DUBAI, UAE — May 14, 2024: Amidst an era marked by swift digital transformation, the digital economy in the MENA region demonstrates robust growth, soaring by an impressive 78% year-on-year in digital payment volumes since 2020. These revelations and more are unveiled in Checkout.com’s 4th annual MENA e-commerce report, titled: "The state of digital commerce in MENA 2024, A tale of rapid, sustained growth," launched this morning.
48 months of exponential growth
The report highlights unprecedented growth in the MENA region's digital payment volumes, as Checkout.com’s total processing value witnessed a staggering 658% surge since the onset of 2020. Notably, a remarkable 78% year-on-year growth between 2022 and 2023. This surge is a testament to the region's accelerated adoption of digital commerce, which continues to see a deepening consumer preference for online shopping.
Innovations such as AFT (Automated Funds Transfer) have played a pivotal role in facilitating this trend. Furthermore, the growth momentum of Checkout.com processing volumes is underscored by it securing its acquiring license in the UAE in 2023. As Checkout.com continues to expand, its trajectory mirrors the overall upward trajectory of digital commerce in the region
The findings also shed light on a robust increase of 56% in the number of MENA consumers engaging in e-commerce weekly or more since 2020. Furthermore, the growth rate for daily digital shoppers in MENA surged by 80% with Saudi Arabia leading the digital shopping spree with an astounding 180% growth in consumers shopping online at least once a week, followed closely by the UAE and Kuwait, each experiencing a 140% growth. This data underscores the deep and consistent change in online shopping habits among consumers in the region, which in turn demonstrates an increased trust in the system; a barrier to adoption noted in the 2020 report.
Additionally, the report highlights MENA consumers’ optimistic outlook on their future online spend, revealing that half of all shoppers anticipate an increase in their online spending over the next 12 months. Particularly, online shoppers in Saudi Arabia express significant enthusiasm, with 53% anticipating an increase in their spending in the coming year.
The increase in predictive spending demonstrates that there is resiliency and robustness to the digital economy in the MENA region. Despite increasing inflationary pressures and technical recessions breaking out across other developed economies, MENA presents an oasis of opportunity for global brands to expand and develop new operations in the market.
The unmistakable demise of cash
Discussing the payments landscape, the report marks a significant shift away from cash on delivery towards digital payment methods. Over the past 48 months, the preference for cash on delivery in the region has halved from 41% to 20%, reflecting broader acceptance and trust in digital payments, cards, and digital wallets. This shift is notably pronounced in countries like Saudi Arabia, UAE, and Kuwait, where the preference for cash has dropped to as low as 10% among the population.
This presents a unique chance for businesses to keep their costs down. With new technologically advanced payment solutions that present a more scalable and consumer-friendly experience. The previously increasing complexity and cost of operations, such as cash management and shipping logistics, for businesses in the region will continue to decline.
Payment security is the key loyalty driver
The report reveals that the number of respondents ranking payment security as the most important feature offered by an e-commerce business is growing exponentially. Furthermore, the silent revenue killer, namely false declines, continues to grow in the region with 23% reporting experiencing a falsely declined payment in the last three months. Moreover, 33% of MENA consumers report being victims of payment fraud, and understandably, security is valued. Alarmingly, a third of all shoppers surveyed indicated they would switch to a competitor's website following a single failed payment.
Remo Giovanni Abbondandolo, General Manager, MENA, at Checkout.com, reflects on these findings: "The sustained growth and rapid evolution of digital commerce in MENA are reshaping how consumers shop and pay. Our report not only highlights the remarkable strides in digital payment adoption but also signals a growing confidence among consumers in the digital economy.
“This report makes a case for the continued need for fintechs to analyze and optimize every aspect of their e-commerce experience as consumers become more deeply connected to digital shopping and payments. As our report identifies, a third of all shoppers surveyed would switch to a competitor if they experienced a single failed payment. So the cost of getting your payment performance wrong has never been higher. That’s why as a payment solution provider to businesses across the region and globally, Checkout.com drives performance in this dynamic landscape,” he added.
As Checkout.com continues to chart the course of digital commerce in MENA, the “The state of digital commerce in MENA 2024, A tale of rapid, sustained growth” report offers invaluable insights for merchants, policymakers, and stakeholders aiming to capitalize on the opportunities presented by this digital evolution.
Checkout.com, a leading global payment solutions provider, has diligently tracked the booming e-commerce landscape in the region for the past four years. The latest report delves into a retrospective analysis of 48-month trends, calculating growth rates to grasp the magnitude of change in digital commerce within MENA.