How to use local payment tools in the Middle East? The Complete Guide

Middle East Payments Market Overview

The Middle East has a unique digital payments ecosystem dominated by multiple localised payment methods. With the rapid growth of e-commerce in the region, understanding and integrating local payment tools is critical for any business looking to expand into the Middle East market.

Cash usage in major Middle Eastern countries such as Saudi Arabia, the UAE and Egypt is rapidly declining, while digital wallets and bank transfers have risen significantly. According to statistics, more than 60% Middle Eastern consumers prefer local payment methods to international credit cards for online shopping.

Introducing Mainstream Middle East Local Payment Tools

1. Mada (Saudi Arabia)

As the leading debit card network in Saudi Arabia, Mada reaches more than 90% card users in the country. Access to Mada means reaching almost all Saudi online consumers.

2. Fawry (Egypt)

Fawry, Egypt's leading electronic bill payment platform, has more than 150,000 service points and supports multiple top-up methods such as cash deposits, mobile wallets and bank transfers.

3. BenefitPay (Bahrain)

BenefitPay, the instant payment system launched by the Central Bank of Bahrain, has become one of the most popular mobile wallet apps in the region, supporting P2P transfers and merchant payments.

4. KNET (Kuwait)

Kuwait's national electronic transaction processing system, KNET, is the country's main debit card network and processing centre and is used by almost all local banks.

How can you access Middle East Local Payments for your business?

Comparison of API Integration Methods

Most Middle Eastern local payment providers offer two main integration methods: direct API interfacing or through third-party aggregation platforms. Direct interfacing usually requires a longer technical development cycle but is less expensive, while aggregation platforms charge a fee but allow for quick and unified multi-mode access across multiple countries.

Technology implementation steps:

1. Choose the right access mode -Determined based on the size of the business and expected transaction volume
   2.Get Merchant Qualification-Some countries require locally registered entities
   3.Completion of the technical interface-Includes front-end display and back-end notification processing
   4.Test environment validation-Ensure processes are functioning properly
   5.Upline production environment

Strategic Recommendations for Optimising Cross-Border Settlement

Recovering funds from the Middle East can be challenging due to exchange controls and policy differences:

• Choose an experienced acquirer:: Co-operate with international acquirers who are familiar with local regulations
• Use of offshore accounts:: Establishment of special accounts in financial centres, such as Dubai, to handle financial flows
• batch settlement strategy:: Avoiding large, one-time transfers that raise regulatory concerns
• Maintaining a record of compliance:: Complete maintenance of all transaction vouchers for review purposes

Common problems and solutions in the use of local payment tools in the Middle East

1. Why was my transaction rejected?

In the Middle East, reasons for payment failure may include:

• Bank restrictions: Banks in some countries have additional risk control measures for transactions with international merchants.
• 3D Secure validation not completed: 3D Secure is mandatory in many Middle Eastern countries (e.g. additional SMS verification for Saudi Pay).
• IP/Geolocation Restrictions: Some payment methods are restricted to local users only (e.g. Mada card requires Saudi IP or local registered company).

✅ prescription:

• Ensure that the website supports local language and currency billing.
• Confirm with the acquirer whether enhancements to the authentication process are required.
• Consider using a proxy server or CDN to optimise the local access experience.

2. How to reduce the chargeback rate?

The higher rejection rate in the Middle East market is mainly due to:

• Legacy of cash-on-delivery habits--Some consumers still tend to pay for goods after they have received them.
• Inadequate dispute resolution mechanisms--Banks in some areas are more inclined to support consumers than merchants.

✅ prescription:
✔️ provides a clear return policy (Arabic + English)
✔️ sends SMS/WhatsApp notification at order confirmation stage
✔️ selects payment methods that support "deferred billing" (e.g. Tabby, Tamara, etc. buy now pay later services)

Country specific regulations and compliance requirements

⚠️ IMPORTANT NOTE: When running an e-commerce business in the UAE that involves subscription-based payments, you must provide a "Free Trial Cancellation Guideline" or face possible fines.

Future Trends: The Rise of Buy Now Pay Later (BNPL)

The Middle East BNPL market is growing at a CAGR of more than 30% and the key players include.

1. Tabby (UAE-led)
2. Tamara (Saudi Arabia's largest BNPL platform)
3. Cashew (Kuwait Emerging Services)

📌 Business Access Recommendation.
- BNPL is more suitable for high unit price goods (electronics, luxury goods)
- Need for specially designed instalment marketing pages
- Note whether the late payment clause is in line with Islamic finance principles

In summary:5 key points for successful Middle East payments expansion

1️⃣Prioritise integration of TOP 3 payment methods (Mada/Fawry/BenefitPay etc.) in target countries
2️⃣ Ensure compliance with religious and cultural norms (e.g. adjusting withholding times during Ramadan)
3️⃣ uses a hybrid settlement model (credit card + e-wallet + cash on delivery)
4️⃣ Invest in a local customer service team (Arabic support is vital)
5️⃣ Continuous monitoring of central bank policy changes (VAT adjustments, new data localisation regulations, etc.)

By pinpointing these points, your business will be able to efficiently reach 60 million digital consumers in the Middle East!