Over the past decade, Egypt has grown to have the highest number of Internet users in the Middle East, with more than 60% of the population online. However, despite the steady increase of e-commerce users, Egypt remains a cash centric society. More than 70% of customers still use cash for some of their e-commerce purchases.
Fortunately, the Egyptian government has taken some steps towards integrating cashless payments as part of its financial inclusion strategy. As defined by the World Bank Group, financial inclusion requires that “individuals and business have access to useful and affordable financial products and services that meets their needs—transactions, payments, savings, credit and insurance—delivered in a responsible and sustainable way.”
The Egyptian government has been actively working to support growth in the FinTech industry. Likewise, different players in the Egyptian market— investors, financial institutions, and startup incubators/accelerators — have shown great interest in developing and supporting innovative financial solutions.
Despite cultural barriers and limited infrastructure, Egypt is planning to make the New Administrative Capital the first Cashless City in the country. The Minister of Communication and Information Technology Amr Talaat has been working closely with Mastercard Vice President Michael Forman to formulate a long-term strategy in order to make the new capital a cashless city. On the other hand, Mastercard plans to boost their technological infrastructure in the New Administrative Capital to meet the government’s goal.
The government took the first step to build a cashless society, creating the National Council of Payments (NPC) in February 2017. The NPC aims to decrease the use of banknotes outside the banking system, as they work on developing a national payment system that achieves financial inclusion. Additionally, the Minister of Finance Mohamed Maait plans to convert payroll for all civil servants to e-payments. These huge governmental projects are complemented by small-scale and startup businesses that are creating innovative financial services to encourage individuals and companies to shift to cashless transactions.
To conclude, even though Egypt is still a cash-based economy, the next wave of payment technologies is coming our way! Now that both the government and private sector are fueling innovation in the FinTech industry, Egypt is expected to surpass the limitations of cash society to become the leading power in the world of digital payments in the MENA region.
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