As the Middle East’s fintech sector accelerates, powered by rapid digital adoption and visionary government initiatives,  a new phase is emerging, writes Nauman Hassan regional director MENA at Paymentology.
The Middle East’s fintech market is now a global frontrunner. The UAE has surged to become the second-largest fintech investment hub globally, attracting $2.2billion in H1 2025, usurping the UK. Saudi Arabia hit 79 per cent cashless retail payments in 2024, surpassing its Vision 2030 target six years early.
Together, these trends signal a fintech ecosystem coming of age: a region-specific evolution in which governments enable innovation, global players invest heavily, and consumers embrace new services en masse.
So, what is the Middle East getting right when it comes to fintech and payments, and what’s next?
Digital payments are default
In 2025, cash is no longer king in much of the Middle East digital payments are the norm. Nowhere is this more evident than in the Gulf. In Saudi Arabia, the transformation has been swift. Contactless payments have leapt from four per cent in 2017 to 98 per cent in 2024, with more than a third of smartphone users now relying on wallets. STC Pay alone serves millions, while the domestic MADA scheme processed over a billion e-commerce transactions in 2024, up sixfold in just four years. The instant transfer network Sarie is now part of everyday life, used to split bills or pay small businesses instantly.
The UAE is on a similar trajectory. Visa data shows 84 per cent penetration of contactless across UAE merchants by 2024, with Apple Pay, Samsung Pay, and Google Pay all mainstream. Homegrown players like PayBy and E-wallet are expanding, while Tap-to-Phone adoption grew nearly 500 per cent year-on-year, bringing thousands of micro-merchants into the digital economy for the first time.
And the momentum isn’t confined to the Gulf. In Egypt, the Central Bank’s approval of onebank, the country’s first fully digital bank, signals a commitment to mobile-first finance as a lever for financial inclusion.
Whether it’s virtual cards in wallets or contactless at the metro gate, everyday payments across the region are now digital-first.
Regulation as accelerator
Unlike many markets, Middle East regulators are acting as catalysts. In Saudi Arabia, Vision 2030 has transformed the ecosystem. The Saudi Central Bank’s sandbox has nurtured myriad fintechs, while open banking is already live, covering both account data and payment initiation. The next phase, open finance, is already on the horizon.
The UAE is also pushing boundaries, issuing one of the world’s first frameworks for dirham-backed stablecoins in 2025, while innovation zones like DIFC and ADGM continue to attract global fintechs at scale. Jordan is stepping up too, with the Central Bank authorising its first open banking pilots in early 2025 as part of its economic modernisation vision.
The result: when banks and startups launch new cards or wallets, they can do so with confidence that regulation will support rather than hinder them.
Global capital, local champions
The region’s momentum is drawing global and local players together. In late 2024, Visa opened its fourth global innovation centre in Riyadh, highlighting Saudi Arabia’s position at the heart of digital payments growth. A year later, Mastercard partnered with UAE’s Zand Bank to expand cross-border transfers and cash services for retail and corporate clients, while Western Union’s earlier $200 million stake in STC Pay helped create Saudi’s first fintech unicorn.
At the same time, local champions are scaling at speed. Tabby, the Saudi BNPL leader, doubled its valuation to $3.3billion in 2025, growing to more than 15 million users, with its Tabby Card now accepted at over 4,000 UAE stores. While, Mamo, a UAE-based fintech, has rolled out SME credit and multi-currency cards with integrated expense management, addressing a long-standing gap for small businesses across the region.
Whether it’s BNPL cards reshaping retail or SME cards unlocking growth, it’s clear that if a product works in Saudi or the UAE, it’s ready for the region. That mix of scale, speed, and ambition makes the Middle East one of the world’s most compelling proving grounds for fintech innovation.
Credit innovation and inclusion
The credit gap in the Middle East remains stark. Nearly 65 per cent of adults in the Arab region remain unbanked, with fewer than one in five having ever borrowed from a formal financial institution. In countries like Egypt and Saudi Arabia, while financial inclusion is improving, 71.5 per cent of eligible adults in Egypt now hold transactional accounts and 74.3 per cent of Saudi adults are banked, millions remain without access to formal financial tools.
With millions still ‘credit invisible’ traditional lending models have struggled to keep pace. But 2025 has shown real progress.
BNPL has become a mainstream payment method, with Saudi’s Tabby operating under one of the world’s first dedicated BNPL regulatory frameworks. Youth-focused debit and prepaid cards are helping first-time users build financial habits, while SMEs are finally gaining access to tools like multi-currency credit cards and expense management platforms tailored to their needs. At the same time, new approaches to credit scoring are emerging: we’re seeing AI-driven models using alternative data has increased lending to the unbanked while lowering default rates.
Beyond cards: stablecoins & AI
The Middle East  is moving beyond traditional products, with stablecoins and AI shifting from hype to live pilots.
In the UAE, regulators approved USDC and EURC for use in Dubai’s financial centre, while Abu Dhabi’s sovereign fund is exploring a dirham-backed stablecoin for cross-border flows. Meanwhile, the UAE made headlines globally, earlier this year, by becoming the first country to provide free nationwide access to ChatGPT Plus, highlighting UAE’S ambition to democratise advanced AI. Fintechs are already harnessing real-time transaction data to embed these capabilities, powering fraud detection, personalised offers, and even instant BNPL prompts at checkout.
What’s next
We recently ran a poll on our Issuer Academy (Paymentology’s podcast) LinkedIn page, and the results were striking: 71 per cent of respondents believe the MENA region will lead the next wave of digital innovation. The outlook for the region certainly supports that view:
- More digital banks: From UAE’s Wio to Egypt’s onebank, the next two years will bring millions of new digital-only accounts, expanding access at unprecedented scale.
- Cross-border connectivity: Partnerships like Zand–Mastercard will become standard as remittance-heavy markets demand faster, cheaper flows across borders.
- Open finance: Saudi Arabia and the UAE are preparing to move beyond open banking, extending data-sharing into insurance, investments, and pensions.
- AI-driven finance: Regulators like SAMA are investing in AI-powered fraud detection, while fintechs leverage real-time data to create smarter, more personalised cardholder experiences.
- Cards as the on-ramp: From youth prepaid and SME expense cards to virtual cards embedded in wallets, issuing remains the bridge between global payment rails and everyday financial inclusion.
The region has moved past pilots and experiments. It is now building at scale, with regulators, networks, processors, and fintechs working in unison.
At Paymentology, we believe that when partnership meets purpose, innovation becomes inclusion. That’s what makes the Middle East one of the most exciting fintech markets.
The post View From My Market with Paymentology: What the Middle East is Getting Right appeared first on The Fintech Times.
