Small and medium enterprises (SMEs) across the Middle East and Africa are rapidly embracing digital payments, with over 90% now accepting cashless transactions, a new report by global payments giant Mastercard (NASDAQ: MA) has revealed.
The third edition of the SME Confidence Index highlights that despite global economic challenges, including conflicts in Europe and the Middle East and leadership transitions in major economies, SMEs have continued to record significant growth, driven by digitalisation.
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African SMEs lead digital payment adoption
Across Africa, SMEs are leveraging digital payment solutions to streamline transactions, enhance compliance, and reduce costs. Mastercard’s president for Eastern Europe, the Middle East, and Africa, Dimitrios Dosis, noted that digital transformation is unlocking new opportunities for businesses across the continent.
In Nigeria, digital payment adoption among SMEs stands at an impressive 99%, making it one of the highest in the region. The shift was accelerated by the country’s recent cash shortage, which pushed businesses and consumers toward digital alternatives. However, Nigeria’s central bank digital currency (CBDC), the eNaira, has struggled to gain traction despite the increased reliance on digital transactions. A newly launched naira-pegged stablecoin aims to change this trend.
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In East Africa, Kenya has also seen a strong embrace of digital payments, with 91% of SMEs integrating cashless transactions. The country’s mobile money ecosystem has played a pivotal role in this shift, particularly for cross-border trade. An International Monetary Fund (IMF) report earlier this year indicated that Kenyans transact millions of dollars in stablecoins to pay for imports from Asian markets.
Meanwhile, Northern Africa lags slightly behind, with Egypt reporting an 80% adoption rate. Mastercard’s president for Western Arabia, Adam Jones, emphasised that continued innovation in financial solutions will be critical for the country’s SMEs as they evolve.
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Middle East’s digital payment boom
The digital payments revolution is equally evident in the Middle East, where the United Arab Emirates (UAE) leads the region with a 91% SME adoption rate. Mastercard’s East Arabia president, J.K. Khalil, attributed this growth to the country’s supportive digital economy ecosystem, which has boosted business optimism and revenue projections for 2025.
Mastercard’s findings align with a separate report by Singapore-based fintech consultancy LeanTech, which found that nearly two-thirds of Middle Eastern residents prefer digital wallets over other payment methods. Credit cards came in a distant second at 17%, while cash usage has dwindled to just 3%, reinforcing the region’s shift towards a cashless economy.
As digital transformation continues to reshape commerce in the Middle East and Africa, SMEs are well-positioned to drive innovation, efficiency, and economic resilience through digital payments.
