Middle East Payment Habits: Consumer Trends and Behavioural Analysis

Payment habits and consumer behaviour in the Middle East show a unique diversity, influenced by a combination of religious culture, economic structure and technological development. The following is an in-depth analysis of the region's payment ecology from six dimensions:

I. Religious culture-driven payment characteristics

  1. Islamic Finance Compliance:
  • Strict prohibition of "riba" (interest) trading, giving rise to Sharia-compliant financial products
  • Murabaha (cost-plus financing) and Sukuk (Islamic bonds) dominate the landscape
  • Islamic finance assets reach $4 trillion by 2022, growing at 14% annually

  1. Cash dependent on tradition:
  • Saudi Arabia's share of cash transactions remains at 52% (2023 central bank data)
  • UAE cheque usage three times higher than global average
  • "Hawala" informal remittance system flows over $30 billion annually

II. The explosive growth of digital payments

  1. Changes in e-wallet penetration:
    |Country |2020 Penetration |2023 Penetration |Representative products|
    |—|—|—|—|
    |UAE|28% |61% |Careem Pay|
    |Saudi Arabia |19% |54% |STC Pay|
    |Egypt |6% |33% |Fawry|

  2. BNPL (Buy Now Pay Later) Rising:

  • Tabby Becomes First Unicorn, Surpasses 30,000 Merchant Partners
  • Tamara achieves 400% annual growth rate in Saudi Arabia

III. Specificity of cross-border payments

  1. Demand for remittances from foreign workers:

IV. Specificity of cross-border payments (continued)

  1. Demand for remittances from foreign workers::

    • Middle East expat population share exceeds 40% (GCC country average), remittances scale by 2023$120 billion.(World Bank data)
    • Traditional pain points: bank fees as high as 10%-15%, arrival cycle of 3-5 days
    • Emerging Solutions:
      • Fintech like UAE'sAl Ansari ExchangeLaunches instant delivery service with rates squeezed to below 1%
      • Blockchain app: Ripple pilots cross-border clearing with Saudi Arabia's central bank

  2. E-commerce driven cross-border payment innovation::

    • Local platforms such as Noon and Namshi support "localised settlement" (automatic currency conversion + no cross-border fees)
    • "Cash on delivery" still accounts for 301 TP3T, but digital prepaid share has risen from 181 TP3T to 451 TP3T in two years (RedSeer Consulting data)

V. The critical role of government policy and infrastructure

  1. National level digitalisation drive::
    • Saudi Vision 2030 Programme: Increase in non-cash transaction share target from 36% (2020) to 70% (2025)
    • UAE "paperless strategy": Launch of the Unified Payments Interface UPI in 2022, connecting all banks and e-wallets
  2. Regulatory Sandbox Proving Ground
    Bahrain's central bank has issued 15 digital payments licences, allowing testing of cryptocurrency settlements

VI. Segmentation of population behavioural differences

group identity Payment preferences typical case
Generation Z (35% of population) BNPL usage rate 62% Tabby buys electronics in instalments
high net worth individual (HNWI) Metallic credit cards/virtual cards Emirates NBD's "Dubai Unlimited Card"
blue-collar foreign workers Offline Agent Point Cash Recharge   Pakistani workers send money home via Exchange House

[Early warning of future trends]

  1. The explosion of biometric payments:
    Abu Dhabi Islamic Bank has piloted 'vein-recognition' ATM withdrawals with an error rate of just 0.01%
  2. Super App Aggregator:
    Kuwait's QPay integrates utilities, bus cards, online shopping in a single portal
    3.Cryptocurrency Trial Compliance:
    Dubai releases VAST framework, requires exchanges to meet $1m capital reserve