Middle East

Gone are the days, when company’s location played a crucial role in the whole business development. With new technologies coming around, ventures from every corner of the world are able to go international.

More priority has been obtaining by traditions and customs of the targeted market. With the right key every country’s door will be open for a new market participant. Middle East region is not an exception.

Region’s peculiarities

While cash rules the market, it remains the one payment strategy to go the first. Concerning Middle East, this way of payment thinking is its feature as well. In fact, around 75% of all transactions belong to cash method.

To say more, well-known Middle East region’s religious values may form a bit of difficulty for payment methods to operate. Interest principles in the Quran and the Hadith promote Islam practices, what may be inconsistent with several payment systems’ intentions.

Despite the most population’s welfare and its readiness to meet technological advances, Gulf countries haven’t yet launched digital payments at full efficiency.

The most widespread option across Middle East

Credit cards lack has resulted in the popularity of cash on delivery method within payments in Middle East. This situation plays into the consumers hands, as thus they can pay the order just after the goods, that they have bought online, are checked by them. Because of frequent returning cases, merchants try to avoid such option implementation.

Entrepreneurs in Saudi Arabia have to cope in local terms with all this method’s deficiencies, regarding the well-being of the region’s citizens majority. So, over 75% of transactions made here are cash on delivery. To add to clients convenience, residents are tax-free.

Second popularity among payment methods refers to debit cards

According to previously mentioned, religious principles don’t support credit and interest. As a solution, it was decided to impose debit cards usage. It turns out to be a great alternative to credit ones, as this payment way enables consumers to complete electronic transactions. Merchants got their benefits as well. Notably, with debit cards implementation it is much harder for clients to make a refund.

To bare in mind, debit cards limit the amount of available money, according to customers bank account, to make online purchases. Moreover, debit cards can’t provide user with appropriate data protection.

Whatever the case, credit cards still have their clients

While building payment strategy regarding Middle East region, it’s important to consider the population, who are immigrants or who are of different religious believes.

In fact, Arab countries count a huge number of expatriates, who came mostly from Western countries, United States or South Asia. Together with non-Muslims, migrants form a broad audience of credit card holders. By the way, Visa and MasterCard are commonly used credit cards schemes.

CashU prepaid cards

CashU is considered to be a specific payment option for population of MENA. This method allows for merchants and entrepreneurs from Middle East to keep in touch with ones in North Africa.

By being a prepaid card option, CashU ensures more safe transfers and enables to recharge the card in order to use it while shopping the next time.

PayPal is gaining pace

By now, PayPal has already covered 5% of e-commerce market. Recently it has launched the mobile version, aiming to simplify payments. Besides, the company has declared its intention to develop new specific features, which will add more resilience and adaptability to payment process within the Middle East region.

Owing the beginning of PayPal campaign, it remains hard to obtain a PayPal account. One more obstacle lays in distrust towards banks.

Wire transfers as an alternative

To say the truth, this payment method tends to be quite confusing. Among disadvantages to mention is it’s not completely automated mechanism, what is rather inconvenient issue for the e-commerce webs. Furthermore, there is a possibility of information distortion.

However, in spite of all above said, a lot of merchants decide to offer such option, aiming to reach certain demographic auditory or when selling goods of higher-price.

Because of the region’s unusual features, it’s hard to foresee the e-commerce development in Middle East market. After all, sooner or later technological advances cannot be avoided in Gulf countries as well, so, until the payment strategy should be built thoughtfully.