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How money moves in Morocco

Written by

George Davis

on

Dec 13, 2023

/

How money moves

How money moves in Morocco

Written by

George Davis

on

Dec 13, 2023

/

How money moves

How money moves in Morocco

Written by

George Davis

on

Dec 13, 2023

How money moves: Morocco
How money moves: Morocco
How money moves: Morocco

The short version

Steeped in history, a strategic outpost for commerce along trade routes and a strong agricultural exporter: Morocco. It is a kingdom that has a growing youth-driven market and a significant diaspora requiring remittance corridors to send money home. Economic reform and privatisation has encouraged foreign investment and entrepreneurship since the 1980s. Recent updates to regulations enable modern payment solutions to enter the market in line with international standards.

The long version

The Kingdom of Morocco (Arabic; المغرب) is situated in North Africa, across the Strait of Gibraltar from Spain. The constitutional monarchy sits at a bridge between the Atlantic Ocean and the Mediterranean Sea. Morocco is led by King Mohammed VI (Head of State) and Aziz Akhannouch (Prime Minister). The capital, Rabat is built along the Atlantic coast while its largest port and commercial hub is the city of Casablanca. Boasting a rich history and local tourist sights attracts visitors from across the globe. Local souks in the ancient city, Fès (now marked as a UNESCO World Heritage site) are some of the most prized in the region. Historically, Morocco has been a crucial centre for commerce due to its key positioning along trade routes across MENA and Europe.

Map of Morocco

Kicking off with the macroeconomic landscape, growth and stability are evident. The World Bank reported the nominal gross domestic product (GDP) for 2022 at $134.18 billion. This year, it is forecasted that the GDP will close out between $138.781 billion and $147.34 billion. This is after the economy contracted in 2022 due to effects from the global pandemic. However, tourism has rebounded to pre-Covid levels and steady exports have supported a recovery. Specifically, the agricultural sector is predominantly driving GDP growth. Since the 1980s, the government has undergone efforts to privatise and reform the economy as supported by the IMF and World Bank. To add, a Special Commission on the Development Model (SCDM) report determines the economy needs to evolve from a “low-value-added economy” to a “diversified competitive economy, supported by a vibrant fabric of innovative and resilient enterprises” with job creation (particularly for women and youth) and economic growth at the forefront. In 1999, a public loan fund was set up for small businesses to encourage growth and entrepreneurship.

The Moroccan Dirham (DH) is the state’s official currency which is regulated by Bank Al-Maghrib (Morocco’s central bank). Its value is calculated by a predetermined basket consisting of US dollars and Euros, which fluctuates in line with the underlying currencies. Given the currency fluctuations, Bank Al-Maghrib has pursued a targeted inflation rate within the monetary policy. Since independence, the kingdom has maintained political pluralism and economic liberalism. Such economic openness encourages multilateral trade, foreign investment and securing Morocco’s place in the world economy. Foreign direct investment to the kingdom sits at an impressive  9% of total inflows to Africa, making it one of the top recipients of the continent.

The population is estimated at around 37 million people, with a median age of 29 years old. Young adults (ages 15 - 29) constitute roughly 26% of the total population, a smaller percentage when compared with other countries across MENA. Tamazight, a language of the Amazigh people, and Arabic are both official languages while French and Spanish are also widely spoken across the land. It’s reported that 63% of Moroccans are urbanised. Based on World Bank data, just under half of Morocco’s adult population (44%) were banked in 2021 which had risen from 27% back in 2017: Morocco sits behind the UAE, Saudi and Jordan. Tech adoption is steadily increasing. Mobile phone penetration is around 50.2 million and internet connections totals 33.18 million. The kingdom has the 4th largest online population in Africa, behind Nigeria, Egypt, and South Africa.

