Egypt has an incredibly young population with Generation Alpha (born after 2010) being the largest demographic group, accounting for 30% of the total population in 2022. Together with Millennials (born between 1981 and 1996) and Gen Z (born between the late 1990s and early 2010s), the interests and preferences of young people are set to increase the rate of innovation and new technology adoption in years to come.
Digital payment trends in Egypt will also be heavily driven by government initiatives as well as by the growth of payments for goods and services online. Several steps have already been taken to encourage electronic payments to counterbalance the continued high penetration of cash-on-delivery, estimated at around 50%.It is hoped that these initiatives will usher in a new era of improved digital banking and financial inclusion, with services like BNPL already offering new finance opportunities to more sections of society.
1. Egypt Gradually Moves Away from Traditional Payment Methods
Egypt still relies heavily on cash payments for several reasons. For instance, rural areas constitute more than 57% of the population and 67% of the population is unbanked. Additionally, only 3% of Egyptians have access to credit cards. Interestingly, we have seen this spur on growth in digital payments with Egypt’s lower income classes looking to new solutions to give them the buying power and finance they need, including digital-first banking apps and digital wallets offering alternatives to traditional bank accounts.
For this reason, bill payments, sale of goods and services online, and utility payments were the three largest digital payments verticals in 2022.Digital payment solutions provide an efficient and customer-friendly means of payment that is available to more of society. As mobile phone and internet penetration increases, alongside with confidence in digital payments across all demographics, digital payment gateways will become a highly popular medium for consumer purchases and transactions.To learn more about the payments landscape in MENA, read through the full re:Imagine Payments white paper. You can also keep reading to discover 5 important payment trends happening in Egypt today.
2. The Future of Digital Payments to Be Driven by Younger Demographics
Generation Alpha is the largest demographic in Egyptian society and the nation also has substantial Gen Z and Millennial populations at 23.9% and 21.5% respectively.The impact of these groups will be felt at a consumer level through the increased purchase of goods and services online, smartphone usage and digital services adoption, but alsoas well as through the decisions made by an increasingly young generation of entrepreneurs. Growing consumer interest in digital cards, SMS payments, digital money transfer apps and instant payment services is predicted to result in merchants searching for payment service providers that offer a blend of options to enhance the overall customer checkout experience.
3. Governance and Policy to Drive Digital Payments Growth
Egypt's Vision 2030 outlines a digital strategy to boost digitalization digitalisation and innovation in the country. As part of this plan, the government has announced the establishment of 17 smart cities that integrate brand new technologies to improve the quality of life through digital solutions, including digital payments.
Until recently, the country has relied heavily on traditional payment methods, such as cash/cheques, credit cards and money transfers. However, the government has acknowledged the positive benefits that moving to digital payments will have on the purchase of goods and services online and overall economic prospects in years to come.
4. BNPL Offers New Finance Options for Egyptian Population
Traditionally, instalment payments in Egypt have only been available to people with fixed income, meaning a very large segment of the population was excluded. This includes those who earned money through freelance work and have a variable income. With new and intuitive creditworthiness tracking, the availability of this service is set to expand to more people across Egyptian society.
Additionally, BNPL (Buy Now, Pay Later) in Egypt has been driven by the current economic situation and hurdles in faced by consumers’ ability toin getting bank loans, both of which makes the option to pay in instalments attractive. Competition is set to increase as more brands enter the market.
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5.SME Businesses Are at the Heart of Digital Payments Adoption
Even though most established businesses in Egypt belong to Baby Boomers (born between 1946 and1964) and Gen X (born between 1965 and 1980), who often retain a preference for cash and banking transactions, businesses owned by younger Egyptians are starting to reshape the landscape.
In Egypt, SMEs are the largest employers, and provide providing jobs for 75% of people, and an increasing number of these are run by young and digitally savvy entrepreneurs. In fact, businesses are already looking for ways to gain a competitive edge by offering more rewarding and in-demand online experiences that match the needs of consumers now and in the future.
A younger generation of leaders is proving itself to be highly open to digital payments integrations and are more likely to understand the concepts and intricacies of digital paymentstransactions.
Keen On Learning More?
For more information about the world of digital payments, fintech solutions and the evolution of a cashless economy across Egypt, the UAE and Saudi Arabia, read through the full white paper, “What’s Next for Digital Payments in the Middle East and North Africa.”
Estimates and prospects set out in this blog are taken from the white paper prepared based on in-depth research into the payment industry done by Euromonitor International and sponsored by Amazon Payment Services. The legal disclaimer “Estimates of segment share may be incomplete and unreliable and/or may not include a full set of substitutable products.” will also be added at the end.
