Online transactions increased in Arab countries by 22 per cent in 2016, a growth that was led by Saudi Arabia with 27 percent, followed by Egypt with 22 percent and UAE with 21 percent.
Events, entertainment, and exhibitions were the fastest growing payments sector with annual 33 percent growth in 2016 in comparison to 2015, according to a survey conducted by the Amazon-owned company, Payfort.
Payfort's report "State of Payments in the Arab World” revealed that a total of $30.4 billion of goods and services were purchased online in seven countries last year. They are Saudi Arabia, Egypt, UAE, Jordan, Kuwait, Lebanon, and Qatar.
In terms of dollar value and growth in value, UAE was on top with $12.4 billion of transactions, a 21 percent annual growth in total amount paid online, followed by Saudi Arabia with $8.3 billion of transactions and 27 percent growth, and Egypt with $6.2 billion of transactions and 22 percent growth.
According to the report, Saudi Arabia was the fastest growing country in the airlines and travel sectors with a 21 percent growth in airline payment and 36 percent growth in travel and tourism.
The report also indicated that Egypt led the region in the growth of online shopping with a 32 percent increase in volume of payments, while UAE was the fastest growing country in the entertainment and events sector, showing 36 percent annual growth.
Cash-on-delivery remains the most popular payment option in Egypt with 70 percent usage and Lebanon with 60 percent usage. The report attributes that security remains a top concern among online shoppers, with more than 50 percent of cash-on-delivery customers surveyed in all countries stating that they would only switch to online payments if they were convinced that the payment method was secure.
Marketing Director of Payfort Nardeen Abdullah stated that despite the enormous growth in the region’s online payments and usage of eCommerce, security fears remain prevalent among consumers.
“Although we now see a greater willingness to make online transactions, consumers are increasingly aware of the risks of fraud and other cyber crimes. They are also increasingly demanding, seeking faster and easier checkouts,” Abdullah added.
The report also highlighted the growing interest in mobile payments, with 50 percent of respondents in six out of seven countries showing an interest in mobile payment apps.
Consumer usage of mobile wallets is widespread, with 33 percent of surveyed people in Saudi Arabia stated they use mobile wallets, compared to 27 percent in Egypt and Lebanon, 25 percent in Jordan, 23 percent in the UAE and 17 percent in Qatar.
Managing Director of Payfort Omar Soudodi explained that 2017 edition of the report marks the most dramatic change to the report since the project was launched in 2014.
"This year we put the control in the hands of our readers, providing them with interactive tools that allow them to easily adapt the data sets for their own needs and business decision making,” reported Soudoudi, adding that this year's report provides a wealth of information on both consumer behavior online and practical advice for merchants who want to improve performance and meet their customers’ rising expectations.