J.K. Khalil, Cluster General Manager of MENA East at Mastercard, sheds light on the surging demand for emerging payment methods among consumers and how Mastercard is actively contributing to the evolving payment landscape.
The future of payments, driven by advanced technology, is already unfolding, with consumers worldwide embracing innovative ways to shop, transact, and manage their finances. Mastercard’s New Payments Index 2022 reveals significant insights, placing digital solutions at the forefront.
In the MENA region, the United Arab Emirates stands out as a notable example. The Mastercard study underscores that U.A.E. consumers are not just aware of emerging payment methods; they are actively incorporating them into their daily lives. A staggering 88% of consumers in the region have used at least one emerging payment method in the last year. Among these, 39% utilized smartphone mobile wallets, 29% opted for buy now, pay later (BNPL) services, 20% engaged with cryptocurrency, and 18% utilized payment-enabled wearable tech devices. Consumers are diversifying their purchasing methods, including transactions through voice assistants and social media apps.
J.K. Khalil attributes the rise of digital payments to several factors. He notes, “People are getting much more comfortable with digital technology and are realizing how secure it has become. Many also now prefer the contactless economy that we all had to adapt to during the pandemic.”
Examining the trends, Khalil highlights the surge in remittances facilitated by technology, driven by the physical distancing necessitated by the pandemic. Additionally, younger demographics, particularly Generation Z and Millennials, are influencing the landscape, seeking finance solutions aligned with their digital lives, resulting in the growing popularity of cryptocurrencies, non-fungible tokens (NFTs), and involvement in the metaverse.
While digital payment methods offer convenience and speed, the emerging ecosystem is not immune to challenges. Despite enhanced security in online transactions, cybercrime is on the rise, growing four times faster than e-commerce. Khalil emphasizes the vulnerability of smaller digital businesses to cyber threats, contrasting with larger corporations that are more prepared.
Mastercard, committed to supporting SMEs in mitigating risks, aims to include one billion people and 25 million SMEs in the digital economy by 2025. In this pursuit, the company collaborates with businesses, providing resources free of charge to those at the highest risk of cyberattacks.
Mastercard’s evolution from a credit card-centric company to a multi-rail business reflects its multifaceted approach. Khalil notes, “There isn’t really a part of any economy or digital economy for that matter that we do not touch.”
Mastercard’s strategic partnerships in the region, from investments in Hyperpay in Saudi Arabia to collaborations with NymCard in the U.A.E. and fintech engagements like Inspire, exemplify its commitment to connecting the payments matrix and propelling the digital economy forward.