Western Europe required rebuilding after World War II. Many blue collar Moroccan workers emigrated, contributing to the significant diaspora population today. It is estimated that 15% (~ 5 million) of the population live abroad, with the majority still based in Europe — 33% in France, 26% in Spain and 16% in Italy. In turn, the personal remittance market is sizable. For 2022, the inflow of remittances received accounted for 8.3% of the GDP. Morocco ranks second to Egypt as the leading recipient of remittances in MENA. A report by the World Bank established that the remittances are driven by diaspora based out of Europe where there is strong economic activity.

Traditional payment methods remain commonly used channels while digital transactions consist of only 5% of the market. This is a clear opportunity for cross-border payment companies to support the need to remit funds into Morocco. A major Moroccan bank, Banque Centrale Populaire Maroc (BCP) recently launched PayTracker for its customers which allows real-time international transaction tracking. Wafacash, a Casablanca-based transfer house partnered with World Remit in 2017 for international transfers where remittances fuels its proposition.

Fintech is on the rise. A 2022 McKinsey report on African fintech indicated Morocco is one of top states on the continent for the industry to grow in the next few years. Bank Al-Maghrib is a supporter of local Fintech, encouraging digital adoption in the financial sector. As part of the Bank Al-Maghrib’s national strategy, financial inclusion remains a priority. When we take a look at payments, an interesting picture emerges:

  • Cash is still dominant. In 2021, 74% of payments were made in cash, including utility bills and remittances. Yet, Moroccans are starting to move away from cash slowly, with 11% of consumers indicating that they’ve used cash less in the past 12 months (when compared to previous years). 

  • Major card schemes, Visa and Mastercard are widely accepted.

  • Mastercard’s New Payments Index 2022 reports at least one new payment method has been used by 75% of Moroccans in the past year. This may include money transfer apps (24%), tap-and-go smartphone wallets (20%) and buy now pay later (BNP) instalments (10%).

  • Banking infrastructure is developed however personal banking is not extremely popular. Some unbanked Moroccans have indicated that insufficient funds are the main reason for remaining unbanked. 

  • A PPRO e-commerce report recently indicated 17% of online purchases are card transactions. A remainder of payments are either cash or alternative online payment methods. Sixty percent of online purchases are completed via a mobile device. Moroccan ecommerce is growing, currently estimated at $2 billion and by 2027, it is expected to total $3 billion. 

  • In 2018, Bank Al-Maghrib and the National Telecommunications Regulatory Authority launched the mobile payment platform, M-Wallet designed to promote digital payments. Other telecoms have developed mobile money solutions which have seen a slow uptick in recent years, largely in rural areas. Mobile money is an attractive market due to the mature mobile market and largely underbanked population. 

  • Of the estimated 40 Fintechs, the most developed verticals are payments, remittances and point-of-sale (POS) networks. Namely, Invyad provides a POS solution for SMEs. Inwi Money and HmizatePay offer mobile money, while OnePay was launched in 2020 offers payment aggregation services. 

  • Earlier this year, local banks -  Crédit Immobilier et Hôtelier (CIH) and Groupe Crédit Agricole du Maroc - launched Apple Pay to support the digital transformation of their card services. 

  • Strengthening its economic integration with the Arab states, Bank Al-Maghrib recently confirmed a membership with the Arab Regional Clearing and Settlement system, Buna.

Bank Al-Maghrib is the regulatory authority which oversees the payment and banking activities in the kingdom. The Revised Banking Law of 2015 introduced a new era for payments through the enablement of a new type of payment service provider: Payment Institutions (PI). This allows non-banking institutions to apply for a PI licence which enables electronic money services, payment transactions, remittances and payment processing. Foreign critics believe this is a positive step as Morocco matches international practices. An advantage for any PI operating in Morocco is that they are allowed to collect deposits into a payment account. The regulation details three account levels:

  1. up to MAD 200,

  2. from MAD 200 to MAD 5,000 and from

  3. MAD 5,000 to MAD 20,000.

These levels directly determine the compliance processes such as know your customer (KYC) as well as specific measures against money laundering and terrorist financing. Capital requirements for PIs is MAD 6 million and for those approved to offer other payment services, as defined in article 16 of the banking law, must have a minimum capital of MAD 10 million.

