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FinTech Surge in MENA: 5 Key Enablers Driving Growth in the Industry

The Middle East’s FinTech ecosystem, though relatively young, has experienced remarkable growth since the establishment of its first start-ups in 2015. Today, the MENA region hosts over 800 FinTech startups valued collectively at $15.5 billion, with the majority based in the United Arab Emirates.

A report by MAGNiTT highlighted a staggering 183% year-over-year growth in funding for MENA FinTech startups in 2021, marking the highest annual growth rate in the past five years. Furthermore, predictions from Saudi Arabian technology venture capital indicate the emergence of 45 unicorns worth over $100 billion by 2030.

Let’s explore the five key enablers driving this exponential growth in the MENA FinTech industry.

  1. Government Initiatives

Government reforms and initiatives have played a crucial role in fostering the FinTech ecosystem in the MENA region. Middle Eastern governments are actively promoting privatization, increasing public-private partnerships, and monetizing infrastructure assets to drive financial inclusion. By implementing FinTech-friendly regulations, they support the growth of home-grown startups and attract global players. Regulatory sandboxes across the region have been established to facilitate the adoption of digital financial solutions, further accelerating FinTech growth.

For example, the UAE and Saudi Arabia have been at the forefront, launching initiatives such as National Instant Payments Platforms (IPPs) to digitalize payments and enhance financial inclusion. This supportive regulatory environment has been instrumental in creating a fertile ground for FinTech innovation.

  1. Financial Inclusion

One of the primary drivers of FinTech growth in the Middle East is the urgent need to address financial exclusion. Over 70% of the population in the region does not have access to traditional banking services. FinTech startups have emerged as a solution to bridge this gap, offering innovative financial products and services where traditional banks have struggled.

The launch of instant payment platforms by the UAE and Saudi Arabia’s central banks exemplifies the region’s commitment to enhancing financial inclusion. These platforms aim to streamline and digitalize payments, making financial services more accessible to a broader population.

  1. Demographics

The MENA region boasts a young and tech-savvy population, which has been a significant factor in the growth of the FinTech sector. With over 450 million people, more than half of whom are under 25 years old, the region represents a vast market of potential customers who are eager to adopt new technologies. This youthful demographic is driving demand for digital financial solutions, creating a robust market for FinTech startups.

High mobile penetration rates further support this growth. The Middle East has achieved 100% mobile penetration, providing a solid foundation for FinTech companies to reach a large and receptive audience. As digital natives, this young population is more likely to embrace innovative financial technologies, fuelling the expansion of the FinTech sector in the region.

  1. Investment and Funding

The influx of investment and funding into the MENA FinTech sector has been another critical enabler of growth. In 2021, the region saw a 183% increase in funding for FinTech startups, indicating strong investor confidence in the market’s potential. This surge in investment has provided startups with the necessary capital to scale their operations, develop new products, and expand their reach.

The rise in funding has also led to an increase in the number of financial firms in the region. As of February 2022, the MENA region was home to more than 3,600 financial firms, a 25% increase from the previous year.

  1. Infrastructure Development

The development of robust infrastructure has been fundamental to the success of the FinTech industry in MENA. Governments have invested heavily in building the necessary infrastructure to support digital financial services. This includes high-speed internet connectivity, secure payment gateways, and regulatory frameworks that ensure a safe and efficient financial ecosystem.

For instance, the establishment of digital-only banks and the introduction of blockchain technology for secure transactions are examples of how infrastructure development is driving FinTech growth. The conducive environment for innovation in the region, is attracting both local and international FinTech companies.

As these enablers continue to evolve and strengthen, the MENA region is poised to become a global hub for FinTech innovation, offering exciting opportunities for startups, investors, and consumers. Much like Cedar-IBSi FinTech lab, which has been home to global technology companies who need a “soft-landing” opportunity into MENA and India. Join the FinTech Lab to tap into the Middle East banking technology today.

