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How money moves

How money moves in Qatar

Written by

George Davis

on

Nov 1, 2023

/

How money moves

How money moves in Qatar

Written by

George Davis

on

Nov 1, 2023

/

How money moves

How money moves in Qatar

Written by

George Davis

on

Dec 13, 2023

How money moves: QAT
How money moves: QAT
How money moves: QAT

The short version

In the last few years, Qatar has made significant progress to issue supportive payment regulations that encourage transformation in the industry. Hosting the recent Fifa World Cup and a post-Covid economic recovery has sparked innovation in the local payment landscape. A cosmopolitan population coupled with the government’s drive to encourage foreign business, has shown Qatar to be an attractive destination for expansion into the region.

The long version

For many across the globe, Qatar (Arabic: دولة قطر) brings two things to mind: the host nation of the FIFA World Cup ‘22 and home to one of the globe's top airlines. This independent emirate is a desert peninsula in the Persian Gulf, situated at the Eastern border of Saudi Arabia. The gulf state is a constitutional hereditary monarchy, ruled by Sheikh Tamim bin Hamad Al Thani since 2013. Its capital city Doha, was historically a pearling centre as Gulf pearls were popular amongst Western aristocracy. At the turn of the 20th century, 48% of the population were employed in the pearling industry. The economic focus swiftly shifted once the state discovered “black gold” in 1939, yet the rich pearling history still remains in the Qatari culture today - from iridescent pearl tiles in Doha’s metro stations, to the Pearl Monument at the entrance of the city’s Dhow Harbour and the annual pearl diving contest.

The local currency is the Qatari riyal, which is pegged at QR 3.64 to the US dollar. The currency peg is backed by the stability of the central bank (QCB) foreign currency reserves and the sovereign wealth fund, Qatar Investment Authority’s (QIA) foreign-currency assets. The QIA is focused on ensuring economic stability while stimulating development, including opportunities in venture capital, fintech, and sustainability. According to the IMF, the state’s gross domestic product (GDP) is estimated at $235.5 billion for 2023. The state is rich in natural gas reserves, being third in the world behind Russia and Iran. Hydrocarbons accounted for 36.8% of the GDP in 2021, with major exports to the UK, EU and China. 

In recent years, the GDP growth rate dipped due to tensions with its neighbours and the pandemic. However, the World Cup and the post-pandemic recovery plan helped boost the economy back on track with a growth rate of 4.8% for 2022. The World Cup brought in about $17 billion in revenue and $9 billion in profit for Qatar. As it stands, the state does not levy VAT or sales tax on operations and recently adjusted ownership laws to allow 100% foreign investment in local businesses, following a very similar strategy to that of the UAE (read more about the UAE in our recent article), creating a very attractive environment for international companies. A caveat is that this may change in line with the Gulf Cooperation Council (GCC) framework whereby a predicted 5% VAT may be declared in future.

Qatar is home to a relatively small population of 2.9 million people. Of this, only 10% are Qatari citizens, with Arabic being the official language, whilst Persian and Urdu are largely spoken by expat communities. Since the 1970s, there has been a significant influx of expats, largely construction workers, from Asia and other countries in the MENA region. In 2020, the outbound remittance market is calculated to be 6.7% of the state’s GDP. Money is mostly sent back to India, Egypt and Pakistan at $4.4 million, $1.7 million and $1.5 million in 2021 respectively.  Digital remittances are projected to reach $145.1 million by the end of this year at an annual growth rate of 9.29%. 

The primarily male expat population led to the national gender split being heavily skewed at 72% male, according to the Ministry of Development Planning and Statistics in 2020. Consequently, only 14% of the working population is female. However, an impressive 66% of Qatari students in tertiary education today are female. The average age is 33.8 years old and almost the entire population is urbanised. A recent PWC survey is a useful pulse check of the current mindset of the workforce in Qatar: the strong majority are Millennials (75%), well educated (77% with tertiary qualifications) and optimistic about the future. The survey reinforces that Qatar is a hub for highly skilled workers and innovation.

Looking forward, Qatar National Vision 2030 (QNV 2030) aspires to take Qatar from a “developed economy to an advanced country by 2030” with economic development as one of the key pillars of the plan. To support Qatar’s ambition to be a globalised economy, it established the Qatar Free Zones Authority (QFZA) in 2018 to enable tech transformation and give access to the region for foreign businesses. Earlier this year, the Google Cloud region launched in Doha to support both local private and public sectors to move into a digital economy, with a forecasted revenue boost of $18.9 billion within the current decade. Qatar has a dedicated focus on innovation in line with QNV 2030.

