State of Payments 2016

1. stateofpayments.com

2. ABOUT THE REPORT Welcome to the State of Payments 2016 by PAYFORT. For the third year in a row we’re releasing our annual report that details the world of payments, ecommerce and innovation across the Arab World. We’ve collected data from both consumers and merchants to provide you with actionable insight you can use to create a more successful, proﬁtable and consumer focused business. Two years ago we released our ﬁrst State of Payments report, something that evolved out of a desire to increase our own understanding of consumers in the region and share that information with the growing business community throughout the Arab World. In last year’s report, we strived to create something that not only contained the same consumer-centric data but also presented that data in a meaningful way. We wanted to create a fuller picture that incorporated the opinions of hundreds of merchants who interact with consumers on a day-to-day basis. In this year’s report we’ve once again reimagined how best to share the massive amount of data that is available within the Middle East’s ecommerce sectors. To do this we have refocused the report to not onlyexplore current trends, but also address the real issues that impact merchants on a day to day basis and share meaningful solutions for the future. Over the past three years State of Payments has become our favourite content piece and we’d love to hear your thoughts on the report. Be sure to reach out via social media using the hashtag #StateofPayments or contact us via email social@payfort.com to share your thoughts. We have also provided a feedback section within the report where you can share your thoughts.

3. TABLE OF CONTENT Trends Marketsize Marketsize Forecast Acceptance Ratio Refunds Seasonality Demographics Population Internet User Online Buyers Social Network Buyers by Genders Age Group Income Level Survey Online Shopping in the Arab World What type of Products are Arab shoppers buying How Shoppers are Inﬂuenced Payment, Security & Privacy Challenges Failure from 3D Secure Credit Card Penetration Fraud and Risk Tolerance Mobile Payment Trust E-commerce Utopia About the Report Why State of Payments? Methodology 02 14 26 39 52 63 64 65 66 73 74 81 107 109 89 90 91 92 94 96 98 100 102 105

4. Changes that are shaping Middle East E-commerce

5. 10b 9b 8b 7b 6b 5b 4b 3b 2b 1b 0 20152014 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 8.24b 10.25b 4.63b 6.48b 4.18b 1.09b 1.26b 0.73b0.78b 0.55b 0.65b 0.38b0.42b MARKETSIZE OVERVIEW Across the region we saw very strong growth, with market size increasing by an impressive 23.3%. The largest growth occurred in Saudi Arabia, with the UAE and Egypt also performing exceedingly well. The smallest growth occurred in Lebanon and Qatar, howeverit is important to note that the market size of all countries studied is increasing. Saudi Arabia’s growth was fuelled by a growing ecommerce market and an increase in online travel bookings, with these sectors representing the largest growth in the region. Egypt and the UAE in contrast saw larger growth in their events and entertainment sectors. The slowest growth occurred in Lebanon’s Airlines sector and a similar trend was observed in Kuwait and Qatar. 2 #stateofpayments 5.06b

6. 6b 5b 4b 3b 2b 1b 0 20152014 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 4.70b 5.62b 1.14b 1.65b 2.30b 2.84b 0.09b 0.13b MARKETSIZE UNITED ARAB EMIRATES Across the region we saw very strong growth, with market size increasing by an impressive 23.3%. The largest growth occurred in Saudi Arabia, with the UAE and Egypt also performing exceedingly well. The smallest growth occurred in Lebanon and Qatar, howeverit is important to note that the market size of all countries studied is increasing. Saudi Arabia’s growth was fuelled by a growing ecommerce market and an increase in online travel bookings, with these sectors representing the largest growth in the region. Egypt and the UAE in contrast saw larger growth in their events and entertainment sectors. The slowest growth occurred in Lebanon’s Airlines sector and a similar trend was observed in Kuwait and Qatar. 3#stateofpayments

