The card payment market in Kuwait has been growing over the past five years, driven by the steady increase in the number of cards per capita and point-of-sale (POS) footprint, and significant growth in the penetration of digital payments.
In addition to the banks, startups in the payment service provider (PSP) segment have played a key role in driving the adoption of digital payments in the market, with easy-to-adopt solutions for merchants.
The COVID-19 outbreak has given a further boost to card payments, by accelerating the adoption of e-commerce and digital payments. Consumers are compelled to carry out online transactions across sectors for their day-to-day needs during the lockdowns imposed by the government to control the spread of COVID-19. Legacy offline businesses and SMEs are digitalizing their sales on a war footing to reach their consumers.
As a result, the digital payment landscape is expected to witness increased adoption of contact payments, greater digitalization of banking services, higher focus on fraud prevention systems and infrastructure, evolution of fintech and payments-related regulations, rise of digital currencies and an impetus for banks – fintech partnerships. These shifts will have implications for both banks and PSPs.
During the last few weeks, KPMG has analyzed the implications of these market shifts on banks and PSPs in Kuwait. We have held structured discussions with several market incumbents to understand their perspectives and experiences. In this report, we outline the synthesis of this research, along with a range of key considerations for both PSPs and banks to address this market opportunity.
POS accounts for 78% of card payments in Kuwait; over the last five years, digital payments (payment gateways) have grown grew ~9X faster in value than POS, albeit from a lower base
Partner - Deal Advisory
Ankul has over 20 years of experience in both Corporate Finance and Corporate Planning. Prior to joining KPMG, he as he worked with one of the leading banks in Kuwait and one of the largest business houses in the Middle East.
Associate Director- Deal Advisory
Harsha advised clients across a diverse range of sectors on feasibility studies, business plans, market assessments and growth strategy mandates. He specializes in advisory for emerging sectors such as start-ups, e-commerce, fintech and new age technologies.