BNPL Emerges as New Favorite Payment Option in MENA-Pakistan

BNPL Emerges as New Favorite Payment Option in MENA-Pakistan

In the Middle East, North Africa and Pakistan (MENAP) region, exponential growth in the e-commerce market is fueling the rise of newer methods of paying, with buy now, pay later (BNPL) arrangements, in particular, emerging as the new favorite payment method.

A survey of more than 13,000 consumers in MENAP conducted by, a payment solution provider supporting businesses, found greater penetration of BNPL arrangements in MENA (24%) than in the UK and Europe (23%) in 2021.

Across MENAP, adoption of BNPL arrangements in 2021 was found to be the highest in Saudi Arabia, where 39% of respondents indicated having used BNPL in the past 12 months, followed by Qatar (34%) and Egypt (28%).

In the United Arab Emirates (UAE), while penetration only stood at 21%, consumers showed openness to using the payment method. 31% of UAE consumers who indicated having never used BNPL before, said they planned to do so in the next 12 months. A similar trend was observed in Jordan and Bahrain, where the figure stood at 31% and 29%, respectively.

BNPL penetration across MENAP, Source:, 2021

BNPL penetration across MENAP, Source:, 2021 forecasts BNPL penetration in MENAP to continue growing and reach 53% this year.

Forecast BNPL penetration for 2022, Source:, 2021

Forecast BNPL penetration for 2022, Source:, 2021

Rise of digital payments

The rise of BNPL arrangements in MENAP is part of a broader shift towards digital payments. In 2021, 60% of consumers in the region indicated preferring to pay for e-commercia via a digital payment method, a 20% increase from 2020. 76% of respondents reported using some form of fintech app in the past year, and 81% said they felt they directly benefiting from the region’s growing fintech sector.

Across MENAP, preference for digital payment methods is growing, the data show, with Bahrain (87%), Qatar (82%) and (74%) recording the highest rates in 2021.

% of MENA consumers who prefer to pay for ecommerce via a digital payment method, Source:, 2021

% of MENA consumers who prefer to pay for ecommerce via a digital payment method, Source:, 2021

While in MENAP, preference for digital payments is growing, the use of cash on delivery is declining substantially. Data from Visa show that, in Kuwait and Egypt, cash use for e-commerce in 2021 dropped by 88% and 85%, respectively.

Booming e-commerce market

MENAP’s e-commerce market has been experiencing massive growth these past couple of years, a trend which industry observers expect to continue moving forward.

Research from Dubai CommerCity (DCC), a dedicated e-commerce free zone in the Middle East, Africa and South Asia (MEASA), estimates a compound annual growth rate (CAGR) of 18.4% for MEASA’s e-commerce market between 2019 and 2022, a figure that stands higher than the global 16.6% growth rate. MEASA’s e-commerce market is projected to reach US$148.5 billion this year.

In the region, South Asia presents the largest sub-regional e-commerce market size, with India the largest country by e-commerce sales, valued US$45.7 billion in 2019. The Gulf Cooperation Council (GCC), meanwhile, is projected to be the fastest growing sub-regional market over the forecast period, with Saudi Arabia and the UAE recording the strongest growth rates (39% and 38%, respectively).

These trends echo findings from research from, which found that by mid-2021, 95% of consumers in Saudi Arabia and the UAE were shopping online, with 29% doing so weekly or even daily.

Pakistan as the next e-commerce battleground

In Pakistan, the central bank estimates that, in Q3 2021, e-commerce transactions recorded an impressive quarter-over-quarter (QoQ) growth of 87% by volume and 21% by value. During the quarter, 12.7 million e-commerce related transactions amounting to PKR 22.3 billion (US$109 million) were conducted using digital payment channels.

In comparison, consumers carried out a total of 21.9 million online transactions worth PKR 60.6 billion (US$296 million) for the whole fiscal year ended June 30, 2021.

These figures suggest that H2 2021-2022 could see e-commerce and digital payment volumes surge and surpass previous levels.

Pakistan fast-growing e-commerce and digital payment markets are further evidenced by the increasing number of foreign players entering the market this year by either backing domestic e-commerce platforms or acquiring local players.

In March, Saudi Arabia-based business-to-business (B2B) e-commerce platform Sary took a stake in Pakistani B2B e-commerce platform Jugnu, calling the country “a strategic market” in its ambition of becoming the leading B2B e-commerce platform in emerging markets.

In May, Swiss-based buy now, pay later (BNPL) startup ZoodPay acquired Pakistani consumer lending company Tez Financial Services (Tez). Founded in 2018, ZoodPay is a digital lending platform for e-commerce that claims more than 10 million users across six countries, including Iraq, Jordan and Lebanon.

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