Morocco has made progress in its goal of financial inclusion and development. In the payments arena, modernised regulations and a growing number of payment solutions are positive indicators for the market trajectory. Significant potential lies in the demand for remittance corridors and local payment options. If Morocco is on your expansion roadmap, reach out to the Fuse team to unlock payments.

The Kingdom of Morocco (Arabic; المغرب) is situated in North Africa, across the Strait of Gibraltar from Spain. The constitutional monarchy sits at a bridge between the Atlantic Ocean and the Mediterranean Sea. Morocco is led by King Mohammed VI (Head of State) and Aziz Akhannouch (Prime Minister). The capital, Rabat is built along the Atlantic coast while its largest port and commercial hub is the city of Casablanca. Boasting a rich history and local tourist sights attracts visitors from across the globe. Local souks in the ancient city, Fès (now marked as a UNESCO World Heritage site) are some of the most prized in the region. Historically, Morocco has been a crucial centre for commerce due to its key positioning along trade routes across MENA and Europe.

Map of Morocco

Kicking off with the macroeconomic landscape, growth and stability are evident. The World Bank reported the nominal gross domestic product (GDP) for 2022 at $134.18 billion. This year, it is forecasted that the GDP will close out between $138.781 billion and $147.34 billion. This is after the economy contracted in 2022 due to effects from the global pandemic. However, tourism has rebounded to pre-Covid levels and steady exports have supported a recovery. Specifically, the agricultural sector is predominantly driving GDP growth. Since the 1980s, the government has undergone efforts to privatise and reform the economy as supported by the IMF and World Bank. To add, a Special Commission on the Development Model (SCDM) report determines the economy needs to evolve from a “low-value-added economy” to a “diversified competitive economy, supported by a vibrant fabric of innovative and resilient enterprises” with job creation (particularly for women and youth) and economic growth at the forefront. In 1999, a public loan fund was set up for small businesses to encourage growth and entrepreneurship.

The Moroccan Dirham (DH) is the state’s official currency which is regulated by Bank Al-Maghrib (Morocco’s central bank). Its value is calculated by a predetermined basket consisting of US dollars and Euros, which fluctuates in line with the underlying currencies. Given the currency fluctuations, Bank Al-Maghrib has pursued a targeted inflation rate within the monetary policy. Since independence, the kingdom has maintained political pluralism and economic liberalism. Such economic openness encourages multilateral trade, foreign investment and securing Morocco’s place in the world economy. Foreign direct investment to the kingdom sits at an impressive  9% of total inflows to Africa, making it one of the top recipients of the continent.

The population is estimated at around 37 million people, with a median age of 29 years old. Young adults (ages 15 - 29) constitute roughly 26% of the total population, a smaller percentage when compared with other countries across MENA. Tamazight, a language of the Amazigh people, and Arabic are both official languages while French and Spanish are also widely spoken across the land. It’s reported that 63% of Moroccans are urbanised. Based on World Bank data, just under half of Morocco’s adult population (44%) were banked in 2021 which had risen from 27% back in 2017: Morocco sits behind the UAE, Saudi and Jordan. Tech adoption is steadily increasing. Mobile phone penetration is around 50.2 million and internet connections totals 33.18 million. The kingdom has the 4th largest online population in Africa, behind Nigeria, Egypt, and South Africa.

Western Europe required rebuilding after World War II. Many blue collar Moroccan workers emigrated, contributing to the significant diaspora population today. It is estimated that 15% (~ 5 million) of the population live abroad, with the majority still based in Europe — 33% in France, 26% in Spain and 16% in Italy. In turn, the personal remittance market is sizable. For 2022, the inflow of remittances received accounted for 8.3% of the GDP. Morocco ranks second to Egypt as the leading recipient of remittances in MENA. A report by the World Bank established that the remittances are driven by diaspora based out of Europe where there is strong economic activity.

