Recently, the Central Bank of Egypt (CBE) collaborated with some banks to debut Apple Pay to the Egyptian market. This is part of an effort to integrate financial technology into the nation's economy. The aim is to cut down on the often over-reliance on cash, which is by far among Egypt's most used modes of payment. Egypt is looking to catch up with other countries next door that recently opened up to digital payments and updated the country’s financial systems.
Apple Pay's Egypt Launch: A Step Toward Digital Transformation?
Then again, Egypt’s banking sector is late to the game in making digital payments an attractive proposition, but has been aggressive in building the infrastructure to support that evolution. Initiatives have been rolled out to boost adoption of new payment methods, such as mobile wallets, and contactless cards. It fits with a wider plan to digitize financial services and make them available to all Egyptians.
Apple Pay marks a big step in the work to modernize Egypt's payments systems. By introducing a convenient and safe way for users to make transactions, the system could be pushing the adoption from traditional cash practices to actual cash. Apple’s global footprint and the use of smartphones is expanding in Egypt , making this a game changer in the country’s drive to get into digital finance.
However, the real question remains: Will Egyptians accept this new way to pay? While the willing embrace by many younger, tech savvy players to mobile payments may seem a welcome change to some, it is feared that a large number of that population may not be ready for such a jump. Some Egyptians may not have access to smartphones, may not be financially literate, or may not trust digital transactions.
Continued government efforts to encourage the use of such digital payment services will be critical in the success of services of Apple Pay and its peers. If you want to encourage their use, you have to have educational programs and incentives and you’ve got to be able to have greater access to digital tools. If these efforts continue, digital payments could become a hallmark of everyday life in Egypt and establish a path towards a new more device efficient financial ecosystem.
Egypt’s Digital Payment Journey: Gradual Progress, Big Impact
Since the beginning of the previous decade, Egypt’s banking sector has gone through a transformation in becoming a digital payment frontier, taking steady but incremental steps. The gradual shift since 2016 has helped make digital transactions less of an unknown for many Egyptians. Pivotal in these efforts has been digital payments introducing them into separate social classes and a foundational step for modernizing Egypt’s financial landscape.
Working with Central Bank, National Bank of Egypt, and Banque Misr, Visa Egypt played an integral role in one key initiative towards this transformation. The target was to digitalize the government payroll system that is cash based salary disbursements of more than 5.8 million employees. The thrust of this effort was to extend the realm of financial inclusion among government workers who otherwise had no banking access.
Finally, this effort reached success and changed payroll cards into a routine behavior for government employees. It represented a bedrock for pushing digital payments across other parts of the government. And while its national payment network, Meeza, launched in 2019, this only spurred Egypt’s digital banking agenda into even more mainstream discourse.
By 2024, the results were impressive. Some 48 million people of the 67 million who are eligible to sign up for digital banking were already on the system, as compared to a previous year in which bank accounts were restricted to a narrower band of the people. It also had installed more than 8,000 digital point of sale (POS) systems, as a means of making digital payments more accessible nationwide.
But while these have been an impact, Egypt’s size and the fact that it is such a diverse place is challenging. In particular, rural areas remain far behind urban centers in the areas of banking access and digital payment system familiarity. Yet there remains a huge gap to be bridged as the country continues to seek to provide the same opportunities to all citizens with digital financial services.
Egypt's Digital Revolution: Aligning with Global Trends
In the last few years, Egypt has taken huge strides to adopt digital payments and become a proponent of global financial phenomena. This transformation was powered by the country’s financial inclusion, an initiative that sought to replace cash transactions with digital, which became the basis for the new glide and the country’s latest initiatives. Once these initial steps have been put in place, Egypt is now making a push to integrate more robust, advanced financial technologies in line with similar progress being made in other countries around the world.
In 2021, Egypt’s first digital bank, Telda, took a major leap in the journey toward modernization. This paving the way for other fintech companies like Fawry and Clever. However, shortly after launching, these companies began to form partnerships with traditional banks like Banque Misr and Banque du Caire and quickly caught the attention, with Generation Z which are the primary users of digital banking services.
Digital banks are one of the key goals for a digital bank allowing it to open accounts without any physical branch visits and issue payment cards. The digital only banking has been a success, making banking less cumbersome for users that want fast and easy access to their money.
Launched in late 2023, Egypt’s digital payment ecosystem is one step further in reaching new heights with Apple Pay's launch. As the country plans on blooming both Google Pay and Samsung Pay early next year, the country’s financial infrastructure line up to global fintech standards. All this is a clear push toward modernizing the payment systems as well as making digital transactions more accessible.
Alongside these trends, buy now, pay later (BNPL) platforms ValU and Halan have become popular options for consumers to receive financing on a flexible basis. Take Halan, which manages to raise $157 million till mid 2023, showing the growing demand for these services. The Central Bank-backed InstaPay app has also had a surge of growth witnessing 1.5 billion transactions in 2024 which just shows the ongoing trend towards digital financial solutions in Egypt.
The Future of Digital Payments in Egypt: Will Cash Lose Its Hold?
Despite the concerted efforts by both the government and private sector, the question remains: Will digital payments truly be able to replace cash in Egyptian payments? Progress has been made but the country’s financial landscape is largely cash based and there’s still work to do on the shift to digital.
Statista’s latest data on financial transactions made at POS terminals in Egypt disclosed that a whopping 72 percent of the current transactions are still carried out in cash. Such a figure shows how much of the population has a strong cultural preference for cash, highlighting how difficult it is to make the whole population make a full transition to digital payments. However, cash still rules supreme, as the remainder of transactions are already being divided between various digital payment methods.
In addition, Egypt’s digital payments face its own issues. A lack of customer confidence in digital payments has been due in part to transaction failures and technical errors. The issues above involve many Egyptians who are hesitant to fully digest digital payment options altogether for everyday transactions; mostly due to its level of reliability.
But experts say that the need to use cash slowly dwindles down as Generation Z and Generation Alpha become the most important consumer groups. With their younger generations being more tech savvy and generally using more digital banking services that could be a big transition in other ways. Something as simple as their adoption of digital payments could be the catalyst for broader acceptance.
Egypt is on the path to become the first cashless country in the region for precisely the same reason that USA decided to reduce its physical cash so at rapid pace, with a demographic shift in favor of younger, digitally inclined consumers. As these generations become the most significant force in the economy, the nation’s digital payment infrastructure will probably grow, a cashless future will seem closer than ever.