The past few years have proven that our global economy depends on seamless connections — of people, raw materials, goods and services. Among these important connections, the ability to make and receive payments quickly and easily is crucial, but failed, late and fraudulent payments risk undermining trust in these crucial networks. We must come together to enable money to move more safely, simply, reliably and transparently.
Traditionally, cross border payments are not efficient or user-friendly.
Expensive: Transaction fees and SWIFT fees can be expensive. On top of this, the spread on the foreign exchange may be high. It’s especially pricey for low value transactions.
Slow: Because many partners are involved, it slows down the transaction time to a few days in certain emerging markets.
Inaccessible: Certain global communities remain underbanked. This makes money transfers challenging for customers without access to traditional banking.
Financial resilience was a prominent theme during this year’s World Economic Forum, which we discussed last month in our post on the GCC economies. An S&P study indicated that 66% of the global population are not financially literate. To address these challenges, many governments are launching financial literacy programs to support local communities. For example, Saudi’s Ministry of Education launched a mandatory course, “Financial Knowledge” last year and the Authority of Social Contribution in Abu Dhabi offers the “Ghaya” to locals. It is a slow shift towards financial inclusion. Yet, these educational programs and access to better payment solutions act as a bridge towards greater inclusion.
Looking forward
MENA’s focus on attracting expats to the region is not slowing down. In fact, Dubai’s Urban Plan looks to double the population by 2040 and the revolutionary Saudi construction, The Line aims to draw 9 million people to the city. These major developments along with digital transformation equals a host of opportunities for modernised payments in the region.