Traditional payment methods remain commonly used channels while digital transactions consist of only 5% of the market. This is a clear opportunity for cross-border payment companies to support the need to remit funds into Morocco. A major Moroccan bank, Banque Centrale Populaire Maroc (BCP) recently launched PayTracker for its customers which allows real-time international transaction tracking. Wafacash, a Casablanca-based transfer house partnered with World Remit in 2017 for international transfers where remittances fuels its proposition.

Fintech is on the rise. A 2022 McKinsey report on African fintech indicated Morocco is one of top states on the continent for the industry to grow in the next few years. Bank Al-Maghrib is a supporter of local Fintech, encouraging digital adoption in the financial sector. As part of the Bank Al-Maghrib’s national strategy, financial inclusion remains a priority. When we take a look at payments, an interesting picture emerges:

  • Cash is still dominant. In 2021, 74% of payments were made in cash, including utility bills and remittances. Yet, Moroccans are starting to move away from cash slowly, with 11% of consumers indicating that they’ve used cash less in the past 12 months (when compared to previous years). 

  • Major card schemes, Visa and Mastercard are widely accepted.

  • Mastercard’s New Payments Index 2022 reports at least one new payment method has been used by 75% of Moroccans in the past year. This may include money transfer apps (24%), tap-and-go smartphone wallets (20%) and buy now pay later (BNP) instalments (10%).

  • Banking infrastructure is developed however personal banking is not extremely popular. Some unbanked Moroccans have indicated that insufficient funds are the main reason for remaining unbanked. 

  • A PPRO e-commerce report recently indicated 17% of online purchases are card transactions. A remainder of payments are either cash or alternative online payment methods. Sixty percent of online purchases are completed via a mobile device. Moroccan ecommerce is growing, currently estimated at $2 billion and by 2027, it is expected to total $3 billion. 

  • In 2018, Bank Al-Maghrib and the National Telecommunications Regulatory Authority launched the mobile payment platform, M-Wallet designed to promote digital payments. Other telecoms have developed mobile money solutions which have seen a slow uptick in recent years, largely in rural areas. Mobile money is an attractive market due to the mature mobile market and largely underbanked population. 

  • Of the estimated 40 Fintechs, the most developed verticals are payments, remittances and point-of-sale (POS) networks. Namely, Invyad provides a POS solution for SMEs. Inwi Money and HmizatePay offer mobile money, while OnePay was launched in 2020 offers payment aggregation services. 

  • Earlier this year, local banks -  Crédit Immobilier et Hôtelier (CIH) and Groupe Crédit Agricole du Maroc - launched Apple Pay to support the digital transformation of their card services. 

  • Strengthening its economic integration with the Arab states, Bank Al-Maghrib recently confirmed a membership with the Arab Regional Clearing and Settlement system, Buna.

Bank Al-Maghrib is the regulatory authority which oversees the payment and banking activities in the kingdom. The Revised Banking Law of 2015 introduced a new era for payments through the enablement of a new type of payment service provider: Payment Institutions (PI). This allows non-banking institutions to apply for a PI licence which enables electronic money services, payment transactions, remittances and payment processing. Foreign critics believe this is a positive step as Morocco matches international practices. An advantage for any PI operating in Morocco is that they are allowed to collect deposits into a payment account. The regulation details three account levels:

  1. up to MAD 200,

  2. from MAD 200 to MAD 5,000 and from

  3. MAD 5,000 to MAD 20,000.

These levels directly determine the compliance processes such as know your customer (KYC) as well as specific measures against money laundering and terrorist financing. Capital requirements for PIs is MAD 6 million and for those approved to offer other payment services, as defined in article 16 of the banking law, must have a minimum capital of MAD 10 million.

Morocco has made progress in its goal of financial inclusion and development. In the payments arena, modernised regulations and a growing number of payment solutions are positive indicators for the market trajectory. Significant potential lies in the demand for remittance corridors and local payment options. If Morocco is on your expansion roadmap, reach out to the Fuse team to unlock payments.

