What is Middle East Payments? The Complete Beginner's Guide

What is Middle East Payments? The Complete Beginner's Guide

introductory

With the rapid development of global e-commerce, the Middle East is gradually becoming an important market for cross-border payments. Due to the special characteristics of culture, religion and financial system, the payment methods in the Middle East are significantly different from other regions. This article will introduce in detailWhat is Middle East PaymentsIt covers its characteristics, mainstream payment methods, development trends and how companies can enter the market, helping you to fully understand the opportunities and challenges of this emerging market.

I. The unique context of payments in the Middle East

1. High cash dependency

Despite the increasing trend of digitisation, many Middle Eastern countries (e.g. Saudi Arabia, UAE) are still accustomed to using cash for transactions. As a result, COD (Cash on Delivery) is still one of the mainstream settlement methods on e-commerce platforms.

2. Islamic finance compliance

Sharia Law prohibits interest (Riba), so traditional credit card or loan models need to be adapted to local regulations. "Islamic banks" offer Shariah-compliant financial services, such as interest-free instalments.

3. Youthfulness and high internet penetration

The high smartphone penetration rate in the Gulf Countries (GCC), with over 50% of the population under 30 years old, is driving the rapid growth of mobile wallets and digital payments. For example, Samsung Pay usage continues to rise in the Middle East.

II. Mainstream Middle East payment methods

1. Cash on Delivery (COD)

  • Applicable Scenarios:: B2C e-commerce platforms (e.g. Noon, Souq).
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III. Trends in the Middle East payments market

1. Rapid growth in digital payments

Digital payments are rapidly gaining popularity in the Middle East, although cash transactions still dominate. According to Statista, digital payment transactions in the Middle East and Africa (MEA) in 2023 are projected to reach$250 billion., with an annual growth rate exceeding 20%. key drivers include:

  • government supportFor example, Saudi Arabia's Vision 2030 programme promotes a cashless society.
  • FinTech investment on the rise: Local payment companies like PayTabs and Telr have received significant funding.

2. The rise of buy now pay later (BNPL)

Buy Now, Pay Later (BNPL) has gained popularity in the Middle East as Islamic finance has restricted traditional credit models. Example:

  • Tabby (UAE)-Allows users to pay in instalments without charging interest.
  • Tamara (Saudi Arabia)-Partnership with local e-commerce platforms to provide flexible repayment options.

3. Growing demand for facilitation of cross-border payments

As cross-border e-commerce grows and consumers want to buy international goods in a local way, companies need to integrate the following solutions:
| Challenges | Solutions
|——|———-|
|Currency exchange is complex |Support multi-currency settlement (USD/AED/SAR) |
| Strict compliance requirements | Complies with AML AML & CTF regulations

IV. How to enter the Middle East payments market? Key Strategies

For companies looking to expand into this market:

A) Choosing the right partner

✔️ Local acquirers : Network International (Dubai), Geidea (Saudi Arabia)
✔️ Cross-border gateway : Checkout.com , Stripe already covers some Gulf countries

B) Optimise checkout experience

✅ Arabic interface + right-to-left (RTL) layout adaptation
✅ Simplified KYC process (e.g. only mobile phone number registration is required)

# Conclusion

Understanding "what is real payment in the Middle East" requires a grasp of three core elements:
1️⃣ Respect Cash Habits & COD Needs
2️⃣ Compliance with Islamic finance principles
3️⃣ Keeping up with the wave of mobile transformation

With the payment methods and development strategies described in this article, companies can tap into this high-potential market more effectively.

📌 Extended Reading Suggestion: 'Middle East E-Commerce Report 2024' 'BNPL Industry Analysis in GCC Region'