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Middle East on Path to Cashless Economy with Surge in Real-Time and Electronic Payments

The Middle East continues to be the fastest-growing market for real-time payments, according to the 2024 Prime Time for Real-Time report by ACI Worldwide and GlobalData.

With a 33.6 per cent year-over-year growth in 2023, the region’s real-time payment transactions reached 855 million, and projections indicate they will also grow to three billion by 2028.

The implementation of national real-time payment schemes across GCC member states drives this growth, with recent launches in Oman, Kuwait as well as Qatar. With all six GCC member states now operating real-time payment programmes, the Middle East’s transaction value should rise from $230 billion in 2023 to $903 billion by 2028.

Bahrain is one of the most developed payment markets in the Middle East, with real-time payments accounting for almost half of the total payment volume in the country as well as the majority of all electronic payments, the report reveals.

Santhosh Rao, senior VP sales at ACI Worldwide MEASA, commented: “Real-time payments eliminate payment friction, inject greater liquidity into the system, and promote economic growth and financial inclusion. Yet, their full potential can only be realised when banks transcend legacy silo systems.

“With real-time payment schemes now operational in every GCC nation, local banks are at a pivotal juncture where they must harness technological evolution as the catalyst for innovation. The path to innovation lies in modernising and future-proofing their infrastructure, enabling them to fully leverage the potential of real-time payments.”

Cashless shift

The increase in real-time and electronic payments marks the Middle East’s committed shift towards a cashless economy. In 2023, electronic transactions made up over 50 per cent of all transactions in the region and an huge 95 per cent of the total transaction value.

Notably, real-time payments represented 12 per cent of the region’s electronic transactions last year, a number expected to rise to 22 per cent by 2028, surpassing Europe and North America. The ACI report envisions a compelling future for a cashless economy, predicting that cash-based transactions will decrease to just three per cent of the region’s total transaction value by 2028.

Rao also added: “Active collaboration is the cornerstone of a thriving real-time payment ecosystem, fostering an environment where banks must navigate a delicate balance of competition and cooperation with emerging market players.

“The world’s most successful real-time payment schemes, exemplified by India’s achievements, showcase a myriad of real-time payment methods via QR codes, mobile apps, or online accounts, pushing the boundaries of innovative use cases.

“With the Middle East leading the world in real-time payments growth, financial institutions should seize the opportunity to carefully study these successes and extract valuable insights to inspire the launch of their own pioneering real-time payment solutions.”

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