The Kingdom of Morocco (Arabic; المغرب) is situated in North Africa, across the Strait of Gibraltar from Spain. The constitutional monarchy sits at a bridge between the Atlantic Ocean and the Mediterranean Sea. Morocco is led by King Mohammed VI (Head of State) and Aziz Akhannouch (Prime Minister). The capital, Rabat is built along the Atlantic coast while its largest port and commercial hub is the city of Casablanca. Boasting a rich history and local tourist sights attracts visitors from across the globe. Local souks in the ancient city, Fès (now marked as a UNESCO World Heritage site) are some of the most prized in the region. Historically, Morocco has been a crucial centre for commerce due to its key positioning along trade routes across MENA and Europe.

Map of Morocco

Kicking off with the macroeconomic landscape, growth and stability are evident. The World Bank reported the nominal gross domestic product (GDP) for 2022 at $134.18 billion. This year, it is forecasted that the GDP will close out between $138.781 billion and $147.34 billion. This is after the economy contracted in 2022 due to effects from the global pandemic. However, tourism has rebounded to pre-Covid levels and steady exports have supported a recovery. Specifically, the agricultural sector is predominantly driving GDP growth. Since the 1980s, the government has undergone efforts to privatise and reform the economy as supported by the IMF and World Bank. To add, a Special Commission on the Development Model (SCDM) report determines the economy needs to evolve from a “low-value-added economy” to a “diversified competitive economy, supported by a vibrant fabric of innovative and resilient enterprises” with job creation (particularly for women and youth) and economic growth at the forefront. In 1999, a public loan fund was set up for small businesses to encourage growth and entrepreneurship.

The Moroccan Dirham (DH) is the state’s official currency which is regulated by Bank Al-Maghrib (Morocco’s central bank). Its value is calculated by a predetermined basket consisting of US dollars and Euros, which fluctuates in line with the underlying currencies. Given the currency fluctuations, Bank Al-Maghrib has pursued a targeted inflation rate within the monetary policy. Since independence, the kingdom has maintained political pluralism and economic liberalism. Such economic openness encourages multilateral trade, foreign investment and securing Morocco’s place in the world economy. Foreign direct investment to the kingdom sits at an impressive  9% of total inflows to Africa, making it one of the top recipients of the continent.

The population is estimated at around 37 million people, with a median age of 29 years old. Young adults (ages 15 - 29) constitute roughly 26% of the total population, a smaller percentage when compared with other countries across MENA. Tamazight, a language of the Amazigh people, and Arabic are both official languages while French and Spanish are also widely spoken across the land. It’s reported that 63% of Moroccans are urbanised. Based on World Bank data, just under half of Morocco’s adult population (44%) were banked in 2021 which had risen from 27% back in 2017: Morocco sits behind the UAE, Saudi and Jordan. Tech adoption is steadily increasing. Mobile phone penetration is around 50.2 million and internet connections totals 33.18 million. The kingdom has the 4th largest online population in Africa, behind Nigeria, Egypt, and South Africa.

Western Europe required rebuilding after World War II. Many blue collar Moroccan workers emigrated, contributing to the significant diaspora population today. It is estimated that 15% (~ 5 million) of the population live abroad, with the majority still based in Europe — 33% in France, 26% in Spain and 16% in Italy. In turn, the personal remittance market is sizable. For 2022, the inflow of remittances received accounted for 8.3% of the GDP. Morocco ranks second to Egypt as the leading recipient of remittances in MENA. A report by the World Bank established that the remittances are driven by diaspora based out of Europe where there is strong economic activity.

Traditional payment methods remain commonly used channels while digital transactions consist of only 5% of the market. This is a clear opportunity for cross-border payment companies to support the need to remit funds into Morocco. A major Moroccan bank, Banque Centrale Populaire Maroc (BCP) recently launched PayTracker for its customers which allows real-time international transaction tracking. Wafacash, a Casablanca-based transfer house partnered with World Remit in 2017 for international transfers where remittances fuels its proposition.