7. 5b 4b 3b 2b 1b 0 20152014 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 2.20b 2.67b 0.92b 1.55b 1.50b 2.25b MARKETSIZE KINGDOM OF SAUDI ARABIA Across the region we saw very strong growth, with market size increasing by an impressive 23.3%. The largest growth occurred in Saudi Arabia, with the UAE and Egypt also performing exceedingly well. The smallest growth occurred in Lebanon and Qatar, howeverit is important to note that the market size of all countries studied is increasing. Saudi Arabia’s growth was fuelled by a growing ecommerce market and an increase in online travel bookings, with these sectors representing the largest growth in the region. Egypt and the UAE in contrast saw larger growth in their events and entertainment sectors. The slowest growth occurred in Lebanon’s Airlines sector and a similar trend was observed in Kuwait and Qatar. .001b .012b 4 #stateofpayments

8. 5b 4b 3b 2b 1b 0 20152014 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 1.90b 2.18b 0.87b 1.03b 1.40b 1.84b .006b .009b MARKETSIZE EGYPT Across the region we saw very strong growth, with market size increasing by an impressive 23.3%. The largest growth occurred in Saudi Arabia, with the UAE and Egypt also performing exceedingly well. The smallest growth occurred in Lebanon and Qatar, howeverit is important to note that the market size of all countries studied is increasing. Saudi Arabia’s growth was fuelled by a growing ecommerce market and an increase in online travel bookings, with these sectors representing the largest growth in the region. Egypt and the UAE in contrast saw larger growth in their events and entertainment sectors. The slowest growth occurred in Lebanon’s Airlines sector and a similar trend was observed in Kuwait and Qatar. 5#stateofpayments

9. 1000m 900m 800m 700m 600m 500m 400m 300m 200m 100m 0 20152014 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 560m 2.5m 2.7m MARKETSIZE KUWAIT Across the region we saw very strong growth, with market size increasing by an impressive 23.3%. The largest growth occurred in Saudi Arabia, with the UAE and Egypt also performing exceedingly well. The smallest growth occurred in Lebanon and Qatar, howeverit is important to note that the market size of all countries studied is increasing. Saudi Arabia’s growth was fuelled by a growing ecommerce market and an increase in online travel bookings, with these sectors representing the largest growth in the region. Egypt and the UAE in contrast saw larger growth in their events and entertainment sectors. The slowest growth occurred in Lebanon’s Airlines sector and a similar trend was observed in Kuwait and Qatar. 400m 130m 430m 150m 680m 6 #stateofpayments

10. 1000m 900m 800m 700m 600m 500m 400m 300m 200m 100m 0 MARKETSIZE LEBANON Across the region we saw very strong growth, with market size increasing by an impressive 23.3%. The largest growth occurred in Saudi Arabia, with the UAE and Egypt also performing exceedingly well. The smallest growth occurred in Lebanon and Qatar, howeverit is important to note that the market size of all countries studied is increasing. Saudi Arabia’s growth was fuelled by a growing ecommerce market and an increase in online travel bookings, with these sectors representing the largest growth in the region. Egypt and the UAE in contrast saw larger growth in their events and entertainment sectors. The slowest growth occurred in Lebanon’s Airlines sector and a similar trend was observed in Kuwait and Qatar. 7#stateofpayments 20152014 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 280m 310m 3.7m 4.1m 50m 56m 400m410m

11. 1000m 900m 800m 700m 600m 500m 400m 300m 200m 100m 0 20152014 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT MARKETSIZE JORDAN Across the region we saw very strong growth, with market size increasing by an impressive 23.3%. The largest growth occurred in Saudi Arabia, with the UAE and Egypt also performing exceedingly well. The smallest growth occurred in Lebanon and Qatar, howeverit is important to note that the market size of all countries studied is increasing. Saudi Arabia’s growth was fuelled by a growing ecommerce market and an increase in online travel bookings, with these sectors representing the largest growth in the region. Egypt and the UAE in contrast saw larger growth in their events and entertainment sectors. The slowest growth occurred in Lebanon’s Airlines sector and a similar trend was observed in Kuwait and Qatar. 300m 340m 40m 60m 210m 250m 1.2m 1.5m 8 #stateofpayments