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The gateway to success: Why businesses shouldn’t underestimate the importance of payment gateways   

Bob Kaufman
By Bob Kaufman CEO of ConnexPay

It can be very easy for businesses to assume that payment gateways come as standard and that one will do the job as well as the next, but nothing could be further from the truth. It shouldn’t be underestimated how important this juncture in the customer’s journey is, with many getting all the way to this point and then abandoning their cart because the process isn’t intuitive enough or, in some cases, downright confusing.

By Bob Kaufman CEO of ConnexPay 

In this article, I’ll explore specifically what payment gateways are and what businesses should be on the lookout for to ensure they are using the best one possible.

What are payment gateways?

Payment gateways are the virtual equivalent of a point-of-sale system, allowing customers to pay for goods and services online from anywhere in the world, using a variety of payment methods. When done right, the end product makes it straightforward and convenient for customers to purchase goods, helping a business to grow its sales figures.

The best payment gateways are flexible and user-friendly, offering a variety of payment methods. They should be easy to integrate with any website and offer strong security features to protect customers’ financial information. When choosing a payment gateway, it is important to consider a business’s specific needs. If a business sells physical goods, it will need a gateway that supports credit cards and debit cards. If it sells digital goods, it may also need a gateway that supports PayPal or other digital wallets. Regardless of whether you sell physical goods or electronic goods, you need to offer multiple payment options.

The experience should be intuitive for the customer 

If a customer in a store needs to wait for an extended period of time because the cashier doesn’t know how the cash register works, there is every chance the store will lose that sale. The intuitiveness of payment gateways is just as important. The interface should be user-friendly and the process of accepting payments should be simple and straightforward.

Equally, the process needs to work smoothly internally. A business’s finance team needs to be able to navigate its payment gateway’s user portal without any hassle to access financial information and customer purchase data. Information on customers’ payment processing fees, chargebacks and transaction are all included in this. A merchant being able to access this data and make meaningful sense of it is dependent on the payment gateway being easy to use, with intuitive navigation.

Actionable reporting and analysis

In addition to a user-friendly experience, another important feature to look for in a payment gateway is comprehensive reporting and analytics capabilities. A good payment gateway will provide a business with a payment management dashboard that gives them easy access to payment data. This data can be used to generate reports and insights that can help a business improve sales and marketing efforts.

For example, a robust payment gateway can use reporting and analytics to track sales and purchases, identify trends, and see which products or services are most popular with customers. A business can also use this data to improve its customer service by identifying areas where it can enhance the checkout process or provide better support. By taking advantage of reporting and analytics, businesses can make better decisions and improve its bottom line.

Better safe than sorry 

Security is an essential aspect of the payment process. Customers need to feel confident that their purchases are safe, and businesses need to protect themselves from fraud, theft, and cyberattacks. As security technology evolves, so do the methods of cybercriminals. Therefore, payment gateways must be modern, sophisticated, and compliant with industry standards. They must be able to mitigate risks, reduce fraud, and accept legitimate transactions while flagging risky ones.

An integrated solution 

Traditional payment systems are often siloed, which means that merchants must use multiple systems to manage their payments. This can be inefficient and time-consuming, and it can also lead to issues with data accuracy. A payment gateway that integrates with other business software can help to solve these problems. By integrating its payment gateway with its accounting software, inventory management system, and CRM, a business can get a single view of all payments. This will save time, improve data accuracy, and make it easier to track financial performance.

Enhancing customer support 

Success depends on a business making sales, and sales rely on customers making payments. For payments to be made as easily and conveniently as possible, a business’s payment gateway needs to be reliable and efficient. If any technical issues or other problems arise, they need to be resolved quickly so that payments can continue to be made to the business without delay.

Effective customer support is essential for ensuring that a payment gateway is always up and running. Businesses need to be able to get help when they need it, quickly and easily. Look for a payment gateway that offers superb customer support, with clear instructions on how to contact support staff.

Making the right choice

Choosing the right payment gateway is an important decision for any business. Each of these factors is as important as the last. By prioritising all of them and seeking out a solution that facilitates them, a business can achieve their online payment goals and grow their business.

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