Fintech is on the rise. A 2022 McKinsey report on African fintech indicated Morocco is one of top states on the continent for the industry to grow in the next few years. Bank Al-Maghrib is a supporter of local Fintech, encouraging digital adoption in the financial sector. As part of the Bank Al-Maghrib’s national strategy, financial inclusion remains a priority. When we take a look at payments, an interesting picture emerges:

  • Cash is still dominant. In 2021, 74% of payments were made in cash, including utility bills and remittances. Yet, Moroccans are starting to move away from cash slowly, with 11% of consumers indicating that they’ve used cash less in the past 12 months (when compared to previous years). 

  • Major card schemes, Visa and Mastercard are widely accepted.

  • Mastercard’s New Payments Index 2022 reports at least one new payment method has been used by 75% of Moroccans in the past year. This may include money transfer apps (24%), tap-and-go smartphone wallets (20%) and buy now pay later (BNP) instalments (10%).

  • Banking infrastructure is developed however personal banking is not extremely popular. Some unbanked Moroccans have indicated that insufficient funds are the main reason for remaining unbanked. 

  • A PPRO e-commerce report recently indicated 17% of online purchases are card transactions. A remainder of payments are either cash or alternative online payment methods. Sixty percent of online purchases are completed via a mobile device. Moroccan ecommerce is growing, currently estimated at $2 billion and by 2027, it is expected to total $3 billion. 

  • In 2018, Bank Al-Maghrib and the National Telecommunications Regulatory Authority launched the mobile payment platform, M-Wallet designed to promote digital payments. Other telecoms have developed mobile money solutions which have seen a slow uptick in recent years, largely in rural areas. Mobile money is an attractive market due to the mature mobile market and largely underbanked population. 

  • Of the estimated 40 Fintechs, the most developed verticals are payments, remittances and point-of-sale (POS) networks. Namely, Invyad provides a POS solution for SMEs. Inwi Money and HmizatePay offer mobile money, while OnePay was launched in 2020 offers payment aggregation services. 

  • Earlier this year, local banks -  Crédit Immobilier et Hôtelier (CIH) and Groupe Crédit Agricole du Maroc - launched Apple Pay to support the digital transformation of their card services. 

  • Strengthening its economic integration with the Arab states, Bank Al-Maghrib recently confirmed a membership with the Arab Regional Clearing and Settlement system, Buna.

Bank Al-Maghrib is the regulatory authority which oversees the payment and banking activities in the kingdom. The Revised Banking Law of 2015 introduced a new era for payments through the enablement of a new type of payment service provider: Payment Institutions (PI). This allows non-banking institutions to apply for a PI licence which enables electronic money services, payment transactions, remittances and payment processing. Foreign critics believe this is a positive step as Morocco matches international practices. An advantage for any PI operating in Morocco is that they are allowed to collect deposits into a payment account. The regulation details three account levels:

  1. up to MAD 200,

  2. from MAD 200 to MAD 5,000 and from

  3. MAD 5,000 to MAD 20,000.

These levels directly determine the compliance processes such as know your customer (KYC) as well as specific measures against money laundering and terrorist financing. Capital requirements for PIs is MAD 6 million and for those approved to offer other payment services, as defined in article 16 of the banking law, must have a minimum capital of MAD 10 million.

Morocco has made progress in its goal of financial inclusion and development. In the payments arena, modernised regulations and a growing number of payment solutions are positive indicators for the market trajectory. Significant potential lies in the demand for remittance corridors and local payment options. If Morocco is on your expansion roadmap, reach out to the Fuse team to unlock payments.

George Davis, Fuse Co-Founder & CEO
George Davis, Fuse Co-Founder & CEO

George Davis

, Co-Founder & CEO

at Fuse

George is a serial entrepreneur and founder of Fuse, based in Dubai, and is a self proclaimed payments nerd.

George Davis

, Co-Founder & CEO

Co-Founder & CEO

at Fuse

Fuse

George is a serial entrepreneur and founder of Fuse, based in Dubai, and is a self proclaimed payments nerd.

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