RIYADH: Buy now pay later companies are playing a pivotal role in strengthening the fintech sector in the Middle East and North Africa region with customers using this option daily, according to experts. 

During a panel discussion at the 24 Fintech conference in Riyadh on Sept. 3, Rachel Shackman, JP Morgan’s head of non-banking financial institutions in the MENA region, said BNPL firms are also taking away market share from credit cards. 

In August, a study carried out by Irish-based firm Research and Markets echoed similar views and highlighted that BNPL payments in the region are expected to grow by 22.3 percent annually to reach $9.2 billion in 2024.

According to the report, the market is poised to grow at an accelerated pace in MENA markets over the medium term, driven by rising credit demand among consumers of all age groups. 

“BNPL companies in this region have been fantastic. Their offerings are incredibly innovative, and they’re being used not just for large ticket items, which you’d expect, but also the day-to-day spend,” said Shackman. 

She added: “The UAE is still very credit card dominated, predominately because of the points customers will get for a purchase. But BNPL companies are actually taking market share away from credit cards.” 

Shackman further underscored that BNPL companies are very customer-friendly, which has forced traditional banks to think like these firms and adapt to current needs. 

During the same panel discussion, Remo Abbondandolo, general manager of Checkout.com in the MENA region, said that the fintech landscape in Saudi Arabia is quickly changing due to the progressive initiatives spearheaded by the Saudi Central Bank, also known as SAMA. 

“The fact that things tend to change very quickly in Saudi. We can see today that SAMA has made a few announcements, it really showcases that there is more and more openness to allow more innovation and thus more fintech,” added Abbondadolo. 

During the 24 Fintech conference on Sept. 3, Saudi fintech startups XSquare, NeotTek, and MoneyMoon received permits from SAMA to test their solutions in its regulatory sandbox. 

SAMA also unveiled a new agreement with Samsung to launch Samsung Pay in Saudi Arabia by the fourth quarter of this year during the event.

In a press statement, the apex financial institution revealed that the service will enable users to easily store and manage their digital payment cards within the Samsung Wallet application.