12. 1000m 900m 800m 700m 600m 500m 400m 300m 200m 100m 0 20152014 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT MARKETSIZE QATAR Across the region we saw very strong growth, with market size increasing by an impressive 23.3%. The largest growth occurred in Saudi Arabia, with the UAE and Egypt also performing exceedingly well. The smallest growth occurred in Lebanon and Qatar, howeverit is important to note that the market size of all countries studied is increasing. Saudi Arabia’s growth was fuelled by a growing ecommerce market and an increase in online travel bookings, with these sectors representing the largest growth in the region. Egypt and the UAE in contrast saw larger growth in their events and entertainment sectors. The slowest growth occurred in Lebanon’s Airlines sector and a similar trend was observed in Kuwait and Qatar. 300m 320m 45m 49m 38m 44m .5m .6m 9#stateofpayments

13. 6b 5b 4b 3b 2b 1b 0 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 4.70b 5.62b 2.20b 2.67b 1.90b 2.18b .40b .41b .30b .34b .30b .32b MARKETSIZE AIRLINES Across the region we saw very strong growth, with market size increasing by an impressive 23.3%. The largest growth occurred in Saudi Arabia, with the UAE and Egypt also performing exceedingly well. The smallest growth occurred in Lebanon and Qatar, howeverit is important to note that the market size of all countries studied is increasing. Saudi Arabia’s growth was fuelled by a growing ecommerce market and an increase in online travel bookings, with these sectors representing the largest growth in the region. Egypt and the UAE in contrast saw larger growth in their events and entertainment sectors. The slowest growth occurred in Lebanon’s Airlines sector and a similar trend was observed in Kuwait and Qatar. 20152014 .40b .43b 10 #stateofpayments

14. 3b 2b 1b 0 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 1.14b 1.65b .92b 1.55b .87b 1.03b .04b .06b MARKETSIZE TRAVEL Across the region we saw very strong growth, with market size increasing by an impressive 23.3%. The largest growth occurred in Saudi Arabia, with the UAE and Egypt also performing exceedingly well. The smallest growth occurred in Lebanon and Qatar, howeverit is important to note that the market size of all countries studied is increasing. Saudi Arabia’s growth was fuelled by a growing ecommerce market and an increase in online travel bookings, with these sectors representing the largest growth in the region. Egypt and the UAE in contrast saw larger growth in their events and entertainment sectors. The slowest growth occurred in Lebanon’s Airlines sector and a similar trend was observed in Kuwait and Qatar. 20152014 .045b.049b.05b .13b .15b .06b 11#stateofpayments

15. 3b 2b 1b 0 20152014 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 2.30b 2.84b 1.50b 2.25b 1.40b 1.84b .28b .31b .21b .25b MARKETSIZE ECOMMERCE Across the region we saw very strong growth, with market size increasing by an impressive 23.3%. The largest growth occurred in Saudi Arabia, with the UAE and Egypt also performing exceedingly well. The smallest growth occurred in Lebanon and Qatar, howeverit is important to note that the market size of all countries studied is increasing. Saudi Arabia’s growth was fuelled by a growing ecommerce market and an increase in online travel bookings, with these sectors representing the largest growth in the region. Egypt and the UAE in contrast saw larger growth in their events and entertainment sectors. The slowest growth occurred in Lebanon’s Airlines sector and a similar trend was observed in Kuwait and Qatar. .03b .04b .56b .68b 12 #stateofpayments

16. MARKETSIZE ENTERTAINMENT Across the region we saw very strong growth, with market size increasing by an impressive 23.3%. The largest growth occurred in Saudi Arabia, with the UAE and Egypt also performing exceedingly well. The smallest growth occurred in Lebanon and Qatar, howeverit is important to note that the market size of all countries studied is increasing. Saudi Arabia’s growth was fuelled by a growing ecommerce market and an increase in online travel bookings, with these sectors representing the largest growth in the region. Egypt and the UAE in contrast saw larger growth in their events and entertainment sectors. The slowest growth occurred in Lebanon’s Airlines sector and a similar trend was observed in Kuwait and Qatar. 150m 100m 50m 0 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 95m 129m 10m 12.4m 6.25m 8.82m 3.75m 4.15m 1.25m 1.52m 20152014 2.5m 2.7m .50m .58m 13#stateofpayments

