The MENA digital payments market presents a significant growth opportunity, with projections indicating a robust CAGR of 10.95% from 2025 to 2030, expanding from USD 251.34 billion to USD 422.56 billion[i]. This dynamic growth is driven by a confluence of factors, including government initiatives, a thriving fintech ecosystem and escalating consumer demand for seamless and real-time payment experiences.
However, this burgeoning market contrasts sharply with the decelerating growth observed in mature markets like Europe (projected at 2%) over the next five years and North America (projected at 5%)[1]. This divergence underscores the critical need for banks in the MENA region to adapt and innovate.
To thrive in this evolving landscape, banking CXOs in the MENA region must prioritise strategic imperatives. These include:
- Modernising operating models: Adapting to the evolving digital payments ecosystem requires a fundamental shift in how banks operate.
- Investing in next-generation technologies: Embracing technologies such as AI, blockchain and open banking is crucial for competitive advantage.
- Forging strategic partnerships: Collaborating with fintechs and other ecosystem players can accelerate innovation and expand market reach.
- Prioritising customer-centricity: Delivering seamless, personalised and secure payment experiences will be paramount in attracting and retaining customers.
Failure to adapt to these imperatives could leave banks in the MENA region at a significant disadvantage in this rapidly evolving market.
Key Trends Shaping the Payments Landscape in 2025
According to a recent survey, only 10% of banking executives believe incumbent banks will lead payments innovation by 2030[2]. Meanwhile, 37% predict dominant consumer technology giants (such as Apple, Google) will drive innovation, while 16% each expect fintechs and major digital businesses (like Amazon, Uber, Alibaba) to take the reins. In this rapidly evolving environment, which key trends should banks be focusing on? What strategic priorities will keep them relevant through 2025 and beyond? Let’s explore these questions here.
- Real-Time Payments (RTP): The Middle East has emerged as the world’s fastest-growing RTP market, with transactions projected to hit the $2.6 billion mark by 2027[3]. This growth is driven by transformative government-led initiatives like Saudi Arabia’s instant payments system, “Sarie,” and the UAE’s efforts to modernise payment infrastructures.
- Digital Wallets and Mobile Payments: The Middle East and Africa (MEA) mobile payments market is expected to register a CAGR of 30.1% during 2025-2030[4]. The region has witnessed a significant decline in cash usage for in-store payments, supported by the rise of mobile payments. Smartphone penetration rates of 80%-90% in leading Middle Eastern markets have facilitated this shift[5].
- ISO 20022 Migration: The migration to ISO 20022 in the MEA region is set to enhance payment infrastructures, enabling faster cross-border transactions and improved compliance with international standards. This transition is crucial for banks to streamline operations and offer improved services.
- Regulatory Compliance: Regulatory bodies in the Middle East are proactively establishing frameworks to ensure the stability and security of the payments ecosystem. For instance, the UAE’s Stored Value Facilities Regulation and Saudi Arabia’s digital banking initiatives are setting compliance standards that financial institutions must adhere to.
- Intensifying Competition: The payments sector is witnessing heightened competition from fintechs, neobanks and integrated software vendors (ISVs), particularly among small and mid-size businesses. ISVs are distinguishing themselves by integrating payment solutions with digital wallets and operational tools, creating seamless experiences that are highly attractive to merchants. For traditional banks, this necessitates a strategic shift towards exploring partnerships and investing in digital capabilities to retain and grow market share.
- Embedded Finance: The embedded finance market is anticipated to maintain a steady growth trajectory with a CAGR of 27.5% from 2024 to 2029, resulting in USD 37.68 billion revenues by 2029[6]. Sub-segments such as Buy Now, Pay Later (BNPL) and open banking are gaining momentum and expanding into new sectors like housing and utilities, groceries, car payments and repairs, and others as businesses recognise their potential to enhance customer experiences and promote financial inclusion.
- Cross-Border Payments: There is an anticipated acceleration of cross-border, cross-currency instant and B2B payments. This is reinforced by the adoption of ISO 20022, providing a consistent messaging standard for payments, enabling seamless 24/7 transactions across borders.
Composable Payments Platforms: The Key to Transformation
To meet the demands of this evolving landscape, composable payments platforms addresses diverse challenges, including seamless integration of different payment channels, agility in adapting to evolving standards, innovation in product offerings and customisation for varied business and customer needs. With scalability to handle increased transaction volumes and interoperability with ecosystem partners, composable architectures ensure that banks can stay competitive and meet the dynamic demands of the market, enhancing security and minimising risks. Furthermore, these platforms leverage ISO 20022 standards, API-driven interoperability and reusable components to deliver dynamic and secure payment solutions.
Key features of a composable payment platform:
- Modularity: Composable platforms function like building blocks, allowing banks to assemble and disassemble components to meet specific needs. This modularity ensures scalability and flexibility.
- API-Centric Design: Well-defined APIs enable seamless integration with third-party systems, fostering collaboration and ecosystem innovation.
- Standards-Based Integration: Platforms built on ISO 20022 standards ensure consistency and interoperability across global markets.
- Service Composition: Composable platforms offer the infrastructure to create new services and evolve existing ones, fostering continuous innovation.
- Interoperability: These platforms emphasise seamless interaction between internal components and external systems, creating a connected financial ecosystem.
An example of a bank that is laying the foundations with Next Gen Open Enterprise Payments would be Qatar National Bank (QNB), implementing the newest faster payment rail in its home country in a record time of 16 weeks. This significant milestone underscores QNB’s dedication to driving innovation and enhancing customer experience in the rapidly evolving financial landscape.
Conclusion
The MENA payments market is experiencing unprecedented growth, driven by a confluence of factors. However, this growth also brings increased competition. Composable payment platforms offer a competitive edge by enabling businesses to:
* Adapt quickly to market changes: Respond swiftly to evolving consumer demands and regulatory shifts.
* Innovate with agility: Easily integrate new features and functionalities to stay ahead of the curve.
* Reduce time-to-market: Launch new products and services faster and more efficiently.
* Enhance customer experience: Deliver seamless and personalised payment experiences.
[2] *innovation-in-retail-banking-2024 (1).pdf
[3] The Middle East Is the Fastest Growing Real-Time Payments Market Globally, Finds ACI Worldwide Report | ACI Worldwide
[4] Middle East and Africa Mobile Payments – Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2025 – 2030)
[5] Growth of digital payment methods in MEA
[6] Africa & Middle East Embedded Finance Market Size & Trends
[i] https://www.mordorintelligence.com/industry-reports/middle-east-and-north-africa-digital-payments-market
