The UAE and Saudi Arabia are witnessing a significant shift toward digital payments as consumers increasingly adopt modern shopping trends, according to the latest analysis from Checkout.com. The data highlights a marked rise in online shoppers, the growing popularity of Buy Now, Pay Later (BNPL) options, and increased consumer confidence in sectors such as travel.
The Middle East and North Africa (MENA) region has been progressively embracing digital commerce, with Checkout.com reporting a 56% rise in weekly e-commerce activity since 2020. This latest report reveals that digital payments are becoming an integral part of daily life in the region, especially in the UAE and Saudi Arabia.
Rise in Unique Online Shoppers and Cards Usage
Between July and August 2024, the number of unique cards used for online purchases in the UAE and Saudi Arabia surged by 26% year-on-year. This increase suggests a growing number of consumers are turning to online platforms for their purchases, further accelerating the decline of cash as the region’s preferred payment method.
According to the report, the preference for cash dropped to as low as 10% among consumers in both the UAE and Saudi Arabia, signaling a clear shift toward digital alternatives.
BNPL Adoption Skyrockets
One of the standout trends identified in the report is the rapid adoption of BNPL services. Between July and August 2024, the use of BNPL payments in the UAE and Saudi Arabia soared by 200%, compared to the same period in 2023. This trend was especially evident among merchants such as Tamara and Tabby, who have seen a significant rise in transactions processed through Checkout.com.
The increasing demand for flexible payment options is reshaping the retail landscape, with merchants recognizing the importance of offering BNPL services to stay competitive.
Growth in the Travel Sector
The digital payments landscape has also seen substantial growth in the travel industry. Online payment transactions in the travel sector across the UAE and Saudi Arabia grew by 48% between July and August 2024, compared to the same period last year. This increase highlights growing consumer confidence in the security, speed, and convenience of digital payment solutions, particularly for global transactions in the travel sector, where competition and thin margins are a constant challenge.
Opportunities for Merchants
Remo Giovanni Abbondandolo, General Manager of MENA at Checkout.com, emphasized the growing potential for merchants to capitalize on these trends. “As economies in the region continue to diversify and digitize, these insights underscore the immense opportunity now available to merchants to leverage payment innovations to drive better performance and enhance their revenue,” Abbondandolo said.
With the digital payments ecosystem in the region maturing rapidly, the rise of BNPL and the increasing reliance on e-commerce signal a shift that merchants can no longer ignore.
Source: checkout.com and Arabia Business
