Report Overview

Deepening smartphone penetration, proliferation of innovative FinTech solutions, and a growing shift from cash to digital payments are the main factors driving the growth of GCC Digital Payments Market during the forecast period between 2023 and 2029.

GCC Digital Payments Market – Industry Trends & Forecast Report, 2029

GCC digital payments market size was estimated at USD 86.78 billion in 2022. During the forecast period between 2023 and 2029, the GCC digital payments market size is projected to grow at a CAGR of 12.93% reaching a value of USD 203.37 billion by 2029. Gulf Cooperation Council (GCC) is a group of six countries (Bahrain, Kuwait, Qatar, Oman, Saudi Arabia, and the UAE) in the Persian Gulf. Deepening smartphone penetration, the proliferation of new FinTech solutions and a growing shift from cash to digital payments, the GCC region has experienced a significant increase in digital payment volumes are the main factors driving the market's growth. Additionally, governments in the GCC region are actively promoting digital payments, which is contributing to the growth of the market. These initiatives aim to enhance financial inclusion and drive economic growth through the adoption of digital payment solutions.

GCC Digital Payments Market – Overview

Digital payments refer to transactions that occur through digital or online channels, where there is no physical exchange of money involved. In digital payments, both the payer and the payee utilize electronic mediums to exchange money. This can take place on the internet, as well as on physical premises. It involves various methods that facilitate the transfer of funds electronically, eliminating the need for cash or physical payment instruments.

GCC Digital Payments Market

Growth Drivers

Growing Shift from Cash to Digital Payments

The growing shift from cash to digital payments in the GCC is driven by technological advancements, changing consumer preferences, and the strategic efforts of governments and businesses to embrace digitalization and enhance financial ecosystems. This trend is expected to continue as the region moves toward a more digitized and cashless future. Furthermore, the UAE has emerged as one of the most digital savvy countries in the world, with consumers using their smartphones extensively for shopping and completing purchases. This trend reflects the region's rapid digital transformation and the increasing reliance on digital native payment methods. For instance, data published by the Central Bank of Bahrain (CBB) reveals about 50% year-over-year increase in digital payment volumes in Bahrain, with mobile wallet payments experiencing a significant surge of 196% during the same period. In Saudi Arabia, electronic payments have surpassed cash transactions, representing 62% of payments across all sectors.

Restraints

Infrastructure Challenges

The lack of adequate infrastructure hinders the seamless and efficient adoption of digital payment methods, leading to certain impediments that affect the market's growth. One of the key infrastructure challenges is the availability of reliable digital connectivity, including internet access and network coverage. In specific areas within the GCC region, especially remote or less developed regions, internet connectivity may be limited or unstable. Without robust digital connectivity, digital payment transactions may suffer from delays, disruptions, or security issues, discouraging users from embracing digital payment methods. The adoption of digital payments also relies on merchants' ability to accept digital transactions. Small businesses and establishments may lack the necessary infrastructure, such as point-of-sale (PoS) systems or digital payment terminals, to process digital payments. This limitation restricts the options for consumers to make digital payments, negatively affecting market growth.

Impact of COVID-19 on GCC Digital Payments Market

The impact of COVID-19 on the GCC digital payments market has been significant, driving a surge in the adoption of digital payment methods and accelerating the shift towards cashless transactions. The pandemic necessitated social distancing measures and safety precautions, leading to changes in consumer behavior and preferences. During the COVID-19 pandemic, there was a notable increase in the use of digital payments across the GCC region. With restrictions on movement and a focus on contactless transactions, consumers turned to digital payment methods as a safer and more convenient alternative to managing physical cash. The GCC countries witnessed a surge in e-commerce activities during the pandemic, as consumers turned to online shopping for their everyday needs. The increased online transactions further contributed to the growth of digital payments in the region.