Payments in Qatar are also trailblazing in the region, which comes as no surprise as it has one of the leading internet and smartphone penetration rates across the Persian Gulf. 

Here’s a round up of how the state is taking strides to modernise payment options: 

  • Cash is still a feature of the current payment landscape in Qatar. Certain small traders add a surcharge for card payment options. 

  • To push towards cashless payment options, accelerated by the pandemic, Qatar Mobile Payment (QMP) launched in 2020 as the “first instant national interoperable switch for mobile payment services” by QCB. QMP’s main services are instant transfer and QR code payments. Subsequently, there has been a rise of local digital wallet options. CWallet is a solution for unbanked, low income migrant workers to receive salaries, remit payments back home and access prepaid cards.  Vodafone Qatar’s Infinity Payment Solutions (IPS) launched iPay - an e-wallet which offers instant bank transfers, merchant payments and international remittances. Samsung Wallet is now available for Mastercard customers for mobile payment services. 

  • Prepaid cards are the most popular digital payment option with 70% market share, followed by mobile payments (19%) and e-wallets (6%). Credit cards comprise only 4% of the market. The digital payment market is estimated to be $6.56 billion for 2023 with e-commerce being the main driver, and an annual growth rate of 12.4%. 

  • QCB integrated QR codes standards to enable both points of sale and public transport payments. 

  • Tap and go is a popular payment option for smartphone and smartwatch users which is widely accepted. Visa’s Pay with your Face was tested at various events during the Fifa World Cup, where customers could use facial biometrics to authenticate payments. The penetration of contactless payments deepened during the World Cup.

  • In 2022, Qatar National BanK (QNB) launched its own open banking platform, being the first in the country, as well as one of the leaders across the region.

In September 2021, QCB enforced their Payment Services Regulations (PSR) which oversees payment service providers (PSPs) in or from Qatar.

The following services are included in the PSR and require authorization:

  • E-money issuance;

  • Merchant acquiring services;

  • Local fund transfer service;

  • Other payment services such as providing a payment portal, account aggregation and settlement services.

Previously, these services were not explicitly regulated by the central bank. The QCB’s timing was deliberate, ahead of hosting the World Cup which Qatar intended to be a cashless event.

The capital requirement of PSR depends on the category of the licence. For payment companies which are looking to obtain a Category 2 licence and not hold customer funds (defined as other payment services), their capital requirement is QR 2 Million. For those that hold customer funds (defined as issuance of E-Money or merchant acquisition) requiring a Category 1 licence, their capital requirements depends on the volume of monthly transactions:

  • Small - less than 500 000 transactions: QR 2 million*

  • Medium - 500 000 to 1 million transactions: QR 5 million*

  • Large - more than 1 million transactions: QR 10 million*

    * or 2% of the average outstanding electronic money issued and the average outstanding merchant transactions acquired by the licensee for the preceding ninety days, whichever is higher.

Beyond PSR, QCB has also introduced the fintech regulatory sandbox in 2021 to encourage testing in a safe environment for startups. Last year, iPay was the first provider to receive a licence for digital payment services by QCB. 

Qatar is positioning itself as a hub for innovation and development - making waves in the region for payments. It’s an interesting market for international players to expand given its modern regulatory approach, digital transformation and cosmopolitan nation. If you’re looking to enter Qatar, contact our team to discuss how Fuse can help you unlock payments.

For many across the globe, Qatar (Arabic: دولة قطر) brings two things to mind: the host nation of the FIFA World Cup ‘22 and home to one of the globe's top airlines. This independent emirate is a desert peninsula in the Persian Gulf, situated at the Eastern border of Saudi Arabia. The gulf state is a constitutional hereditary monarchy, ruled by Sheikh Tamim bin Hamad Al Thani since 2013. Its capital city Doha, was historically a pearling centre as Gulf pearls were popular amongst Western aristocracy. At the turn of the 20th century, 48% of the population were employed in the pearling industry. The economic focus swiftly shifted once the state discovered “black gold” in 1939, yet the rich pearling history still remains in the Qatari culture today - from iridescent pearl tiles in Doha’s metro stations, to the Pearl Monument at the entrance of the city’s Dhow Harbour and the annual pearl diving contest.

