Payments in the Middle East and Africa: Top eCommerce Methods and Providers

eCommerce Payments in the Middle East and Africa: Key Insights

• Credit Cards Dominate: In 2023, credit cards were the top payment type in eCommerce across the MEA, accounting for 24% of all regional online retail spend.

• Digital Wallets Ascend: 23% of all eCommerce payments came from digital wallets in 2023, but this payment type is expected to lead by 2027, accounting for 34% of all regional online spend.

• The UAE and Saudi Arabia: Visa and Mastercard are the top providers in both, with acceptance rates around 95%. A digital wallet ranks among the top five in the UAE, but not in Saudi Arabia.

• South Africa and Nigeria: Visa and Mastercard lead eCommerce payments in both, with acceptance rates higher in South Africa. In Nigeria, no digital wallet ranks in the top five, unlike South Africa.

Cards, cash, digital wallets – online shoppers today can take their pick of payment options. Yet cards dominate the payment arena in several markets, including the Middle East and Africa (MEA), Latin America, and the U.S.

However, data also shows change looming on the horizon: digital wallet usage is expected to rise significantly in the MEA.

We discuss the top eCommerce payment types in the MEA region in 2023, and how the dynamics may shift in the coming years. Next, we assess the top payment providers in four representative regional markets – the UAE, Saudi Arabia, South Africa, and Nigeria.

eCommerce Payments in the MEA: Credit Cards Lead But Digital Wallets Are Rising

Data from The Global Payments Report shows that, in the Middle East and Africa, credit cards usage is currently the highest in eCommerce payments.

But the tide is about to shift, with digital wallets emerging as the fastest-growing payment method, expected to overtake credit cards by 2027. This regional trend, in fact, mirrors the global rise of digital wallets.

In the Middle East and Africa:

1. Credit cards are the top payment method in 2023, making up for nearly a quarter of all regional online spend. But their share is expected to shrink to 18% by 2027.

2. Digital wallets rank second in 2023, at 23%. Forecast to surpass credit cards, eWallets are anticipated to account for over a third (34%) of all eCommerce payments by 2027.

3. A2A (account to account payment), or bank transfer, is the third most used payment type, at 18%. Its usage is expected to increase by three percentage points.

4. Debit cards are similarly used, at 18%. But their share in total eCommerce spend is expected to decline by two percentage points.

5. Cash on delivery accounts for 9% of eCommerce payments in 2023. Its share is also likely to diminish to 5% by 2027. Digital adoption is slated to strengthen, which may decrease the reliance on cash.

6. Prepaid cards and BNPL (buy now, pay later) have much lower shares of 2-3%, and their usage is not expected to grow notably between 2023 and 2027.

The MEA region presents great opportunities for growth in eCommerce as well as digital payment adoption:

• Middle Eastern countries, especially those in the Gulf Cooperation Council like the UAE and Saudi Arabia, have strong economies as well as high internet penetration, with around 92% of the population using mobile internet. Such factors help improve digital payment adoption.

• In African countries like Nigeria, less than half the population has an account with a financial institution. The share of individuals owning a credit card is also very low, at 1.6%, per a 2024 World Bank Survey. But the population is young and aware of digital solutions. As digitization of businesses increases, chances are that the turn to digital payments will accelerate.

Top eCommerce Payment Providers in the MEA: Visa and Mastercard Lead

Which payment providers are leading the ranks in countries across the Middle East and Africa in 2023? We use ECDB data for the UAE, Saudi Arabia, South Africa, and Nigeria to analyze the current state of eCommerce payments in the region.

1. The United Arab Emirates

In the UAE, the top eCommerce payment providers in 2023 were:

• Visa and Mastercard rank first and second, with acceptance rates of around 96%.

• Cash on delivery is still highly used in the UAE, accepted by 70% of eCommerce merchants. The persistence of cash suggests that it remains a vital method for consumers who may prefer it over other options.

• American Express is accepted by half of all online retailers surveyed, cementing the central position of cards in the UAE eCommerce market.

