle East. Offering APMs is the best way to maximize sales and optimize customer experience for businesses with global ambitions.
But how can you offer these alternative methods? Checkout.com operates in MENA and allows you to offer consumers in the region the option to pay using any of the methods listed above. Find out more about offering APMs with Checkout.com.
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