The local currency is the Qatari riyal, which is pegged at QR 3.64 to the US dollar. The currency peg is backed by the stability of the central bank (QCB) foreign currency reserves and the sovereign wealth fund, Qatar Investment Authority’s (QIA) foreign-currency assets. The QIA is focused on ensuring economic stability while stimulating development, including opportunities in venture capital, fintech, and sustainability. According to the IMF, the state’s gross domestic product (GDP) is estimated at $235.5 billion for 2023. The state is rich in natural gas reserves, being third in the world behind Russia and Iran. Hydrocarbons accounted for 36.8% of the GDP in 2021, with major exports to the UK, EU and China. 

In recent years, the GDP growth rate dipped due to tensions with its neighbours and the pandemic. However, the World Cup and the post-pandemic recovery plan helped boost the economy back on track with a growth rate of 4.8% for 2022. The World Cup brought in about $17 billion in revenue and $9 billion in profit for Qatar. As it stands, the state does not levy VAT or sales tax on operations and recently adjusted ownership laws to allow 100% foreign investment in local businesses, following a very similar strategy to that of the UAE (read more about the UAE in our recent article), creating a very attractive environment for international companies. A caveat is that this may change in line with the Gulf Cooperation Council (GCC) framework whereby a predicted 5% VAT may be declared in future.

Qatar is home to a relatively small population of 2.9 million people. Of this, only 10% are Qatari citizens, with Arabic being the official language, whilst Persian and Urdu are largely spoken by expat communities. Since the 1970s, there has been a significant influx of expats, largely construction workers, from Asia and other countries in the MENA region. In 2020, the outbound remittance market is calculated to be 6.7% of the state’s GDP. Money is mostly sent back to India, Egypt and Pakistan at $4.4 million, $1.7 million and $1.5 million in 2021 respectively.  Digital remittances are projected to reach $145.1 million by the end of this year at an annual growth rate of 9.29%. 

The primarily male expat population led to the national gender split being heavily skewed at 72% male, according to the Ministry of Development Planning and Statistics in 2020. Consequently, only 14% of the working population is female. However, an impressive 66% of Qatari students in tertiary education today are female. The average age is 33.8 years old and almost the entire population is urbanised. A recent PWC survey is a useful pulse check of the current mindset of the workforce in Qatar: the strong majority are Millennials (75%), well educated (77% with tertiary qualifications) and optimistic about the future. The survey reinforces that Qatar is a hub for highly skilled workers and innovation.

Looking forward, Qatar National Vision 2030 (QNV 2030) aspires to take Qatar from a “developed economy to an advanced country by 2030” with economic development as one of the key pillars of the plan. To support Qatar’s ambition to be a globalised economy, it established the Qatar Free Zones Authority (QFZA) in 2018 to enable tech transformation and give access to the region for foreign businesses. Earlier this year, the Google Cloud region launched in Doha to support both local private and public sectors to move into a digital economy, with a forecasted revenue boost of $18.9 billion within the current decade. Qatar has a dedicated focus on innovation in line with QNV 2030.

Payments in Qatar are also trailblazing in the region, which comes as no surprise as it has one of the leading internet and smartphone penetration rates across the Persian Gulf. 

Here’s a round up of how the state is taking strides to modernise payment options: 

  • Cash is still a feature of the current payment landscape in Qatar. Certain small traders add a surcharge for card payment options. 

  • To push towards cashless payment options, accelerated by the pandemic, Qatar Mobile Payment (QMP) launched in 2020 as the “first instant national interoperable switch for mobile payment services” by QCB. QMP’s main services are instant transfer and QR code payments. Subsequently, there has been a rise of local digital wallet options. CWallet is a solution for unbanked, low income migrant workers to receive salaries, remit payments back home and access prepaid cards.  Vodafone Qatar’s Infinity Payment Solutions (IPS) launched iPay - an e-wallet which offers instant bank transfers, merchant payments and international remittances. Samsung Wallet is now available for Mastercard customers for mobile payment services. 

  • Prepaid cards are the most popular digital payment option with 70% market share, followed by mobile payments (19%) and e-wallets (6%). Credit cards comprise only 4% of the market. The digital payment market is estimated to be $6.56 billion for 2023 with e-commerce being the main driver, and an annual growth rate of 12.4%. 

  • QCB integrated QR codes standards to enable both points of sale and public transport payments. 

  • Tap and go is a popular payment option for smartphone and smartwatch users which is widely accepted. Visa’s Pay with your Face was tested at various events during the Fifa World Cup, where customers could use facial biometrics to authenticate payments. The penetration of contactless payments deepened during the World Cup.

  • In 2022, Qatar National BanK (QNB) launched its own open banking platform, being the first in the country, as well as one of the leaders across the region.

