The Middle East and Africa online payment gateway market is anticipated to witness a significant growth rate of more than 28% during the period of 2019–2028. Payment Gateway is a technology used by merchants to accept payments through debit and credit cards and online purchases from customers. For decades, both regions have remained majorly dependent on cash. Changing preferences of the people towards online transaction systems, rising demand for m-wallet, rising internet penetration coupled with the growing youth population, growing disposable income of people, and increasing government initiatives in favor of cashless transactions, are some of the key drivers of the MEA online payment gateway market. Moreover, the recent COVID-19 outbreak has accelerated the adoption of digital payment among the people in the region which has facilitated the online payment gateway market growth. However, the lack of a regulatory framework for online payment gateways, the absence of payment security protocols, and increasing cyber-attacks are some of the key restraints of the online payment gateway market in the region.
Hosted payment gateway segment is dominating the market
Based on the payment gateway type, the online payment gateway market is segmented into hosted and non-hosted. Hosted payment gateway is dominating the MEA online payment gateway market in 2021. Hosted payment gateway is a third-party checkout system that redirects the user to another page of the payment service provider. Hosted payment gateway holds the majority of the share on account of several benefits associated with it. In hosted payment gateway, the payment service provider is responsible for the entire transaction process and provides transaction security and data protection as hosted systems are compliant with PCI (Payment Card Industry) and DSS (Data Security System). This is an important visual cue to assure customers that they are not being scammed into giving away their credit card information. Furthermore, hosted payment gateways are simple to set up and maintenance-free as payment service providers control the whole process. On the other hand, the non-hosted payment segment is anticipated to grow significantly in the upcoming years as various merchants prefer to have full control over the checkout process. The non-hosted systems can be integrated with the billing solutions with the help of APIs, which helps to better track customer data that merchants can use in future marketing efforts.
A lot of Potential for a payment gateway is expected in South Africa
The regional payments landscape is changing rapidly and South Africa is expected to face a period of unprecedented change over the forthcoming years. According to the RationalStat Analysis 2021, around one-fourth of South Africans have bank accounts however, only 26% of them do more than 3 transactions in a month. According to the Payment Association of South Africa (PASA), cash transactions are still dominating the market. Cash usage continues to grow in South Africa at a rate of 6-10% per annum, reflecting the enormous potential for online transactions.
Moreover, it is anticipated that in Turkey the online payment gateway market is growing rapidly in recent years. According to Paymentwall Inc. – a Turkey-based fintech company, the card is a dominant payment method while shopping online in Turkey. A total of 64% of transactions are made online and a debit card is preferred over a credit card, with 1.63 debit cards per capita compared with 0.77 credit cards per capita.
UAE and Saudi Arabia are also witnessing rapid changes in payment methods. According to the RationalStat Analysis, 80-90% of people are still dependent on cash for transactions in the Middle East. In UAE digital payment transactions increased by 9% from 2014 to 2019. In 2021, UAE is dominating the market due to the rising initiatives by the government for digitization and e-transactions. Moreover, Saudi Arabia has observed a planetary growth of around 70% in card payments during 2019-2020.
Market structure and competition landscape
The Middle East and Africa online payment gateway market consists of a number of players that contribute significantly to the market growth. Some of the players operating in the market are ACI Worldwide Inc., PayPal Holdings Inc., Paymentwall Inc., CashU Services, Innovate 1 Pay Ltd., Payfast (Pty) Ltd., Adyen Australia Pty Ltd., Worldpay (Fidelity National Information Services, Inc.), Fiserv Inc., Telr Pte Ltd., Payfort/Amazon Payment Services, Checkout.com, The Direct Pay Online Group, and Vapulus Inc. among others. These players adopt various strategies such as mergers and acquisitions, product launches, and partnerships in order to reinforce their market share and gain a competitive edge over other competitors in the market. Mergers and acquisitions, partnerships and collaborations, and product launches are some of the strategies followed by industry players. Some of the key developments in the Middle East and Africa online payment market include,
- In January 2022, Noon e-commerce company launched noon payments – an online payment gateway, to help small and medium businesses in Egypt by providing them with payment solutions.
- In August 2021, Bahrain Financing Company merged with Finablr resulting in the formation of WizzFinancial. WizzFinancial (Prism Group) will operate as a fintech company and cater to a broad range of customers in the region. This merger was aimed to create a regional powerhouse with licenses to operate in over 30 countries.
- In April 2021, Mastercard and Saudi Fintech business Geidea formed a strategic partnership agreement to accept MasterCard payment for tap-on phone solutions in Saudi Arabia. The reason behind the merger was to enable businesses to use smartphones as payment acceptance devices.
- In March 2021, Fiserv. Inc. announced the acquisition of Pineapple Payments. This was aimed to provide better focused and innovative solutions to the customers.
- In December 2020, Amazon Payment Services was launched in the Middle East and North Africa to grow the business of cashless transactions.
Key Market Segmentation
RationalStat has segmented the Middle East and Africa online payment gateway market on the basis of payment gateway type, organization size, end user, and countries:
- By Payment Gateway Type
- By Organization Size
- Micro and Small Enterprises
- Medium Enterprises
- Large Enterprises
- By End User
- Retail Merchants
- Travel Agencies
- Others (Media and Entertainment)
- By Countries
- Saudi Arabia
- South Africa
- Rest of the Middle East and Africa
RationalStat has developed a state-of-the-art research methodology to crunch numbers and provide the best possible real-time insights to clients. We combine a varied range of industry experience, data analytics, and experts’ viewpoint to create a research methodology for market sizing and forecasting.
RationalStat combines a mix of secondary sources as well as primary research to assess the market size and develop a forecast. Key steps involved in accurately deriving the market numbers are:
- Defining the problem by understanding the type of market and data required by the client.
- Data gathering and collection through relevant paid databases, publicly available sources, company reports, annual reports, surveys, and interviews.
- Formulating a hypothesis to create market numbers, forecast, influencing factors, and their relevance.
- Evaluating and analyzing the data by referring to data sources utilized and leveraged.
- Validating, interpreting, and finalizing the data by combining the details gathered from primary and secondary sources with the help of experienced analysts.
- Annual reports, company filings, investor presentations, product catalogs, company documents, and industry associations such as the Payment Association of South Africa (PASA).
- Industry and market-related documents available in the public domain
- Paid database including Bloomberg, Factiva, S&P Capital IQ, FactSet, Refinitiv Eikon, ICIS, EUWID, and Thomson Reuters, among others
- Whitepapers, research papers, and industry blogs
Why Buy this Report?
The report is intended for payment gateway service providers, e-commerce merchants, government organizations, market educational organizations, regulatory agencies, and market research firms, among others. The report provides an in-depth analysis of market size, consumption pattern, ongoing market trends and challenges, and future market opportunities. The report will serve as a source for a 360-degree analysis of the market thoroughly delivering insights to clients to find the right answers to their business questions.