• PayPal, a renowned digital wallet, has an acceptance rate of 38% and is the fifth most used payment provider.

Payment habits in the UAE changed during the pandemic. A 2022 report by Visa reported that as much as 41% of surveyed consumers expected to shift to contactless, digital payments. With mobile internet penetration in the UAE at over 96%, the conditions are highly conducive to further growth of digital payment.

2. Saudi Arabia

In 2023, the top eCommerce payment providers in Saudi Arabia were:

• Visa and Mastercard take the first and second rank, with acceptance rates between 94-96%.

• Mada ranks third, with 75%. It is a national debit card promoted as an alternative to cash, with aims to increase speed, security, and eCommerce spending. It can be linked to digital wallets like Google Pay.

• Cash on delivery ranks fourth, with 56%.

• American Express is accepted by 37% of eCommerce stores, making it the fifth most used provider.

Cash on delivery ranks high, but its usage in online shopping has seen a consistent decrease in Saudi Arabia, per Statista. Moreover, nine in ten people in the country said they have used a digital payment method. With the government focus on improving digitalization, the future appears bright for digital payments in Saudi Arabia.

3. South Africa

In South Africa, the top eCommerce payment providers in 2023 were:

• Visa and Mastercard are at the top, with acceptance rates of 91% each.

• Bank transfer and cash in advance stand third, accepted by 55% of eCommerce stores.

• Mobicred ranks fourth, with 39%. This is a revolving digital credit facility. It works on phones without needing to be linked to an existing bank account. Users can take out digital installments and make online purchases with participating eCommerce retailers.

• Ozow ranks fifth, with an acceptance rate of 31%. This national digital wallet can be connected to a bank account and allows for cardless and QR code payments.

The South African eCommerce market is growing at a CAGR (2024-2028) of over 9%. The number of eCommerce users is expected to nearly double between 2025 and 2029, per Statista. Moreover, significant shares of consumers have already used mobile payment – including PayPal (78%), Mastercard Click to Pay (40%), and Ozow (34%), indicating favorable conditions for digital payments.

4. Nigeria

In 2023, the top payment providers in Nigeria were:

• Visa and Mastercard rank in the top two in Nigeria, with acceptance rates between 81-83%.

• Bank transfer and cash in advance stand third, with a high acceptance of 72%.

• Cash on delivery is accepted by 59% of stores, underlining the central role that cash still plays in the Nigerian market. For online stores, accepting cash means reaching consumers who are unbanked, off the digital payment grid, or who have trouble trusting online payment methods.

• Verve Card ranks fifth and is accepted by 45% of online stores. Under this national card system, users can get a debit or prepaid card, without needing to link it to an existing bank account.

Compared to other countries discussed, Nigeria is the fastest-growing eCommerce market, with a CAGR (2024-2028) of over 12%. Internet penetration is rising and is expected to cover nearly half the population by 2027. This may bolster the rise of digital wallets such as JumiaPay by Jumia, a marketplace with a large consumer base in the country. According to PCMI, the penetration rate of digital wallets in Nigerian eCommerce will double between 2023 and 2027.

eCommerce Payments in the Middle East & Africa: Closing Remarks

In the Middle East and Africa, countries are on different growth paths in terms of economy, internet penetration, and banking coverage. Such factors play a key role in advancing modern payments, like digital wallets, over cash.

A bias towards cash still holds in point-of-sale retail across MEA, per The Global Payments Report. But in eCommerce payments, cards predominate. Visa and Mastercard are the leading payment providers in the UAE, Saudi Arabia, South Africa, and Nigeria. Some national card schemes also feature among the top payment providers.

Consumer expectations are shifting, however. The Covid-19 pandemic and the rise of fintech boosted the acceptance of digital transactions. Mobile banking is also an accelerating regional trend. These aspects encourage the transition to digital wallets for eCommerce payments in the future.

Sources: The Global Payments Report 2024; Visa; Statista: 1, 2, 3, 4, 5; Saudi Payments Report; PCMI