(MENAFN- Mid-East)
Dubai, UAE - The MENA region is undergoing remarkable digital growth. According to Checkout's 4th annual ecommerce report, The State of Digital Commerce in MENA 2024,the company witnessed a 658% surge in total payments processing volume (TPV) in the region between 2020 and 2023. The YOY increase in TPV 2023 vs 2022 alone, is 78%.
Not only is e-commerce thriving, but there's also a notable increase in the frequency of people spending both their money and time online. Over the past four years, the region has witnessed a 56% surge in the number of individuals who shop online at least once a week
With the rapid adoption of digital platforms across the region, businesses in MENA have shown remarkable ingenuity in responding to evolving consumer demands, from activating digital channels to re-thinking inventory, shipping, logistics, and embracing emerging payment methods.
Retailers are increasingly recognizing that fast, seamless, and secure payments are at the core of ecommerce success. It is no secret that an optimized payment process can significantly reduce cart abandonment rates and enhance customer satisfaction. The opportunity to make huge gains with incremental payments improvements is readily available for those willing to seize it.
However, when operating in this region, it is crucial to understand the local nuances and preferences related to payment methods. Optimizing payment performance ultimately involves a multifaceted approach, argues Remo Giovanni Abbondandolo, General Manager – MENA at Checkout. With that in mind, here are four best practices for ecommerce merchants to excel in serving their customers.
Offer a wide range of payment options to match customer preferences
While product availability is a key factor that influences the choice of an ecommerce retailer, the payment options provided are even more important. If the merchant does not accept the payment methods consumers prefer and have at their disposal, it is most likely that they do not go ahead with the purchase. Retailers must keep up to date with the latest advancements in payments and offer options that match their customers' needs – the more the better.
The last few years has seen a surge in the number of payment methods adopted across the region, and with that, a remarkable shift away from cash on delivery, a method that saw a 66% drop in preference in Kuwait and Saudi Arabia. Meanwhile, even among those who prefer to pay with cash, 68% would pay by card if cash was not an option.
Another interesting trend to watch is the growing popularity of digital wallets. While Apple Pay currently holds a dominant position in MENA, Google Pay and local alternatives like stc pay are swiftly gaining ground. Furthermore, Buy Now, Pay Later (BNPL) solutions such as Tamara and Tabby are also becoming an essential part of the region's ecommerce story, with more than 62% of MENA's online shoppers using a BNPL option at least once last year.
On the other hand, in the Fintech and remittance domain, where customers' expectations for fast and flexible money movement are higher than ever before, there is a significant trend towards adopting advanced payment solutions in an aim to optimize consumer experiences. Account Fund Transfers (AFTs) enable users to participate in a range of financial activities and keep up with the pace of real life. Thanks to AFTs, what may have taken days in the past can now be performed instantly at a fraction of the cost.
Secure your transactions:
According to The State of Digital Commerce in MENA 2024 report, safe and secure checkout is now a priority for 39% of MENA consumers. In contrast, in 2020, survey respondents placed the highest value on speedy delivery. Alarmingly, 33% of shoppers in the region have been a victim of payments fraud at least once. Furthermore, up to 30% of shoppers have said a single falsely declined payment – when a payment is declined despite the payee having sufficient funds in the account, would lead them to shop from a competitor's website. With the cost of customer acquisition for e-commerce merchants having increased, a rise in falsely declined payments adds insult to injury. With 23% of MENA shoppers having experienced a falsely declined payment in recent months, payment security must be top priority, for businesses across the region, for today's customers are less patient, less loyal, and more savvy than before.
With the increasing importance of security, ecommerce merchants must step up their efforts to safeguard their customers' funds and data from cyber threats through advanced technologies AI and machine learning.
Power up your performance through payments:
Payments are much more than just a means for financial gains. They can truly power up the performance of a business, save time and resources through offering automated, analytics, and reporting tools that can contribute to efficiency gains. Digital payments generate vast amounts of transactional data that, when analyzed effectively, provide valuable insights into customer behavior, preferences, and purchasing patterns. By leveraging this data, businesses can tailor their services and offerings to meet individual customer needs more accurately.
Furthermore, machine learning and artificial intelligence allows businesses to understand their customer's shopping patterns, allowing them to predict future purchasing trends and preferences, enabling them to offer relevant promotions, discounts, or product recommendations at the right moment. This personalized approach not only enhances customer satisfaction but also increases the likelihood of repeat purchases and brand loyalty.
Choose the right partner:
To make the most of what the MENA market has to offer, payments need to be handled with utmost care and precision. Thus, working with a regulated payment service provider (PSP) that possesses deep local knowledge and relationships is key. Local acquiring access capabilities substantially reduces cross-border transaction costs, while integrating machine learning solutions help merchants maintain high acceptance rates, minimize costs, and combat online fraud. Selecting the right partner empowers merchants to radically elevate their customer offering and keep transactions secure.
Ultimately, by working with the right payment solutions partner, businesses can drive sustained growth, increase their acceptance, enhance operational resilience, and deliver exceptional payment experiences that resonate with modern consumers.
With half of MENA shoppers expecting to increase their online spending in the next 12 months, Abbondandolo contends that the region's digital economy has never been more robust and resilient. This dynamic market presents an oasis of opportunity to expand reach and boost revenue if merchants chose to power their payments performance.
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