Pandemic brings surge in business for Middle East’s fintechs

Pandemic brings surge in business for Middle East’s fintechs

Some of the world's strictest lockdowns and restrictions were imposed across the Gulf states to combat coronavirus. They caused havoc across oil-reliant economies already hit by low crude prices.

But, as elsewhere around the world, the region's emerging technology firms were big beneficiaries from a surge in ecommerce activity as customers sheltered at home.

The payment platforms behind the shift from bricks-and-mortar to digital commerce have dominated the region's emerging fintech scene, some supported by larger telecoms companies. Early last year, e-payments surged in Saudi Arabia, the Gulf's largest market, after customers were allowed to use debit cards “” rather than less-common credit cards “” for online transactions.

The burgeoning market has attracted overseas interest in the digital infrastructure underpinning financial technology. Western Union last month said it would invest up to $200m for a 15 per cent stake in STC Pay, the fast-growing payments arm of Saudi Telecom Company, the Riyadh-listed giant controlled by the kingdom's sovereign wealth fund.

Regional payments are dominated by Payfort, a Dubai-based start-up sold to Amazon in 2017, the same year that the US company became the region's dominant ecommerce player with the acquisition of local incumbent rival Souq.

Others are emerging as independent rivals