Saifaddin Galal
Research Expert North Africa
Payment methods in Egypt- statistics & facts
Since the onset of the Russia-Ukraine war, Egypt's economic crisis has intensified. The nation is grappling with foreign currency shortages coupled with a significant rise in debt that is used to finance a number of mega-projects. In 2023, the debt to GDP ratio in Egypt was estimated at almost 96 percent, up from just over 80 percent in 2019. This strained the national currency, leading to its devaluation and consequently higher inflation. Nonetheless, the country is the largest receiver of remittances in Africa, which is economically beneficial although this simultaneously requires facilitation of innovative payment tools.
In a rapidly evolving digital age, Egyptians remain highly dependent on cash for their payment transactions. This comes as a result of the low banked population, cultural limits on banking women, public trust in fiat currency, and the large informal labor market among others. Nevertheless, Egypt is in the midst of a noticeable change affecting its financial sector. In 2023, its financial inclusion rate jumped to reach nearly 71 percent of the population, a substantial increase from around 27 percent in 2016. Such increase can partly be attributed to the rise in access to emerging payment methods. A survey conducted in 2022 revealed, that around 88 percent of the respondents embraced at least one alternative payment method, thereby slowly moving away from traditional ones.
As Egypt continues to navigate its economic challenges, advancements in financial inclusion and digital payments would offer a pathway toward greater economic stability and growth.
In a rapidly evolving digital age, Egyptians remain highly dependent on cash for their payment transactions. This comes as a result of the low banked population, cultural limits on banking women, public trust in fiat currency, and the large informal labor market among others. Nevertheless, Egypt is in the midst of a noticeable change affecting its financial sector. In 2023, its financial inclusion rate jumped to reach nearly 71 percent of the population, a substantial increase from around 27 percent in 2016. Such increase can partly be attributed to the rise in access to emerging payment methods. A survey conducted in 2022 revealed, that around 88 percent of the respondents embraced at least one alternative payment method, thereby slowly moving away from traditional ones.
How do Egyptians pay and transfer money?
When it comes to transferring funds, Egyptians still prefer to conduct it via banks. In 2023, around 71 percent of respondents in a survey had used banks to transfer funds in the last year. Moreover, people favored cash to make transactions at points of sale (POS), with around 72 percent reporting to do this. Additionally, as mobile phones are an integral part of everyday activities, the number of payments performed with a mobile device have increased. In 2023, the share of respondents paying through mobile phones jumped to 22 percent, from a mere eight percent, three years earlier.Can prepaid cards and emerging payment methods fill the gap?
Card payments are less common, as the ownership of cards is not widespread in Egypt. For instance, the penetration rate of debit cards amounted to just over 22 percent of the population, while the rate was significantly lower regarding individuals owning a credit card. In a bid to increase financial literacy and inclusion, and decrease the policy hurdles restricting individuals from opening a bank account, the Egyptian government has put out several initiatives to try and include the population in the financial sector. This ranks among the priorities of the government's Sustainable Development Strategy: Egypt's Vision 2030. In 2017, the government launched the national payment scheme, Meeza, and in 2022, the instant payment network, InstaPay. As a result, there was a noticeable rise in prepaid bank cards and mobile wallet owners.As Egypt continues to navigate its economic challenges, advancements in financial inclusion and digital payments would offer a pathway toward greater economic stability and growth.
