Online payments giant Stripe, is expanding to Dubai in its first move into the Middle East, weeks after their latest funding round, pushing it to become one of the most valuable private fintech firms in the world. Stripe's expansion to Dubai is exciting because it opens up new opportunities for more global brands to cater to the Middle East and North African region. It will also help local brands that haven’t yet globalized in expanding and serving a wider, global market.
The pandemic has fuelled the acceleration of eCommerce across the globe. And the UAE, (commonly referred to as Dubai), is no exception. This article covers:
Just 55 years ago, the UAE was a tiny fishing village before the discovery of oil which has helped to build this urban state. Fast Forward to this day, the UAE is known to be one of the urban miracles to the modern world and one of the top financial centres in the world. Its listed alongside other financial hubs such as London, New York, Hong Kong and Singapore.
The Middle East and North Africa’s booming FinTech market is expected to be worth $2.5 billion by 2022. The UAE alone accounts for 46% of all FinTech startups in the region, which marks it as the largest MENA hub for the industry. But this is not so surprising considering the UAE's:
More on that, Dubai’s International Financial Centre recently signed a landmark agreement with Israel’s FinTech-Aviv, with the objective to further support the UAE in facilitating economic growth from the technology and innovation sectors.
Altogether, the region has been witnessing a positive growth trend, and Stripe’s expansion seems like a highly strategic step towards facilitating digitalization in this thriving market. At the same time, Stripe is not the only payment giant to decide to expand into Dubai. Adyen for instance also announced launching in Dubai just over a few months ago.
Although there are several online payment gateways operating in the UAE, and a steadily increasing popularity of ApplePay, cash on delivery remains one of the most popular payment methods locally. But like the rest of the world, the pandemic has had a profound impact on the way people perceive online payments.
Prior to the COVID-19 pandemic, the value of e-commerce sales in the UAE was forecasted to reach $27 billion by 2022. However, new COVID-19 regulations have accelerated the growth of the industry, with online sales being the alternative to traditional shopping.
"The pandemic has had a profound impact on the way people perceive online payments"
Finally, if we look at the booming FinTech and eCommerce markets in the UAE, along with Adyen and Stripes strategic expansions, it becomes undeniable that Dubai and the MENA region are very promising markets. And while some might have doubts about the cultural fit, it is important to note that expats in the region account for around 80% of the population, and a survey revealed that 37% of those are European. That being said, the local tech talent pool has been steadily growing, which is why we don’t expect the cultural fit to be an issue here.
Considering how valued cash on delivery options are in the UAE, do you expect that to change with the expansion of payment providers in the region?
With non-cash-transactions continuing to surge, the world's central banks are working fast to create digital versions of national currencies. In the latest news, Japan said it aims to launch a yen-based digital currency in 2022. This digital currency will be backed by bank deposits and use a common platform to speed up large-scale fund transfers and settlements among companies. So what is the digital currency hype all about and what implications does this have for the world of payments?
Something peculiar is unfolding between Amazon and Visa. It’s not unusual for merchants to drop schemes and networks, so the news that Amazon is considering shifting its US co-brand credit card from Visa to Mastercard, is not particularly alarming…. but adding that they banned the use of Visa cards in the UK, raised Visa credit charges in Australia, and that they are incentivizing their customers to use other payments methods, then one starts to wonder:
Open banking, once introduced as a revolution in banking by allowing for free movement of customer financial data, is currently one of the hottest topics in FinTech Advocates say it could democratize data and fuel a fintech revolution. But…. reality often fails to live up to its potential and the dream, as open banking has been received with an underwhelming adoption rate, non-cooperating banks, and unimpressed regulators.