WHY THE STATE OF PAYMENTS?
Welcome to the State of Payments 2016 by PAYFORT. For the third year in a row we’re releasing our annual report that details the world of payments, ecommerce and innovation across the Arab World.
We’ve collected data from both consumers and merchants to provide you with actionable insight you can use to create a more successful, profitable and consumer focused business.
Two years ago we released our first State of Payments report, something that evolved out of a desire to increase our own understanding of consumers in the region and share that information with the growing business community throughout the Arab World.
In last year’s report, we strived to create something that not only contained the same consumer-centric data but also presented that data in a meaningful way. We wanted to create a fuller picture that incorporated the opinions of hundreds of merchants who interact with consumers on a day-to-day basis.
In this year’s report we’ve once again reimagined how best to share the massive amount of data that is available within the Middle East’s ecommerce sectors. To do this we have refocused the report to not only explore current trends, but also address the real issues that impact merchants on a day to day basis and share meaningful solutions for the future.
Over the past three years State of Payments has become our favourite content piece and we’d love to hear your thoughts on the report. Be sure to reach out via social media using the hashtag #StateofPayments or contact us via email@example.com to share your thoughts. We have also provided a feedback section within the report where you can share your thoughts.
ABOUT THE REPORT
The report is divided into four main sections: Trends, Demographics, Consumer Survey, and Challenges.
Geographically the report covers Egypt, Lebanon, Jordan, Kuwait, Saudi Arabia, Qatar and the UAE.
The report uses responsive, interactive sections allowing you to easily navigate through the data and locate the specific information you need. We have collaborated with Kotobee.com as a partner of digital publishing to allow the report to all digital libraries We hope you like it and use it as a starting point for a conversation about the state of payments in the Arab World.
ABOUT THE AUTHORS
This report was written and created by the PAYFORT Team. Content was provided by Amira Abou Shousha, Omar Soudodi and Nardeen Abdalla with visuals created by Seham Syed.
Special Thanks for PAYFORT team members Ankit Shukla, Dalia El Gammal, Haitham Hawam, Harun Ramakumaran, Maarid Fazili, Maryam Albassam, Mohamed Sayed, Mohammad Qudah, Mohammad Al-Rifai, Muteb Alobeiwi, Rami Makerm, Rohn Munsayac, Sanjay Ramchandani, Shereen Ghazy.
The PAYFORT team took great care to curate the data within this report. We worked with a range of partners, merchants and consumers to collect the required information and focused on presenting the data in useful and easy to understand formats.
The heart of our research was carried out using detailed surveys that polled hundreds of regional merchants and thousands of consumers across Egypt, Lebanon, Jordan, Kuwait, Saudi Arabia, Qatar and the UAE.
This data was then reviewed by our in-house team of market analysts and country managers to ensure that the data collected aligned with real world trends across the region.
We have included detailed notes on the individual sections below. If you have any questions don’t hesitate to email Amira Abou Shousha. Also please let us know if you’re looking for a little bit more information on any topic, we’ll try our best to get you what you need.
Each sector discussed in this report represents a section of the overall online marketplace. We have provided brief descriptions of each sector for your reference.
Represents online transactions that occur with regionally based airlines and local carriers, this sector does not include independent travel agencies, booking services or airlines based outside of the countries studied.
Travel & Tourism
Represents online transactions with third party booking services, travel agencies, and other tourism based organizations (e.g. Hotels)
Events and Entertainment
Represents online transactions that relate to venue based events, this section does not include entertainment products (videogames, online streaming services, movies, etc.)
Represents online transactions that relate to the purchase of products and tangible goods, this does not include services.
Represents online transactions that relate to the purchase of web based services such as online streaming and gaming, recruitment, maintenance, classifieds.
Our team used a bottom-up approach to evaluate the market activity and calculate overall sector sizes. We studied the number of consumers within each market and combined that data with detailed user behaviour to accurately estimate overall market sizes. We then reached out to companies across the region to verify that our data aligned with real world observations within their respective sectors.
The transaction data for this section includes all transactions completed online regardless of payment method. This includes ‘In person payments’, ‘Cards’ and ‘cash on delivery’ based transactions.
Growth forecasts are based upon historical rates as per data gathered between 2011 – 2015.
Acceptance and Refund ratios are based on data collected from businesses across the region.
What is an acceptance ratio? This ratio simply tells us how many customers can successfully use their credit card on a website. This is based upon the number of credit card transaction attempts and the number of those transactions that are approved.
What is a refund ratio? A refund occurs when the merchant and the customer agree to refund the purchase for one reason or another. Unlike chargebacks this transaction does not involve the issuing bank.
All data collected was averaged to generate sector data and does not represent the performance of any single business within that sector.
The data in these sections are not representative of the entire market and represent a projection based on surveyed merchants within each sector. The data is intended to provide a snapshot of the year’s seasonality across each sector however, due to confidentiality requests we cannot reveal true transaction figures.
The figures charted on the graphs instead represent divergence from the 12-month average. So if transaction volume figure in September is 3,000 that means there were 3,000 more transactions than the 12-month average.
The seasonality data is inclusive of online credit card transactions only. Cash-On-Delivery and in person transactions are not taken into consideration for this section.
The data in this section is based upon a survey of thousands of online buyers across Egypt, Lebanon, Jordan, Kuwait, Saudi Arabia, Qatar and the UAE collected using YouGov.
Additional data was sourced from and cross referenced with the World Bank database.
Survey data was collected utilizing a YouGov based poll of thousands of consumers across the region. It also incorporates survey data gathered from industry responses to a custom survey created by PAYFORT. Respondents include SMEs (small and medium enterprises) and enterprise level firms.
Some questions allowed respondents (consumers and businesses) to provide multiple answers and all respondents were not required to answer every question within the survey.
This section provides an overview of the key challenges PAYFORT has identified for ecommerce with the Middle East. This section draws information from interviews with industry leaders and the PAYFORT strategy team.
Each challenge is structured to include a detailed breakdown of the problem, a list of potential solutions, and finally PAYFORT insight on how to best address these issues.
This section provides a look forward at what online business could become in the region and around the world. We consulted with PAYFORT team members from various departments to identify major obstacles and creative solutions.
The section aims to spark the imagination and bring to light potential opportunities for the ecommerce businesses of tomorrow.
All figures are in USD