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Insights Middle East & Africa Paytech

Security Remains at the Heart of Innovation Finds Amazon Payment Services in Payments Trends Report

Customer loyalty is key for the long-term survival of any company. What ensures good customer loyalty is an experience they enjoy – in the Middle East and Africa (MEA) region, this means creating a fast, seamless transaction. Amazon Payment Services’ latest research supports this as it reveals that 81 per cent of businesses believe revenues would increase if transactions were faster.

This is just one trend of many revealed in the Leading Trends in Digital Payments: Driving the Real-Time Economy in MENA report. Based on a study designed and conducted by Davies Hickman Partners and sponsored by Amazon Payment Services, this report comes as part of the re:Imagine Payments thought leadership forum, designed to help inform merchants and those interested in digital payments.

The MENA region remains one of the most dynamic and fast-growing in the world, with ambitious government strategies and visions. Some of these include the Saudi Vision 2030 and We The UAE 2031. In MENA, as elsewhere, customers are making more digital payments. Less cash is used in-store and online retail sales are rising. Technology continues to revolutionise payment processes and the Amazon Payments Services report set out to reveal how.

Peter George, managing director of Amazon Payment Services in MENA
Peter George, managing director of Amazon Payment Services in MENA

Based on quantitative data and insights from over 100 executives responsible for payments in businesses across Saudi Arabia, the United Arab Emirates (UAE), and Egypt, the report outlines leading payment trends, indicating their relevance to businesses in the region. In-depth interviews with these executives in MENA provided insights, perceptions of the industry, and predictions.

“The region’s own digital trajectory is rapidly moving forward,” said Peter George, managing director of Amazon Payment Services in MENA. “Our commitment to businesses goes beyond delivering robust and innovative payment solutions. It extends to helping businesses understand how they can effectively embrace transformation within payments.

“This report outlines leading trends and valuable industry findings shared directly from inspiring leaders across today’s regional landscape, setting merchants up for success to enhance their customer experience and achieve sustainable business growth.”

Identified trends 

The top five predicted drivers of change, as ranked by the executives, are the introduction of bank accounts linked to national identity, the growing use of digital wallets, better payment experiences, payment fraud reduction, and improved biometric authentication.

The report also highlights four leading trends expected to play a major role in business and customer payment decisions over the next five years.

Speed is key

Digital payment enhancements are taking on critical importance for businesses in the region: 81 per cent of businesses surveyed in the report said if payment transactions were faster, revenues would increase. One reason for this is that customers are often busy and time-poor. Therefore, if a transaction takes too long, they may stop short of completing it.

Similarly, 83 per cent of executives said that fast checkout and payment completion are important factors in building customer loyalty. Almost a third of businesses expect to grow more than 20 per cent in 2024. Consequently, digital payment innovations take on significance for sustainable success.

More ways to pay

One of the identified trends is the rise of omni-pay advances. Governments and fintech companies drive these initiatives, offering diverse payment options. Examples include open banking, stablecoins, and central bank digital currency, aligning with the real-time economy’s demand for immediate services.

Fintech innovation and payment fragmentation—where a business is able to offer multiple payment choices across different points of sale and media—were rated among the top 10 payment drivers of change for the next five years by the executives surveyed. Overall, 89 per cent of the executives said they engage with fintechs to improve payments for their business.

Understanding consumer desires

Consumers want immediate access to goods and services, often facilitated by digital technology. This real-time economy was rated the top consumer driver of change by the executives in the report. In fact, 64 per cent of whom said it would be very important over the next two years.

One key building block is the growing use of digital wallets, which 87 per cent of the executives surveyed said were becoming the preferred way for customers to pay. Improving payment experiences through social commerce is another growing priority: 59 per cent of executives would like to advance social commerce. Meanwhile, 54 per cent say that their customers would likely use livestreaming to buy products and services promoted by social media influencers.

Security is at innovation’s core 

The executives in the report were clear that new ways of paying will not be adopted unless payment security is in place. Security centricity is the third leading trend identified in the report. Businesses need robust security measures to earn customer trust, with biometric authentication and data privacy playing pivotal roles.

For 68 per cent of businesses surveyed, earning customer trust was the most important reason to deploy new payment methods. Regulators and payment providers need to help businesses feel confident about the security guardrails when introducing new payment methods.

Adapting to artificial intelligence (AI)

Another trend identified in the report concerns innovation driven by AI adoption in payments, as new technologies transform payment efficiency and personalization.

Recent developments, including the emergence of generative AI, are amplifying the impact of this trend. According to the report, 52 per cent of the executives surveyed expected significant changes in payment methods within as little as two years. Fifty-three per cent said that immersive shopping experiences with augmented reality technology would be very important.

Along with these leading trends, the report also presents five building blocks for payments strategies:

  • trust
  • choice
  • experience
  • behavioural change
  • sustainability

Together, these topics illuminate the complex and evolving landscape of digital payments in MENA and the imperative for businesses to continue learning to adapt, innovate, and grow.

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