17. MARKETSIZE OVERVIEW (Forecast) Moving forward into 2020 we expect to see positive growth throughout the Middle East with countries like Saudi Arabia, the United Arab Emirates and Egypt leading the region. With more and more people moving online, Saudi Arabia is expected to see substantial growth while smaller countries such as Lebanon and Qatar are expecting more modest increases. Both Saudi Arabian and Egyptian growth will likely come out of their booming travel sectors and increasingly popular ecommerce businesses. The UAE’s entertainment and events sector is expected to grow more than any other sector in the region as a result of Expo 2020. 30b 25b 20b 15b 10b 5b 0 20202015 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 10.24b 27.13b 6.48b 22.13b 5.06b 14.04b .65b 1.36b .42b .65b 1.26b 2.8b .78b 1.09b 14 #stateofpayments

18. 20202015 15b 10b 5b 0 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 5.6b 13.7b 1.6b 4.6b 2.84b 8.09b 0.12b 0.60b MARKETSIZE (Forecast) UNITED ARAB EMIRATES Moving forward into 2020 we expect to see positive growth throughout the Middle East with countries like Saudi Arabia, the United Arab Emirates and Egypt leading the region. With more and more people moving online, Saudi Arabia is expected to see substantial growth while smaller countries such as Lebanon and Qatar are expecting more modest increases. Both Saudi Arabian and Egyptian growth will likely come out of their booming travel sectors and increasingly popular ecommerce businesses. The UAE’s entertainment and events sector is expected to grow more than any other sector in the region as a result of Expo 2020. 15#stateofpayments

19. MARKETSIZE (Forecast) KINGDOM OF SAUDI ARABIA Moving forward into 2020 we expect to see positive growth throughout the Middle East with countries like Saudi Arabia, the United Arab Emirates and Egypt leading the region. With more and more people moving online, Saudi Arabia is expected to see substantial growth while smaller countries such as Lebanon and Qatar are expecting more modest increases. Both Saudi Arabian and Egyptian growth will likely come out of their booming travel sectors and increasingly popular ecommerce businesses. The UAE’s entertainment and events sector is expected to grow more than any other sector in the region as a result of Expo 2020. 15b 10b 5b 0 20202015 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 7.06b 6.68b 2.30b 8.35b .012b .036b 2.67b 1.55b 16 #stateofpayments

20. 10b 8b 6b 4b 2b 0 20202015 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 2.18b 4.35b 1.03b 2.36b 1.84b 7.30b .009b .023b MARKETSIZE (Forecast) EGYPT Moving forward into 2020 we expect to see positive growth throughout the Middle East with countries like Saudi Arabia, the United Arab Emirates and Egypt leading the region. With more and more people moving online, Saudi Arabia is expected to see substantial growth while smaller countries such as Lebanon and Qatar are expecting more modest increases. Both Saudi Arabian and Egyptian growth will likely come out of their booming travel sectors and increasingly popular ecommerce businesses. The UAE’s entertainment and events sector is expected to grow more than any other sector in the region as a result of Expo 2020. 17#stateofpayments

21. MARKETSIZE (Forecast) KUWAIT Moving forward into 2020 we expect to see positive growth throughout the Middle East with countries like Saudi Arabia, the United Arab Emirates and Egypt leading the region. With more and more people moving online, Saudi Arabia is expected to see substantial growth while smaller countries such as Lebanon and Qatar are expecting more modest increases. Both Saudi Arabian and Egyptian growth will likely come out of their booming travel sectors and increasingly popular ecommerce businesses. The UAE’s entertainment and events sector is expected to grow more than any other sector in the region as a result of Expo 2020. 2b 1b 0 20202015 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT .62b .68b .002b .004b .43b .33b .15b 1.86b 18 #stateofpayments

