Introduction to Online Payment Gateway
Online payment gateway is a web-based application that acts as an intermediary between e-commerce merchant website and a bank to authorize and authenticate online payments.
The payment gateways transfer the information regarding the transaction between the bank and the payment portal. Payment gateways enable enterprises to collect money through a bank selected by the customer, safely and securely.
Market Overview and Growth Highlights
The Middle East online payment gateway market is observing vibrant growth on account of upsurge in e-commerce industry, rising prevalence of cashless transactions, increasing internet penetration and availability of secure online payment options for both businesses and consumers. Moreover, a surge in the automation of transaction processes have been observed owing to advancements in mobile payment technology and the adoption of IoT, which is also facilitating consumers to initiate payments via different device modules.
The Middle East online payment gateway market is anticipated to grow at a CAGR of 16.5% over the forecast period, i.e. 2019-2027. The market is projected to grow vibrantly in the upcoming years owing to increasing internet penetration, advancements in online payment technology, rise in the use of m-wallets in the region and increase in preference for online retailing. Additionally, growing trust of consumers in online shopping, coupled with awareness for ease of online transactions, is helping digital payments gain popularity over traditional cash transactions. According to Visa, card payments in the UAE during the year 2018 was noted at 70%, which was an increase by 2% from the previous year. Moreover, the e-commerce sector in the region witnessed an increase in spending by 48% in the year 2018 as compared to the previous year. CLICK TO DOWNLOAD SAMPLE REPORT
The Middle East online payment gateway market is estimated to be around USD 2086.9 Million in the year 2018 and is further forecasted to reach USD 8137.9 Million by the year 2027. The market is also fragmented with each country having its own initiative for digitization and e-transactions. Additionally, the region’s central banks are also setting up national payment gateways (NPG) for online transactions in order to provide safe & secure payment gateways to merchants & consumers. Moreover, UAE is the country anticipated to hold the largest market share in the region followed by Qatar, whose market share is estimated to be 18.80% in the year 2018.
Market Segmentation Synopsis
By Enterprise Type
The Middle East online payment gateway market is segmented on the basis of enterprise type into small & medium enterprises (SMEs) and large enterprises. Large enterprises segment accounted for the largest market share, of around 60.9% in the year 2018, owing to high volume of transactions operated by the segment. Small and medium enterprises are gaining traction in the market on the back of growing awareness among merchants, as these online payment gateways offer fraud management & verification technology to ensure secure transactions, provide greater ease of convenience for utilization and for the introduction of solutions which are specially designed for SMEs. In the year 2018, Doha Bank witnessed an increase of 15-20% in number of SMEs shifting to electronic payment system of the bank. Moreover, in the year 2018, Network International in partnership with Shopmatic, introduced ‘Go-Online’, an e-commerce platform with an integrated payment gateway for local small, medium and start-up businesses.
By End User
The Middle East online payment gateway market is segmented on the basis of end user into BFSI, retail, travel, media & entertainment and others. Retail segment accounted for the highest market share with a market revenue of USD 783.5 Million in the year 2018 and is estimated to reach a market revenue of USD 3401.7 Million by the year 2027. Riding on the back of factors, such as, increasing consumer confidence in the authenticity of available online products and the presence of domestic brands in online shopping portals, a dynamic change in the purchasing behavior of consumers is observed with the surge in online payment methods by the consumers in the retail sector.
Market Drivers and Challenges
The Middle East online payment gateway market is thriving on the back of increase in online transactions coupled with the rising demand for m-wallets. The growth of the market is favored by the consumer demographic in the region, which consists of young internet-savvy population who are into greater digital penetration by means of high social media utilization, along with high disposable incomes. Furthermore, added government initiatives for cashless transactions have also created a familiar ambience amongst consumers and enterprises with the process of e-payments, and are also facilitating availability of online payment channels throughout the region, which is anticipated to propel the growth of the Middle East online payment gateway market.
Middle East region lacks the regulatory framework for online payment gateways as well as for the companies operating in this market, owing to which, there lies a greater vulnerability for the protection of sensitive data of both merchants and consumers from theft and manipulations. Additionally, increasing data breaches and cyber-attacks, coupled with high setup cost of online payment gateways are anticipated to affect the Middle East online payment gateway market negatively over the forecast period.
Some of the affluent industry leaders in the Middle East online payment gateway market are Telr Pte Ltd., Payfort International FZ LLC, Checkout.com, 2Checkout, PayTabs, CASHU, and Infibeam Avenues.
Moreover, other key and niche players are constantly working towards the expansion of product portfolio and increase their presence in the online payment gateway market. Enterprises in the region are also investing in high quality R&D so as to develop highly secure online payment gateways in order to gain competitive edge in the Middle East online payment gateway market.
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