In September 2021, QCB enforced their Payment Services Regulations (PSR) which oversees payment service providers (PSPs) in or from Qatar.

The following services are included in the PSR and require authorization:

  • E-money issuance;

  • Merchant acquiring services;

  • Local fund transfer service;

  • Other payment services such as providing a payment portal, account aggregation and settlement services.

Previously, these services were not explicitly regulated by the central bank. The QCB’s timing was deliberate, ahead of hosting the World Cup which Qatar intended to be a cashless event.

The capital requirement of PSR depends on the category of the licence. For payment companies which are looking to obtain a Category 2 licence and not hold customer funds (defined as other payment services), their capital requirement is QR 2 Million. For those that hold customer funds (defined as issuance of E-Money or merchant acquisition) requiring a Category 1 licence, their capital requirements depends on the volume of monthly transactions:

  • Small - less than 500 000 transactions: QR 2 million*

  • Medium - 500 000 to 1 million transactions: QR 5 million*

  • Large - more than 1 million transactions: QR 10 million*

    * or 2% of the average outstanding electronic money issued and the average outstanding merchant transactions acquired by the licensee for the preceding ninety days, whichever is higher.

Beyond PSR, QCB has also introduced the fintech regulatory sandbox in 2021 to encourage testing in a safe environment for startups. Last year, iPay was the first provider to receive a licence for digital payment services by QCB. 

Qatar is positioning itself as a hub for innovation and development - making waves in the region for payments. It’s an interesting market for international players to expand given its modern regulatory approach, digital transformation and cosmopolitan nation. If you’re looking to enter Qatar, contact our team to discuss how Fuse can help you unlock payments.

For many across the globe, Qatar (Arabic: دولة قطر) brings two things to mind: the host nation of the FIFA World Cup ‘22 and home to one of the globe's top airlines. This independent emirate is a desert peninsula in the Persian Gulf, situated at the Eastern border of Saudi Arabia. The gulf state is a constitutional hereditary monarchy, ruled by Sheikh Tamim bin Hamad Al Thani since 2013. Its capital city Doha, was historically a pearling centre as Gulf pearls were popular amongst Western aristocracy. At the turn of the 20th century, 48% of the population were employed in the pearling industry. The economic focus swiftly shifted once the state discovered “black gold” in 1939, yet the rich pearling history still remains in the Qatari culture today - from iridescent pearl tiles in Doha’s metro stations, to the Pearl Monument at the entrance of the city’s Dhow Harbour and the annual pearl diving contest.

The local currency is the Qatari riyal, which is pegged at QR 3.64 to the US dollar. The currency peg is backed by the stability of the central bank (QCB) foreign currency reserves and the sovereign wealth fund, Qatar Investment Authority’s (QIA) foreign-currency assets. The QIA is focused on ensuring economic stability while stimulating development, including opportunities in venture capital, fintech, and sustainability. According to the IMF, the state’s gross domestic product (GDP) is estimated at $235.5 billion for 2023. The state is rich in natural gas reserves, being third in the world behind Russia and Iran. Hydrocarbons accounted for 36.8% of the GDP in 2021, with major exports to the UK, EU and China. 

In recent years, the GDP growth rate dipped due to tensions with its neighbours and the pandemic. However, the World Cup and the post-pandemic recovery plan helped boost the economy back on track with a growth rate of 4.8% for 2022. The World Cup brought in about $17 billion in revenue and $9 billion in profit for Qatar. As it stands, the state does not levy VAT or sales tax on operations and recently adjusted ownership laws to allow 100% foreign investment in local businesses, following a very similar strategy to that of the UAE (read more about the UAE in our recent article), creating a very attractive environment for international companies. A caveat is that this may change in line with the Gulf Cooperation Council (GCC) framework whereby a predicted 5% VAT may be declared in future.

Qatar is home to a relatively small population of 2.9 million people. Of this, only 10% are Qatari citizens, with Arabic being the official language, whilst Persian and Urdu are largely spoken by expat communities. Since the 1970s, there has been a significant influx of expats, largely construction workers, from Asia and other countries in the MENA region. In 2020, the outbound remittance market is calculated to be 6.7% of the state’s GDP. Money is mostly sent back to India, Egypt and Pakistan at $4.4 million, $1.7 million and $1.5 million in 2021 respectively.  Digital remittances are projected to reach $145.1 million by the end of this year at an annual growth rate of 9.29%. 

