Just eight per cent of current retail payments by volume in Oman are made digitally compared with 42 per cent in the UK and 75 per cent in Sweden it said.

In a report titled 'Doubling Digital Payments in MENA' released on Monday Booz Allen Hamilton recommends that in the face of a slowing global economy central banks adopt a more strategic approach to regulatory policy making in order to realise the full potential of the digital economy in the region.

It said that a modern payment infrastructure has the potential to create new and sustainable revenue streams for commercial banks in the MENA region.

Oman has established a broad digital payments infrastructure notably through its ATM and PoS national switch 'OmanNet' which has helped to drive relatively high penetration of debit cards across the sultanate as well as through its automated clearing house (ACH) implemented in 2006 said Lutfi Zakhour senior vice president at Booz Allen Hamilton MENA and co-author of the report.

He said recent years have brought a wave of modern payments infrastructure and features that Oman can consider to further drive uptake of digital payments and move away from a cash-based economy.

'Oman has strong potential for growth in digital payments particularly due to its strong uptake in debit card payments. The national Payment Systems Law being drafted by the Central Bank of Oman is an important stepping stone to further driving growth in digital payments' Zakhour told Muscat Daily.

He said the ongoing enhancement of Oman's Wage Protection System (WPS) should also serve as a good step towards financial inclusion. 'While WPS is an important starting point to financial inclusion material progress in digital payments can be achieved from modernized regulations and flexible cost-friendly infrastructure that incentivise the ecosystem to effectively serve the unbanked and underbanked providing them with usable digital payment solutions that meet their current pain points.'

The report said MENA countries can double or even triple the rate of adoption of digital payments by creating new payment infrastructure and introducing regulations to promote digital commerce and drive innovation and protect against cyber fraud.

'Decreasing reliance on cash and addressing the growing challenges related to retail payments should be top priorities for central and commercial banks if they are to unlock the benefits derived from the creation of an inclusive digital economy' Zakhour said.

He said that the CBO and Omani banks have made strong strides in the advancement of digital payments in the sultanate.