Positioning Your Business for Success in MEA’s Fast-Growing Ecommerce Market

The Middle East and Africa (MEA) region is set for substantial eCommerce growth, driven by advancements in digital payments, mobile adoption, and financial inclusion. As consumers explore new ways to pay and shop internationally, merchants are presented with significant opportunities to expand. However, navigating the complexities of this diverse market requires more than just offering products—partnering with a knowledgeable payment provider is essential to overcoming the unique challenges that expanding into the MEA region presents.

Why merchants should consider expanding into MEA

MEA’s eCommerce growth is being fueled by a tech-savvy, increasingly mobile population. In Saudi Arabia—the largest market in MEA—eCommerce is experiencing rapid expansion as digital payment adoption grows. Meanwhile, in the UAE, eCommerce sales are projected to rise from $10.3 billion in 2023to $16.3 billion by 2027, with mobile devices expected to account for 76% of these transactions. Moreover, alternative payment methods (APMs), such as Buy Now Pay Later (BNPL) and mobile wallets are rapidly gaining momentum across the region, providing new opportunities for merchants to attract and retain customers.

In addition, financial inclusion is making significant progress in other parts of MEA. Egypt has seen a notable increase in account ownership, growing from 37.8% to 52.8% over the past decade. This growth highlights the broader adoption of digital payment services, giving more consumers the opportunity to engage in the digital economy.

Meanwhile, cross-border eCommerce is thriving—accounting for 58% of online sales in the UAE in 2023, a figure expected to rise to 62% by 2027. These trends show the increasing demand for eCommerce solutions across both local and international markets.

Key challenges to expanding into MEA

· Diverse payment preferences: The many available payment methods across MEA mean merchants must offer a broad range of payment options to meet consumer expectations. Without this flexibility, they risk limiting their customer base and missing out on significant sales opportunities.

· Cross-border payments complexity: Cross-border transactions are a major area of growth in the MEA region, especially in countries like the UAE, where over half of eCommerce sales are from international customers. However, managing cross-border payments can be complicated due to currency conversion, varying regulations, heightened fraud risks, and lower auth rates. Merchants often face challenges in optimizing their payment acceptance rates for cross-border customers, and resolving these issues requires a streamlined payment system that minimizes friction.

· Fraud risk in emerging markets: As MEA eCommerce markets grow, the risk of fraud becomes a critical concern. Emerging markets are often more vulnerable to fraud due to varying levels of security infrastructure and awareness. Fraudulent activities can lead to significant financial losses and erode consumer trust, making it a challenge that merchants must address head-on when entering MEA markets.

· The importance of localized solutions: Localization is critical for success in MEA’s diverse markets. Merchants must tailor checkout pages to local consumer preferences by offering translations, trusted payment methods and local currencies (there are 41different currencies used in Africa alone). This helps build trust and improve conversion rates, especially for cross-border transactions where payment friction can lead to lost sales.

Overcoming challenges with the right payment partner

To successfully expand into MEA, partnering with an experienced payment provider is essential. An expert provider offers localized solutions and advanced technology to overcome the challenges of this diverse region:

· APMs and local expertise: A strong payment partner will integrate local APMs, contactless POS systems, and emerging technologies to meet region-specific needs. Merchants expanding into Saudi Arabia should support MADA, the country’s domestic card network, while those entering the UAE should prepare for Jaywan, the soon-to-launch local scheme. In South Africa, PayShap is set to drive real-time, secure transactions, boosting financial inclusion. Open banking is also gaining momentum across MEA, offering consumers more payment options and access to financial services.

Alongside these payment methods, optimizing payment flows is essential for ensuring smooth transactions, reducing friction, and improving acceptance rates, helping merchants maximize conversions and enhance customer experience.

· Seamless cross-border payments: Managing cross-border eCommerce transactions involves addressing currency conversion, regulatory differences, and the risk of fraud. A robust payment provider will offer solutions like payment orchestration, which automates the routing of payments and ensures compliance across multiple markets. This reduces friction for international customers and allows merchants to capitalize on the increasing demand for global goods.

· Advanced fraud prevention: Leading payment providers use AI-driven fraud detection to monitor transactions in real time, minimizing risks while maintaining a seamless shopping experience. The smart usage of 3DS can also help balance fraud reduction with minimal customer friction, ensuring security without disrupting the checkout process. With the region’s rapid growth in eCommerce activity, especially through mobile devices, protecting against fraud is critical to building consumer trust.

Success story: Boosting approval rates for a luxury UAE retailer

A luxury retailer in the UAE faced challenges with low payment approval rates due to an under-optimized payment system. By partnering with Nuvei, the retailer implemented smart routing and customized3DS rules, which resulted in a 30% increase in approval rates, from 60% to over90%. This not only reduced the number of declined transactions but also boosted revenue and enhanced customer satisfaction. The case illustrates the importance of working with an expert provider that understands the nuances of local payment systems in the region.

Conclusion

MEA’s eCommerce market offers vast opportunities, but merchants looking to expand must be prepared to navigate a complex landscape of diverse payment preferences, fraud risks, and cross-border complexities. By partnering with an expert payment provider, businesses can overcome these obstacles and unlock the full potential of this rapidly growing region. Tailored solutions and localized expertise are key to success in MEA’s evolving digital economy.

Originally published by The Paypers

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