DATA SECURITY PAYMENTS SOLUTIONS
The Middle East payments matrix Technological innovation in the financial services industry is the cornerstone of fintech development and will continue to drive disruptive business models in the payments space globally
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igital payments are gaining popularity as cash usage wanes around the world. Though debit/credit card payments still dominate in several countries across the Middle East region, digital products like payment apps, digital wallets, buy now pay later (BNPL) and account-to-account payments are gaining traction. The digital payments space had been gaining significant traction in the region before the shift to the “digital-
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first” approach that gained prominence after the outbreak of COVID-19 two years ago. However, the onset of the pandemic saw the volume of digital payments soaring to record highs and generating as much as 10 years’ worth of growth in just 24 months. Globally, payments remain among the best-performing financial services product segments but unfortunately for banks - traditionally the main providers of payments services—this momentum is no longer extending to most of them
Banking and Finance news in the MEA market
especially under the current operating conditions. “Fintech firms are the primary innovators in the payments space and banks are struggling to keep pace,” said EY. For financial institutions in the region to maintain a competitive edge in the payment ecosystem, success will depend on how they thoughtfully assess capabilities, determine the role of payments in market strategies and appropriately align payments operations to achieve the required performance improvements. The surge in global payments volumes is also being driven by the growth in e-commerce as the pandemic is pushing more shoppers online and changing customer preferences and demands among the young tech-savvy customer base. “Leading e-commerce and technology companies have set a high bar for the financial services industry to create better experiences and simple, seamless integrations that can make traditional banking, digital payments, and other related activities easier to accomplish,” said Deloitte. Th e p a y m e nts s e cto r i s a l s o benefiting from the ongoing shift towards subscription-based billing—a boon for the region’s payments-as-aservice (PaaS) and software-as-a-service (SaaS) solution providers. McKinsey said that open-source software, serverless architecture, and SaaS have become must-haves for technology players and traditional financial institutions launching new fintech businesses. Meanwhile, the ongoing digital transformation initiatives that are being implemented by regional governments are also driving the growth in the payments industry as banks are leveraging these adoption rates to advance their digital transformation strategies.
Innovation in payments Technological innovation in the financial services sector is the cornerstone of fintech development and will continue
