The Cards and Payments Industry in Egypt: Emerging trends and opportunities to 2020
Summary
Egypt’s credit card market is still in its early stages of development, with a penetration of 3.5 cards per 100 individuals in 2016. The level of credit card penetration remains low primarily due to religious reasons (as Islam forbids interest), fear of falling into debt, and low acceptance among Egyptian merchants. Strict guidelines for credit cards have also contributed to the low adoption. Banks are cautious when issuing credit cards and require details of income and credit history. Credit card issuance has certain requirements and limitations in terms of age and income level.
Egypt remains a cash-driven society, with cash accounting for 95.7% of the overall payments volume in 2016. Cash is mainly used for small-value payments in both rural and urban areas. The payment card penetration in Egypt stood at 22.6 cards per 100 individuals in 2016, the lowest in comparison to its peer countries such as South Africa, Morocco, and Kenya. Factors driving this low payment card penetration include the large unbanked population combined with lack of financial awareness. With the government working towards improving financial inclusion and financial infrastructure in the country, the use of payment cards is expected to increase over the forecast period (2016-20f).
Debit card penetration in Egypt stood at 19.1 cards per 100 individuals in 2016, lower than peer countries South Africa with 90.2, Morocco with 37.4, Kenya with 24.4, and Nigeria with 22.0. The Central Bank of Egypt, however, has been making efforts to promote payments cards. One such initiative in collaboration with the Ministry of Finance is a project launched in 2011 to pay 5 million government employees their salaries directly into their bank accounts. The funds can then be withdrawn using debit cards.
Despite limited financial literacy and payment infrastructure, and a large rural population, Egypt’s e-commerce market grew significantly between 2012 and 2016, from $1.2bn (EGP22.5bn) to $3.1bn (EGP55.9bn) at a review-period CAGR of 25.6%. The market is anticipated to reach $6.6bn (EGP119.7bn) by 2020.
The report “The Cards and Payments Industry in Egypt: Emerging trends and opportunities to 2020” provides detailed analysis of market trends in the Egyptian cards and payments industry. It provides values and volumes for a number of key performance indicators in the industry, including credit transfers, payment cards, cash, and cheques during the review-period (2012-16e).
In particular, this report provides the following analysis –
– Current and forecast values for each market in the Egyptian cards and payments industry, including debit and credit cards.
– Detailed insights into payment instruments including credit transfers, cash, cheques, and payment cards. It also, includes an overview of the country’s key alternative payment instruments.
– E-commerce market analysis and payment methods.
– Analysis of various market drivers and regulations governing the Egyptian cards and payments industry.
– Detailed analysis of strategies adopted by banks and other institutions to market debit and credit cards.
Companies mentioned in this report: Arab African International Bank, Commercial International Bank, Egyptian Banks Company, National Bank of Egypt, Banque Misr, Qatar National Bank, ALEXBANK-Intesa Sanpaolo, HSBC, Crédit Agricole Egypt, 123 Network, Visa, Mastercard.
Scope
– To replenish depleting foreign reserves and reduce illegal foreign currency trading in the country, the central bank directed banks to adopt measures to regulate the international use of Egyptian pound-denominated debit cards in 2016. Every bank must enforce a cap on payment card transactions and cash withdrawal limits for international transactions. Following the announcement, Crédit Agricole Egypt banned the use of Egyptian pound-denominated debit cards abroad with effect from September 1, 2016. Likewise, CIB has reduced the limit on oversees spending on Egyptian pound-denominated debit cards. The maximum monthly purchase limit of its Classic, Titanium, and Platinum cards are $50 (EGP906.60), $150 (EGP2,719.90), and $300 (EGP5,439.70) respectively.
– Alternative payments are slowly gaining prominence in Egypt. Visa in association with QNB Alahli Bank launched its mobile payment solution mVisa in Egypt in May 2017. The service allows users to make in-store payments by scanning a QR code or entering the merchant’s identification number. Banque Misr launched its mobile wallet BM Wallet in February 2017, allowing customers to transfer funds to individuals in Egypt, withdraw cash, make utility bill payments, and conduct in-store purchases at participating merchants. Similarly, CIB introduced its Smart Wallet in January 2016, allowing customers to conduct purchases, make utility bill payments, and pay for ticketing and mobile recharges.
– To increase financial inclusion and promote electronic payments, the Central Bank of Egypt introduced new regulations on mobile payment services in November 2016. Banks must now employ agents in remote areas to provide banking services to unbanked and low-income individuals. Users can transfer funds from their mobile account to other accounts within the same bank. Additionally, micro-enterprises and small merchants can receive payments from customers on their mobile accounts. The service enables consumers to receive cross-border family remittances on their mobile accounts, and the money transferred can be disbursed by beneficiaries through agents.
Reasons to buy
– Make strategic business decisions, using top-level historic and forecast market data, related to the Egyptian cards and payments industry and each market within it.
– Understand the key market trends and growth opportunities in the Egyptian cards and payments industry.
– Assess the competitive dynamics in the Egyptian cards and payments industry.
– Gain insights into marketing strategies used for various card types in Egypt.
– Gain insights into key regulations governing the Egyptian cards and payments industry.
