Egyptian consumers embrace digital payments

Egyptian consumers embrace digital payments
  • 88% of consumers in Egypt have used at least one emerging payment method in the last year, with usage expected to further increase
  • Adoption of Buy Now Pay Later (BNPL), open banking and account-to-account payments are anticipated to continue accelerating
  • Gen Z and Millennials are leveraging more digital payment methods and are more open to buying virtual products in the metaverse

Adoption of a broader range of digital payment methods is accelerating in Egypt and the technology fuelling the future of payments is already here according to Mastercard Payment Index 2022.

In addition to being aware of solutions like digital cards, BNPL (Buy Now Pay Later), and open banking, consumers in Egypt are increasingly and actively using these solutions in their everyday lives.

Mastercard Payments Index 2022 found that 88% of people in Egypt have used at least one emerging payment method in the last year. They include 35% who used tappable smartphone mobile wallets, 27% who used a digital money transfer app, and 24% who used QR codes.

Consumers are also making purchases in increasingly diverse ways, including through voice assistant and through social media apps.

Usage of digital payments increasing, use of cash declining

While traditional payment methods still have traction, 15% of consumers in Egypt indicated they used less cash in the past year. By contrast, 64% of Egyptian users (compared to 61% globally) increased their use of at least one digital payment method in the last year, including digital cards, SMS payments, digital money transfer apps and instant payment services. These behaviours are expected to continue, with comfort and security key to growing adoption.

The Index confirmed security is top of mind when deciding what payment methods to use, globally and in Egypt (39%). Locally, other priorities include rewards, ease of use and promotions. Highlighting sustainability as a key driver in the country, 31% of Egyptian consumers said they also consider social and environmental benefits.

“Egypt is a fertile ground for all that is innovative and digital. It’s wonderful to see consumers in Egypt adopting different payment options such as payment apps and BNPL, and discovering more of the digital economy’s benefits,” said Adam Jones, Country General Manager, MENA Central, Mastercard.

Mastercard Payments Index 2022 further shows:

High awareness of Buy Now, Pay Later (BNPL) Installments as a budgeting tool

The majority of Egyptian consumers have heard of BNPL with 81% saying they are familiar with the concept, and half (50%) already comfortable using it today.

Those that have used BNPL find it useful for planning payments and big-ticket purchases, as well as increased purchasing power. Consumers also find BNPL useful for unique use cases, including as a budgeting and financial planning tool.

Receptiveness to more direct Account-to-Account (A2A) payments

The majority of consumers are seeking greater agility to optimize bill payments, prioritizing control, flexibility, convenience, and integrated payment technologies. Most consumers are open to direct account-to-account payment options, by linking their account to a merchant site for future purchases. 80% of Egyptian consumers using account-to-account payments, have maintained or increased their usage in the last year.

Two thirds of consumers (66%) agree they are interested in a bill payment option that allows them to change the date they pay their monthly bills, mostly due to an irregular income. Bill payment options that allow them to pay over a period using a buy now, pay later solution (69%) was also of interest, as well as automatic payments for their household bills (69%).

Consumers turning to fintech, and indirectly open banking, to accomplish everyday finance needs

Consumers are relying on digital finance options for their everyday financial tasks, with the benefits of open banking like speed, convenience, and transparency. Seven in ten (71%) know about open banking, and are using it to pay their bills, do their banking, secure or refinance loans, and make BNPL payments.

More than half of Egyptian consumers (61%) feel safe using apps to send money to people or businesses from their phone. Four in ten (42%) are willing to share financial data information with apps to have access to payment tools that help them manage their money.

Emerging payments have strongest traction among more digitally native generations

Younger generations have gone more digital in their purchasing and payments behaviour, and their engagement in and usage of emerging digital payments engagement is accelerating at a faster rate than older audiences. While security and data privacy remain a concern for them, it is less heightened than for older audiences, and they are more likely to perceive digital tools as secure.

In Egypt, Gen Z and Millennials are less likely to make in-person purchases and payments. They are proactively seeking out new payment methods, with 40% of Gen Z and Millennials likely to have obtained a new touch-free payment method (e.g. tap to pay card or wearable device) compared to only 26% of Gen X.