While some governments around the world have struggled to keep up with the digital age, many Middle Eastern countries have risen to the challenge and introduced market-leading innovations. E-government is one area that has taken off in a big way in the region in recent years, with successful initiatives in the United Arab Emirates (UAE), the Kingdom of Saudi Arabia, Qatar, Oman, Kuwait and Bahrain. Specifically, the UAE witnessed the highest jump in the world e-government development ranking from number 49 in 2010 to 28 in 2012. Dubai’s ‘Smart Government’ is one of the country’s many e-government success stories, having earned a United Nations Public Service Award in 2013. There is now an opportunity to bring further benefits to businesses and consumers by investing in the region’s payments infrastructures to complement these wider initiatives.       

In the main, the Middle East has a developing yet fragmented payments ecosystem, with high cash and cheque volumes coupled with rapid growth in card transactions. There is therefore an opportunity to increase the scope and efficiency of clearing and settlement infrastructures and increase access to these infrastructures. At the heart of this is the requirement to invest in real-time payments systems. The benefits from these will include a reduction in the costs of doing business in the region and convenient secure access to payments systems for banked and unbanked consumers, businesses and government.   

The launch of a national real-time payments service, such as FAST which has recently gone live in Singapore or the Faster Payments Service which launched in the UK in 2008, provides the core infrastructure which can support a range of new banking and payment services that could be introduced in the Middle East. At a macro level, the introduction of such technology offers tangible benefits to a national economy by increasing liquidity and efficiency of the payments system, which in turn will support GDP growth. These benefits will have a particularly positive impact on government (in the form of increased taxes and lower costs to the treasury or finance ministry), but will also have applicable benefits to central banks and other payments industry stakeholders.

Mobile technology is a further catalyst for major change and opportunity around the world. The Middle East has an advantage here. According to a recent survey by Google, the Gulf Co-operation Council’s mobile penetration rates are estimated at 180 per cent, higher than that of Russia at 160 per cent, USA at 108 per cent and China at 78 per cent. There is therefore great opportunity to exploit this high mobile penetration to develop overlay or valued-added payment services for all citizens.