Cross-border payments are a cornerstone of MENA’s financial landscape, with the UAE and KSA alone contributing nearly US$77B in remittance outflows in 2023, making the region one of the largest send markets globally. Consumer behavior further underscores this demand, with 58% of UAE online purchases and nearly 29% of MENA e-commerce transactions crossing borders.
The sector is evolving rapidly: costs are falling, transaction speeds are improving, and user experiences are becoming seamless. Established players are moving beyond aggregators toward direct connections, while local payment networks like mada (Saudi Arabia) and Aani (UAE) are laying the foundations for future interoperability. Yet, the industry faces real challenges, including margin squeezes from regulatory pricing pressures, escalating compliance and security costs, and concerns around unsustainable “race-to-zero” models.
To address these, stakeholders highlighted a regulatory wish list that includes passporting licenses across GCC/MENA, balancing consumer protection with the cost of compliance, and exploring precedents like Ghana’s fee-floor model and India’s PA-CB framework for payment aggregators. Looking ahead, opportunities lie in serving SMEs and micro-merchants, developing orchestration layers to optimize payment flows, and leveraging innovations like stablecoins and programmable settlement for trade finance.
This whitepaper captures the collective insights shared during this month’s Boardroom Lunch, reaffirming the role of MFTA SHIFT Working Group for dialogue, action, and impact, supporting the vision of a connected, transparent, and innovation-driven payments landscape across MENA.
Key Takeaways
- Cross-Border Significance: Remittance flows and e-commerce behaviors make MENA central to global payments.
- Opportunities & Risks: While costs are dropping and rails are maturing, compliance and security remain critical guardrails.
- Regulatory Gaps: Cross-border frameworks require harmonization and safeguards against destructive pricing.
- Future Pathways: Innovations in SME services, orchestration, and selective deployment of stablecoins point to the sector’s growth frontier.