22. MARKETSIZE (Forecast) LEBANON Moving forward into 2020 we expect to see positive growth throughout the Middle East with countries like Saudi Arabia, the United Arab Emirates and Egypt leading the region. With more and more people moving online, Saudi Arabia is expected to see substantial growth while smaller countries such as Lebanon and Qatar are expecting more modest increases. Both Saudi Arabian and Egyptian growth will likely come out of their booming travel sectors and increasingly popular ecommerce businesses. The UAE’s entertainment and events sector is expected to grow more than any other sector in the region as a result of Expo 2020. 19#stateofpayments 1000m 900m 800m 700m 600m 500m 400m 300m 200m 100m 0 20202015 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 310m 494m 4.15m 6.90m 56m 98m 414m 492m

23. MARKETSIZE (Forecast) JORDAN Moving forward into 2020 we expect to see positive growth throughout the Middle East with countries like Saudi Arabia, the United Arab Emirates and Egypt leading the region. With more and more people moving online, Saudi Arabia is expected to see substantial growth while smaller countries such as Lebanon and Qatar are expecting more modest increases. Both Saudi Arabian and Egyptian growth will likely come out of their booming travel sectors and increasingly popular ecommerce businesses. The UAE’s entertainment and events sector is expected to grow more than any other sector in the region as a result of Expo 2020. 1000m 900m 800m 700m 600m 500m 400m 300m 200m 100m 0 20202015 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 340m 647m 60m 180m 250m 520m 1.52m 4.09m 20 #stateofpayments

24. 1000m 900m 800m 700m 600m 500m 400m 300m 200m 100m 0 20202015 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT MARKETSIZE (Forecast) QATAR Moving forward into 2020 we expect to see positive growth throughout the Middle East with countries like Saudi Arabia, the United Arab Emirates and Egypt leading the region. With more and more people moving online, Saudi Arabia is expected to see substantial growth while smaller countries such as Lebanon and Qatar are expecting more modest increases. Both Saudi Arabian and Egyptian growth will likely come out of their booming travel sectors and increasingly popular ecommerce businesses. The UAE’s entertainment and events sector is expected to grow more than any other sector in the region as a result of Expo 2020. 320m 480m 49m 83m 44m 86m .58m 1.26m 21#stateofpayments

25. MARKETSIZE (Forecast) AIRLINES Moving forward into 2020 we expect to see positive growth throughout the Middle East with countries like Saudi Arabia, the United Arab Emirates and Egypt leading the region. With more and more people moving online, Saudi Arabia is expected to see substantial growth while smaller countries such as Lebanon and Qatar are expecting more modest increases. Both Saudi Arabian and Egyptian growth will likely come out of their booming travel sectors and increasingly popular ecommerce businesses. The UAE’s entertainment and events sector is expected to grow more than any other sector in the region as a result of Expo 2020. .48b 15b 10b 5b 0 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 5.62b 13.77b 2.67b 7.06b 4.35b .41b .49b .34b .65b .32b 20202015 .43b 2.18b .62b 22 #stateofpayments

26. MARKETSIZE (Forecast) TRAVEL Moving forward into 2020 we expect to see positive growth throughout the Middle East with countries like Saudi Arabia, the United Arab Emirates and Egypt leading the region. With more and more people moving online, Saudi Arabia is expected to see substantial growth while smaller countries such as Lebanon and Qatar are expecting more modest increases. Both Saudi Arabian and Egyptian growth will likely come out of their booming travel sectors and increasingly popular ecommerce businesses. The UAE’s entertainment and events sector is expected to grow more than any other sector in the region as a result of Expo 2020. 8b 6b 4b 2b 0 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 1.65b 4.66b 1.55b 6.68b 2.36b .056b .098b .06b .18b 20202015 1.03b .049b.083b.15b .33b 23#stateofpayments

