The Middle East is entering a transformative era in digital payments, driven by consumer demand and government efforts to make finance more accessible and inclusive. According to ACI Worldwide’s 2024 Prime Time for Real-Time report, the region is the fastest-growing real-time payments market globally, with a remarkable YoY growth of 33.6% in 2023. The Middle East recorded 855 million real-time payment transactions in 2023, projected to hit 3.0 billion by 2028 — a 2023-2028 CAGR of 28.8%.
The Middle East has experienced strong economic growth, increasingly fueled by diversification into sectors beyond oil, including finance, technology, and infrastructure. ACI’s 2024 Real-Time Payments: Economic Impact and Financial Inclusion report reveals that real-time payments are forecast to boost global GDP by US$285.8 billion and create more than 167 million new bank account holders by 2028. In the Middle East, Saudi Arabia’s GDP is expected to get a boost of US$1.1 billion by 2028, while Bahrain is forecast to have additional GDP growth of US$677.6 million over the same time frame.
Saudi Arabia and the UAE are leading the charge in economic transformation with strategic initiatives like Saudi Vision 2030 and the UAE’s National Digital Transformation Strategy to enhance financial markets and drive the adoption of digital payment systems. Qatar and Kuwait may be at the beginning of their real-time journeys, but they have clear growth roadmaps and are expected to reap the economic and financial inclusion benefits from real-time payments soon.
Despite being a relatively new entrant to the real-time payments market, Egypt’s growth potential is striking. According to the Cebr research, GDP contributions from real-time payments are expected to rise from US$164.7 million in 2023 to US$5.2 billion by 2028. Overall, the region is positioning itself as an emerging global financial hub poised for sustainable growth by bolstering economic resilience and fostering a competitive financial environment.
The future of finance is inclusion
As real-time payment systems become pervasive, they are improving the lives of citizens who previously had no access to the formal banking system. ACI Worldwide’s 2024 Real-Time Payments: Economic Impact and Financial Inclusion report shows a positive empirical link between real-time payments and financial inclusion.
The UAE has made tremendous progress in real-time payment adoption in recent years. Its central bank established Al Etihad Payments (AEP), a subsidiary that operates its real-time payments scheme. AEP’s mission is to support financial stability, promote financial inclusion and drive the digitization of the nation’s economy.
In Bahrain, the increased financial inclusion spurred by real-time payments is helping the country follow through on its Wages Protection System, established in 2021. Almost half of Bahrain’s 1.5 million residents are foreigners. Under this system, employers are required to open bank accounts for their employees — both Bahraini and expatriate — and transfer wages through licensed financial institutions. By ensuring employees receive their wages through formal banking channels, more people are integrated into the financial system, fostering economic transparency and accountability.
The ability to participate in the global economy will no longer be a privilege limited to a select few but a right available to everyone, regardless of where they live or their economic background.
Real-time payments fuel business and profit
Real-time payment adoption is expected to create significant benefits for individuals, the financial sector and the wider economy. According to ACI’s Real-Time Payments: Economic Impact and Financial Inclusion report, the top two markets in the Middle East for profit opportunity are the UAE and Saudi Arabia, projected at US$1.8 billion and US$780 million respectively. This is based on the estimated value of financial inclusion — new account holders in the country resulting from the growth of real-time rails.
One of the most significant challenges the financial industry faces today is reconciling legacy, siloed infrastructure with modern payment demands and expectations. Banks that embrace payment modernization can meet rising client demands to deliver enhanced and seamless customer experience across multichannel products and services. By modernizing payments, banks can boost revenue through improved transaction efficiency and lower operational costs. The creation of new digital payment channels can potentially attract new customers and increase transaction volumes.
Shaping payments for a better tomorrow
The payments industry has the potential to be a powerful force for good in the world. As Governments in the Middle East actively advance digital economy initiatives, real-time payments emerge as a proven catalyst for economic growth and increased financial inclusion across the region. The continual investment and expansion in its digital financial infrastructure lays the groundwork for a more inclusive, innovative, efficient and transparent future to redefine the Middle East’s role in the global economy.
