The news: Mastercard signed two deals focused on expanding digital payments solutions in the Middle East and Africa.
Why it’s worth watching: Digital payments are quickly gaining steam in the Middle East and Africa amid declining cash use. Despite having the highest cash penetration of any global region, the Middle East and Africa witnessed a sharp 16.3% year-over-year (YoY) drop in cash payments in 2021, per FIS. And between 2021 and 2025, the share of point-of-sale payments made with cash is expected to tumble 42% YoY.
Mastercard’s recent partnerships—including a separate tie-up with Nigerian fintech OPay that took place earlier this month—add to a growing list of payment deals occurring in the market. Discover, PayPal, and Visa are among the international providers that have pursued the Middle East and Africa through tie-ups with local fintechs in the last year. We predict multinational providers will shift their focus from partnerships to acquisitions in 2022 to scale faster.
The big takeaway: Mastercard can use its card and mobile wallet tie-ups to gain a stronger foothold in the Middle East and Africa as the region continues to digitize.
Cards may have a longer-term growth trajectory as more consumers enter the banking ecosystem. But mobile wallets are likely to see strong growth in the short term thanks to the prevalence of mobile money accounts and growing mobile phone penetration. What’s more, the Middle East and Africa are expected to see the fastest growth (+12.9% YoY) in proximity mobile payment penetration in 2022, per Insider Intelligence forecasts.
Related content: Check out “Insider Intelligence’s Payments Trends to Watch in 2022” report to learn about other key topics we’re keeping an eye on and how we think they’ll develop this year.
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