27. MARKETSIZE (Forecast) ECOMMERCE Moving forward into 2020 we expect to see positive growth throughout the Middle East with countries like Saudi Arabia, the United Arab Emirates and Egypt leading the region. With more and more people moving online, Saudi Arabia is expected to see substantial growth while smaller countries such as Lebanon and Qatar are expecting more modest increases. Both Saudi Arabian and Egyptian growth will likely come out of their booming travel sectors and increasingly popular ecommerce businesses. The UAE’s entertainment and events sector is expected to grow more than any other sector in the region as a result of Expo 2020. 12b 10b 8b 6b 4b 2b 0 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 2.83b 8.09b 2.30b 8.35b 7.30b 1.86b .25b .52b 20202015 .68b 1.84b .04b .09b .31b .49b 24 #stateofpayments

28. MARKETSIZE (Forecast) ENTERTAINMENT Moving forward into 2020 we expect to see positive growth throughout the Middle East with countries like Saudi Arabia, the United Arab Emirates and Egypt leading the region. With more and more people moving online, Saudi Arabia is expected to see substantial growth while smaller countries such as Lebanon and Qatar are expecting more modest increases. Both Saudi Arabian and Egyptian growth will likely come out of their booming travel sectors and increasingly popular ecommerce businesses. The UAE’s entertainment and events sector is expected to grow more than any other sector in the region as a result of Expo 2020. 800m 600m 400m 200m 0 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 129.3m 605.8m 36.7m 1.52m 4.09m 20202015 8.82m 0.58m1.26m12.4m 23.8m 2.69m3.87m 4.15m6.90m 25#stateofpayments

29. ACCEPTANCE RATIO OVERVIEW The average acceptance across the Middle East has increased dramatically in 2015. This growth was largely fuelled by Egypt,Jordan and Kuwait however all countries studied saw impressive improvements. Egypt saw their largest improvements in the ecommerce sector which increased by 16% over last year. This is a very positive sign that the Egyptian population is becoming more comfortable using ecommerce services in their daily lives. Another notable area of growth is Kuwait’s marketplace services sector which increased by 11.1%. Overall, the increasing acceptance ratio means online payments are becoming more common and more accepted in the region. 100% 80% 60% 40% 20% 0 20152014 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 68% 71% 54% 58% 47% 51% 50% 53% 46% 49% 47% 52% 52% 54% 26 #stateofpayments

30. 20152014 100% 80% 60% 40% 20% 0 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 60% 65% MARKETPLACE 70% 78% 60% 63% 69% 71% 80%80% ACCEPTANCE RATIO UNITED ARAB EMIRATES The average acceptance across the Middle East has increased dramatically in 2015. This growth was largely fuelled by Egypt,Jordan and Kuwait however all countries studied saw impressive improvements. Egypt saw their largest improvements in the ecommerce sector which increased by 16% over last year. This is a very positive sign that the Egyptian population is becoming more comfortable using ecommerce services in their daily lives. Another notable area of growth is Kuwait’s marketplace services sector which increased by 11.1%. Overall, the increasing acceptance ratio means online payments are becoming more common and more accepted in the region. 27#stateofpayments

31. ACCEPTANCE RATIO KINGDOM OF SAUDI ARABIA The average acceptance across the Middle East has increased dramatically in 2015. This growth was largely fuelled by Egypt,Jordan and Kuwait however all countries studied saw impressive improvements. Egypt saw their largest improvements in the ecommerce sector which increased by 16% over last year. This is a very positive sign that the Egyptian population is becoming more comfortable using ecommerce services in their daily lives. Another notable area of growth is Kuwait’s marketplace services sector which increased by 11.1%. Overall, the increasing acceptance ratio means online payments are becoming more common and more accepted in the region. 20152014 100% 80% 60% 40% 20% 0 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 53% 58% MARKETPLACE 70% 75% 50% 52% 50% 55% 49%50% 28 #stateofpayments

