Middle East Fintech Growth Accelerates with Digital Payments and AI

The Middle East is fast emerging as a global leader in the fintech revolution. According to Nauman Hassan, Regional Director at Paymentology, the region’s rapid adoption of digital payments, forward-looking regulatory frameworks, and AI-driven innovations are positioning it among the world’s most influential fintech markets (The Fintech Times).

Digital Payments Becoming the Norm

Saudi Arabia has become a case study in how quickly consumer behavior can evolve when technology and regulation align. Contactless payments rose from just 4 percent in 2017 to 98 percent by 2024 (Arab News). The national payments network MADA recorded more than one billion e-commerce transactions in four years, marking a six-fold increase. One in three smartphone users now relies on mobile wallets, while the Sarie instant payments system has integrated seamlessly into daily life.

The United Arab Emirates (UAE) is experiencing similar momentum. By 2024, Visa reported that 84 percent of merchants were accepting contactless payments. Apple Pay, Google Pay, and Samsung Pay are widely used, but local platforms such as PayBy and E-wallet are scaling at impressive speed. Tap-to-Phone adoption grew by 500 percent year-on-year, empowering microbusinesses to enter the digital economy.

Egypt is also seeing a fintech transformation. The central bank recently licensed onebank, the nation’s first fully digital bank, aiming to expand mobile banking access and improve financial inclusion.

Regulation as a Catalyst

In Saudi Arabia, Vision 2030 reforms and fintech sandbox programs are creating a supportive environment for startups. Open banking has already been rolled out, covering account data sharing and payment initiation, with plans to expand into open finance.

The UAE, meanwhile, launched one of the world’s most advanced regulatory frameworks for a dirham-based stablecoin in 2025. Financial free zones such as DIFC and ADGM continue to attract global fintechs. Jordan is also making progress, with its central bank launching open banking pilots earlier this year.

Global Players Betting Big

The region’s importance is evident from the level of global investment. Visa opened its fourth global innovation hub in Riyadh at the end of 2024. Mastercard partnered with UAE’s Zand Bank to improve cross-border payments (Zawya). Western Union invested 200 million dollars into STC Pay, strengthening Saudi Arabia’s fintech ecosystem.

Local fintech leaders are also making waves. Saudi Arabia’s Tabby, a Buy Now, Pay Later (BNPL) giant, reached a valuation of 3.3 billion dollars in 2025 and now serves over 15 million users (Bloomberg). Its Tabby Card is accepted at more than 4,000 stores across the UAE. Meanwhile, UAE-based Mamo is supporting SMEs with multi-currency cards and expense management solutions.

Expanding Financial Inclusion

The Arab region still has one of the highest rates of unbanked adults globally, with around 65 percent outside the formal financial system (World Bank). Yet progress is clear: in Egypt, 71.5 percent of adults now hold a transaction account, while in Saudi Arabia the figure is 74.3 percent.

Saudi Arabia was also among the first countries to regulate BNPL products, giving consumers and merchants confidence in the model. Youth-focused debit cards are onboarding new generations, while SME lending tools are expanding access to capital. AI-powered credit scoring, using alternative data such as utility bills and mobile phone records, is helping banks and fintechs extend loans to underserved customers.

The Next Frontier: Stablecoins and AI

Stablecoins such as USDC and EURC are now available in UAE free zones, and Abu Dhabi is piloting a dirham-backed stablecoin (CoinDesk). These digital currencies could transform remittances, a sector worth hundreds of billions annually in the Middle East.

Artificial intelligence is also on the rise. Earlier this year, the UAE government made ChatGPT Plus available for free nationwide, signaling its commitment to democratizing AI and driving digital literacy. From fraud detection to personalized banking, AI is expected to play a central role in shaping the future of finance.

A Market Built on Collaboration

According to Nauman Hassan of Paymentology, the unique strength of the Middle East lies in its collaborative model: “When partnership and purpose come together, innovation enhances financial inclusion. This is what makes the Middle East one of the most exciting fintech markets in the world today.”

Hassan notes that the region is not simply adopting global trends but shaping its own path. Innovations in BNPL regulation, AI-driven credit scoring, and stablecoin frameworks are being watched closely by other emerging markets.