The primarily male expat population led to the national gender split being heavily skewed at 72% male, according to the Ministry of Development Planning and Statistics in 2020. Consequently, only 14% of the working population is female. However, an impressive 66% of Qatari students in tertiary education today are female. The average age is 33.8 years old and almost the entire population is urbanised. A recent PWC survey is a useful pulse check of the current mindset of the workforce in Qatar: the strong majority are Millennials (75%), well educated (77% with tertiary qualifications) and optimistic about the future. The survey reinforces that Qatar is a hub for highly skilled workers and innovation.

Looking forward, Qatar National Vision 2030 (QNV 2030) aspires to take Qatar from a “developed economy to an advanced country by 2030” with economic development as one of the key pillars of the plan. To support Qatar’s ambition to be a globalised economy, it established the Qatar Free Zones Authority (QFZA) in 2018 to enable tech transformation and give access to the region for foreign businesses. Earlier this year, the Google Cloud region launched in Doha to support both local private and public sectors to move into a digital economy, with a forecasted revenue boost of $18.9 billion within the current decade. Qatar has a dedicated focus on innovation in line with QNV 2030.

Payments in Qatar are also trailblazing in the region, which comes as no surprise as it has one of the leading internet and smartphone penetration rates across the Persian Gulf. 

Here’s a round up of how the state is taking strides to modernise payment options: 

  • Cash is still a feature of the current payment landscape in Qatar. Certain small traders add a surcharge for card payment options. 

  • To push towards cashless payment options, accelerated by the pandemic, Qatar Mobile Payment (QMP) launched in 2020 as the “first instant national interoperable switch for mobile payment services” by QCB. QMP’s main services are instant transfer and QR code payments. Subsequently, there has been a rise of local digital wallet options. CWallet is a solution for unbanked, low income migrant workers to receive salaries, remit payments back home and access prepaid cards.  Vodafone Qatar’s Infinity Payment Solutions (IPS) launched iPay - an e-wallet which offers instant bank transfers, merchant payments and international remittances. Samsung Wallet is now available for Mastercard customers for mobile payment services. 

  • Prepaid cards are the most popular digital payment option with 70% market share, followed by mobile payments (19%) and e-wallets (6%). Credit cards comprise only 4% of the market. The digital payment market is estimated to be $6.56 billion for 2023 with e-commerce being the main driver, and an annual growth rate of 12.4%. 

  • QCB integrated QR codes standards to enable both points of sale and public transport payments. 

  • Tap and go is a popular payment option for smartphone and smartwatch users which is widely accepted. Visa’s Pay with your Face was tested at various events during the Fifa World Cup, where customers could use facial biometrics to authenticate payments. The penetration of contactless payments deepened during the World Cup.

  • In 2022, Qatar National BanK (QNB) launched its own open banking platform, being the first in the country, as well as one of the leaders across the region.

In September 2021, QCB enforced their Payment Services Regulations (PSR) which oversees payment service providers (PSPs) in or from Qatar.

The following services are included in the PSR and require authorization:

  • E-money issuance;

  • Merchant acquiring services;

  • Local fund transfer service;

  • Other payment services such as providing a payment portal, account aggregation and settlement services.

Previously, these services were not explicitly regulated by the central bank. The QCB’s timing was deliberate, ahead of hosting the World Cup which Qatar intended to be a cashless event.

The capital requirement of PSR depends on the category of the licence. For payment companies which are looking to obtain a Category 2 licence and not hold customer funds (defined as other payment services), their capital requirement is QR 2 Million. For those that hold customer funds (defined as issuance of E-Money or merchant acquisition) requiring a Category 1 licence, their capital requirements depends on the volume of monthly transactions:

  • Small - less than 500 000 transactions: QR 2 million*

  • Medium - 500 000 to 1 million transactions: QR 5 million*

  • Large - more than 1 million transactions: QR 10 million*

    * or 2% of the average outstanding electronic money issued and the average outstanding merchant transactions acquired by the licensee for the preceding ninety days, whichever is higher.

Beyond PSR, QCB has also introduced the fintech regulatory sandbox in 2021 to encourage testing in a safe environment for startups. Last year, iPay was the first provider to receive a licence for digital payment services by QCB. 

Qatar is positioning itself as a hub for innovation and development - making waves in the region for payments. It’s an interesting market for international players to expand given its modern regulatory approach, digital transformation and cosmopolitan nation. If you’re looking to enter Qatar, contact our team to discuss how Fuse can help you unlock payments.

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

George Davis

, Co-Founder & CEO

at Fuse

George Davis

, Co-Founder & CEO

Co-Founder & CEO

at Fuse

Fuse

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