Bahrain’s Cashless Payments Surged by 65% In August

New data from the Central Bank of Bahrain (CBB) has revealed how the number of POS and eCommerce transactions in the country sky-rocketed by 65% in August, reaching a total value of nearly $744 million during the month; after topping $3.62 billion in the first half of 2021.

According to the latest figures, there were more than 11.3 million digital transactions in Bahrain during the month of August, valued at BD279.6 million ($743.7 million). The value of eCommerce and point-of-sale (PoS) payments rose by 50% in August 2021 when compared to the same month last year. The data also shows how there were more than 53 million digital payments in the first half of 2021.

The figures reflect the trend in the rest of the GCC, which is currently experiencing a region-wide surge in online and digital payments as countries accelerate their transition towards cashless societies in the wake of the pandemic.

Lockdowns last year caused a dramatic shift towards digital payment systems. Bahrain’s national electronic wallet, BenefitPay, announced a 785% increase in the number of remittances through its Fawri+ service (an online payment service introduced under the Electronic Funds Transfer System) in 2020 – exceeding $5 million. And research from the European Payments Council indicates that the MENA region will process around 139 billion individual non-cash transactions in 2022, which is 90 billion more than five years ago.

Bahrain is among the leaders of the Middle East’s march towards a paperless financial system, thanks to its innovative regulation of Fintech. Bahrain boasts some of the world’s most advanced digital infrastructure and has produced several leading start-ups that are disrupting the region’s digital payments infrastructure.

Dalal Buhejji, Executive Director of Business Development Investment Origination at the Bahrain Economic Development Board said, “Even before the pandemic, the GCC was embracing digital and mobile banking and payments. Bahrain has anticipated the trends that were catalysed by the pandemic. The Kingdom has a proven track record of reacting quickly to embrace emerging financial technologies and flexibly regulate them. An example of our forward-thinking regulatory framework is the way the Kingdom mandated the adoption of open banking. Our regulatory approach, along with our advanced digital infrastructure, is why we are at the forefront of developing the technologies, solutions and ecosystems that will form the future of the region’s digital economy.”

Reforms to open banking are expected to have broad ramifications for the payments business, according to a recent survey from McKinsey, published on the 23rd of August. When respondents to the survey were asked what government or regulatory-driven action would be most effective in steering customers to digital payments, 27% nominated regulatory approval for open banking. In 2018, Bahrain made a leap forward in the financial services sector, issuing open banking rules, followed by a framework with guidelines on data sharing and governance in 2020.

Source: The FinTech Times.