How SMEs Are Driving A Fintech Revolution Across The MENA Region In just a little over a decade, fintech has advanced so rapidly that our current digital payment landscape would have been almost unimaginable not too long ago.
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When you think about the future of digital payments, what comes to mind? Is it the seamless interface that anticipates your needs, the convenience of instant transactions at your fingertips, or the assurance that your funds are always secure?
The truth is, all of these are part of the picture. In just a little over a decade, fintech has advanced so rapidly that our current digital payment landscape would have been almost unimaginable not too long ago. And the UAE has positioned itself at the heart of this evolution – defying a global downturn in fundraising to achieve an impressive 92% rise in fintech investment last year.
This accomplishment is nothing short of remarkable. As someone who works in this field and has witnessed this momentum firsthand, I'm acutely aware of the immense potential and promise this sector holds for the 23 million small and medium enterprises (SMEs) in our region.
With so much potential, it's worth asking: What does the future hold for digital payments in the Middle East? Based on my experience as a founder and entrepreneur in this industry, I believe that three key trends will shape the future: user-centric experiences, security, and versatility. Here's why.
Enhancing ease of access and user-centric experiences
First, we'll see an even greater focus on improving ease of access and user-centric experiences in digital payment. According to the World Bank, a lack of access to high-quality digital financial services is one of the biggest barriers for SMEs globally. This challenge is precisely why fintech companies, particularly those in digital payments, came into existence.
Many digital payment providers were founded to serve market segments that legacy banking left behind. As a result, delivering superior digital experiences has become the key battleground where these companies invest most of their resources. Whether it's developing the most intuitive interfaces or offering seamless integration with other financial tools, the goal is to make every user's life easier.
The enormous growth of SMEs across the Middle East – 72% of which predict revenue increases over the next 12 months—is driving demand for homegrown fintech companies to meet their payment needs. To give you an idea of the scale: at Ziina, we processed AED 550 million in digital transactions last year—that's almost AED 1.51 million a day. And there are numerous other smaller providers operating in the sector.
This growing demand from the SME sector is sure to attract new players, all vying to outcompete each other with the most innovative products. This is great news for customers, who will benefit from an ever-improving digital payment landscape.
Prioritizing security
While SME owners value a streamlined user experience, they also need peace of mind—knowing that the money they handle through digital platforms is secure.
Delivering this level of security assurance requires obtaining licenses from central banks and regulatory authorities, which involves meeting stringent standards in risk management, compliance, and cybersecurity.
Licensing is often a weak spot for many fintech companies, especially during their growth stages when other priorities take precedence. In fact, only a limited number of digital payment providers have obtained the complete set of licenses in their jurisdictions – Revolut, one of Europe's largest fintechs, famously waited over three years for its banking license in the UK.
However, the benefits of achieving this milestone, though challenging and time-consuming, are immense for both the business and its customers. For example, securing the UAE Central Bank's Stored Value Facilities (SVF) license, which we are proud Ziina achieved earlier this year, is crucial for any UAE-based fintech aiming to offer top-tier digital wallets and payment solutions. It demands extensive fine-tuning of risk management and compliance systems, which not only strengthens internal operations but also greatly enhances credibility with SME customers.
Embracing versatility
Finally, versatility is key. Most SMEs today rely on omnichannel sales, with a presence across platforms like TikTok and Instagram, as well as physical locations like pop-up shops and stores.
However, there's a significant gap in omnichannel payment solutions for SMEs. Currently, 33% of SMEs rely on more than four financial service providers for their everyday needs. This presents an exciting market opportunity for those capable of offering comprehensive, 360-degree payment solutions. Providers that can meet the financial needs of SMEs across all channels are uniquely positioned to capitalize on this market gap and attract customers.
In other words, versatility is the future of digital payments. As with user experience and security, the increasing competition in this area means that customers stand to gain the most.
Conclusion
SMEs are driving a fintech revolution across the region, sparking a surge in demand for digital payments. In the UAE alone, SMEs already account for over 60% of non-oil GDP, and by 2030, their numbers are set to soar to 1 million.
As these businesses expand and demand more from their financial service providers, the fintech industry faces a crucial moment. The companies that deliver the most user-friendly, secure, and versatile solutions will rise above the competition. Their innovation will benefit users, contributing to the growth of a dynamic ecosystem that will shape the future of digital payments.
Related: Charting New Paths: Embracing The Entrepreneurial Boom In The UAE