GCC Digital Payments Market

Segmental Coverage

GCC Digital Payments Market – By Component

Based on component, GCC digital payments market is split into solutions and services segments. The solutions segment is divided into Application Program Interface, Payment Gateway, Payment Processing, Payment Security & Fraud Management, Transaction Risk Management, and Other subsegments. The services segment is subdivided into Professional Services, Consulting, Implementation, Support & Maintenance, and Managed Services segments. The solutions segment is the leading component segment. The solutions segment, encompassing API, payment gateway, and payment processing, offers seamless and efficient payment solutions for businesses and consumers. With the rise in e-commerce activities and the need for secure and convenient payment methods, businesses in the GCC have been actively adopting these digital payment solutions. On the other hand, the services segment complements the solutions segment by providing support and assistance in the adoption and maintenance of digital payment systems. While the services segment is essential for the successful implementation of digital payment solutions, the solutions segment takes the lead in driving market growth due to its direct impact on payment processing, security, and user experience.

GCC Digital Payments Market – By End User

On the basis of end user, GCC digital payments market is divided into BFSI, Healthcare, IT & Telecom, Media & Entertainment, Retail & E-Commerce, Transportation, and Other segments. The retail segment holds a substantial market share. The retail industry is experiencing vast opportunities with the advent of digital payment methods. As one of the early adopters of digital payments, retailers initially relied on debit and credit cards for transactions. However, with advancements in the payments industry, retailers have upgraded their payment devices to cater to the rising demand. In the realm of media & entertainment, service providers are adopting diverse payment channels to cater to their users effectively. Within the industry, there is a wide array of digital payment technologies available, encompassing credit cards, debit cards, digital wallets, and mobile payments, among others.

GCC Digital Payments Market - By Mode of Payment

Based on mode of payment, GCC digital payments market is segmented into Payment Cards, Debit Cards, Credit Cards, Prepaid Cards, Point of Sale (PoS), Unified Payments Interface (UPI) Service, Mobile Payment, and Online Payment. Among these, the mobile payments segment holds a significant share during the forecast period. Data published by the Central Bank of Bahrain (CBB) reveals that in 2021, when it came to mobile wallet payments alone, the Middle Eastern country witnessed a yearly volume increase of 196% during that same period. Others mode of payments also holds a substantial growth as a presentation by Amazon Payment Services highlighted that 2021 was the first year that electronic payments eclipsed cash transactions in the Saudi Arabia to represent 62% of payments across all sectors.

GCC Digital Payments Market – By Country

The in-depth research report on GCC digital payments market covers the market in all the six GCC countries: Saudi Arabia, UAE, Qatar, Bahrain, Kuwait, and Oman. UAE holds a substantial market share in GCC digital payments market. As the appetite for digital payments continues to climb, with recent research stating that more than 50% of UAE consumers plan to go fully cashless by 2024. Furthermore, according to ACI Worldwide, the Kingdom of Saudi Arabia (KSA) and Bahrain are the leading real-time payment markets. While KSA is the biggest market when it comes to real-time transaction volumes, Bahrain leads in terms of consumer adoption thanks to new, sophisticated use cases and digital payment services.

Competitive Landscape

Major players operating in GCC digital payments market include MyFatoorah, Mashreq Neo, Telr, CashU, Checkout, 2Checkout, CCAvenue, Cybersource, Amazon Payment Services, PayTabs, Paycaps, Hyperpay, and Stripe. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In June 2023 - Mastercard partnered with UAE-based banking app Bankiom to launch digital payment cards across the UAE, Saudi Arabia, Bahrain, Kuwait, and Oman. With the partnership, Mastercard aims to drive digitalization in the payments landscape across the GCC region.

Scope of the Report

By Component

• Solutions

  1. Application Program Interface (API)

  2. Payment Gateway

  3. Payment Processing

  4. Payment Security & Fraud Management

  5. Transaction Risk Management

  6. Others

• Services

  1. Professional Services

  2. Consulting

  3. Implementation

  4. Support & Maintenance

  5. Managed Services

By Mode of Payment

• Payment Cards

• Debit Cards

• Credit Cards

• Prepaid Cards

• Point of Sale (PoS)

• Unified Payments Interface (UPI) Service

• Mobile Payment

• Online Payment

By End User

• BFSI

• Healthcare

• IT & Telecom

• Media & Entertainment

• Retail & E-Commerce

• Transportation

• Others

By Country

• Saudi Arabia

• UAE

• Qatar

• Bahrain

• Kuwait

• Oman