For the second year in a row, the Middle East has been the fastest-growing market for instant payments. There were 855 million transactions in the region in 2023, a 33% increase year-over-year.
New instant payments programs launched in Oman, Qatar, and Kuwait last year, and increasing acceptance is expected to drive the Middle East instant payments market up by 28.8% to $3 billion in 2028, according to ACI Worldwide. One of the main reasons for this substantial growth is the strong support from the region’s governments.
“First, the UAE enacted a Financial Infrastructure Transformation Program in February 2023 to accelerate the digital transformation of financial services,” said Sophia Gonzalez, Debit Payments Analyst at Javelin Strategy & Research. “Second, Vision 2030 set a target for the Saudi government’s digital payments participation to hit 70%. Third, Egypt enacted a strategy called Digital Egypt. Finally, Bahrain made a full commitment to becoming a fintech hub.”
Committed to Instant Payments
As a result of that commitment, Bahrain is now the most developed instant payments market in the region. Real-time payments account for 50% of the country’s payment volume and nearly all of its electronic payments. Instant payments in Bahrain are expected to reach 77% of transactions by 2028.
Saudi Arabia also demonstrated tremendous growth, with 430 million instant payments transactions in 2023. For years, the region has pushed for electronic payments adoption, and instant payments volume in Saudi Arabia is expected to rise 24.6% by 2028.
Though the United Arab Emirates introduced its Immediate Payment Instruction platform in 2019, the platform didn’t catch on. The UAE central bank launched a new payments platform called Aani in October 2023, but it has also been slow to gain traction. Instant payments only account for 1.5% of payments volume in the country.
Nearly Cashless
Instant payments have fueled shifts in payments infrastructures all over the world, but they have especially caught on in Brazil and India. Though both those countries have government backing, instant payments were rapidly adopted because Brazil and India were previously cash-based economies.
While the Middle East is leading instant payments growth, a significant portion of the region’s residents are still unbanked. For that reason, instant payments are expected to continue to rise until the region is nearly cashless. By 2028, cash-based payments are predicted to be just 3% of payments volume in the Middle East.
