While blockchain is still in its infancy in Egypt, digital payments have gained traction in recent years as the authorities have worked to encourage financial inclusion and cashless transactions. Around 43.1m people made $10.25bn worth of digital payment transactions in 2019, up 13% by value that year, according to a report from We Are Social and Hootsuite. The study found that 32% of adults had an account with a financial institution, 1.8% had a mobile money account, and 3.5% made purchases or paid bills online. Even so, cash transactions continue to dominate, with 60% of e-commerce transactions in 2019 completed using hard currency.
The Covid-19 pandemic – and the subsequent social-distancing and lockdown measures – contributed to further uptake of electronic payment methods. E-payment platform Fawry announced in September 2020 that its value grew by 300% to $1.3bn from its mid-March low. While some observers are unsure whether the shift will be permanent, the government is doing its part to encourage more people to adopt digital banking, set up e-wallets and otherwise reduce cash use. In this vein, the authorities intend to make the NAC the country’s first cashless city.
The MCIT is also working with the UN’s International Telecommunication Union, the World Bank, and the Bank for International Settlements’ Committee on Payments and Market Infrastructures to further its Financial Inclusion Global Initiative. Launched in 2019, the three-year programme aims to accelerate digital financial inclusion in developing nations. As part of the plan, Egypt targets an increase in the number of active mobile payment accounts in the country from roughly 20m in 2019 to 40m in 2021. Mobile wallets, too, have been targeted for expansion, as only around one-third of Egyptian adults have a bank account, but some 95% had a mobile subscription as of early 2020 – representing a large untapped market for mobile wallets.
At the business level, in January 2021 the Egyptian Financial Regulatory Authority launched the Digital Financial Inclusion 2021 initiative to boost the rate of non-cash payments in the economy, especially among smaller enterprises.
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