32. ACCEPTANCE RATIO EGYPT The average acceptance across the Middle East has increased dramatically in 2015. This growth was largely fuelled by Egypt,Jordan and Kuwait however all countries studied saw impressive improvements. Egypt saw their largest improvements in the ecommerce sector which increased by 16% over last year. This is a very positive sign that the Egyptian population is becoming more comfortable using ecommerce services in their daily lives. Another notable area of growth is Kuwait’s marketplace services sector which increased by 11.1%. Overall, the increasing acceptance ratio means online payments are becoming more common and more accepted in the region. 20152014 100% 80% 60% 40% 20% 0 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 52% 55% MARKETPLACE 43% 45% 39% 40% 50% 58% 50% 55% 29#stateofpayments

33. ACCEPTANCE RATIO KUWAIT The average acceptance across the Middle East has increased dramatically in 2015. This growth was largely fuelled by Egypt,Jordan and Kuwait however all countries studied saw impressive improvements. Egypt saw their largest improvements in the ecommerce sector which increased by 16% over last year. This is a very positive sign that the Egyptian population is becoming more comfortable using ecommerce services in their daily lives. Another notable area of growth is Kuwait’s marketplace services sector which increased by 11.1%. Overall, the increasing acceptance ratio means online payments are becoming more common and more accepted in the region. 20152014 100% 80% 60% 40% 20% 0 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 45% 50% MARKETPLACE 52% 55%55% 60% 43% 45% 54% 56% 30 #stateofpayments

34. ACCEPTANCE RATIO LEBANON The average acceptance across the Middle East has increased dramatically in 2015. This growth was largely fuelled by Egypt,Jordan and Kuwait however all countries studied saw impressive improvements. Egypt saw their largest improvements in the ecommerce sector which increased by 16% over last year. This is a very positive sign that the Egyptian population is becoming more comfortable using ecommerce services in their daily lives. Another notable area of growth is Kuwait’s marketplace services sector which increased by 11.1%. Overall, the increasing acceptance ratio means online payments are becoming more common and more accepted in the region. 20152014 100% 80% 60% 40% 20% 0 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 50% 55% MARKETPLACE 45% 50% 52% 55% 39% 40% 45%45% 31#stateofpayments

35. ACCEPTANCE RATIO JORDAN The average acceptance across the Middle East has increased dramatically in 2015. This growth was largely fuelled by Egypt,Jordan and Kuwait however all countries studied saw impressive improvements. Egypt saw their largest improvements in the ecommerce sector which increased by 16% over last year. This is a very positive sign that the Egyptian population is becoming more comfortable using ecommerce services in their daily lives. Another notable area of growth is Kuwait’s marketplace services sector which increased by 11.1%. Overall, the increasing acceptance ratio means online payments are becoming more common and more accepted in the region. 20152014 100% 80% 60% 40% 20% 0 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 50% 55% MARKETPLACE 50% 55%55% 60% 37% 40% 45% 50% 32 #stateofpayments

36. ACCEPTANCE RATIO QATAR The average acceptance across the Middle East has increased dramatically in 2015. This growth was largely fuelled by Egypt,Jordan and Kuwait however all countries studied saw impressive improvements. Egypt saw their largest improvements in the ecommerce sector which increased by 16% over last year. This is a very positive sign that the Egyptian population is becoming more comfortable using ecommerce services in their daily lives. Another notable area of growth is Kuwait’s marketplace services sector which increased by 11.1%. Overall, the increasing acceptance ratio means online payments are becoming more common and more accepted in the region. 20152014 100% 80% 60% 40% 20% 0 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 52% 55% MARKETPLACE 55% 58% 50% 50% 50% 50%51% 55% 33#stateofpayments

37. ACCEPTANCE RATIO AIRLINES The average acceptance across the Middle East has increased dramatically in 2015. This growth was largely fuelled by Egypt,Jordan and Kuwait however all countries studied saw impressive improvements. Egypt saw their largest improvements in the ecommerce sector which increased by 16% over last year. This is a very positive sign that the Egyptian population is becoming more comfortable using ecommerce services in their daily lives. Another notable area of growth is Kuwait’s marketplace services sector which increased by 11.1%. Overall, the increasing acceptance ratio means online payments are becoming more common and more accepted in the region. 100% 80% 60% 40% 20% 0 20152014 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 80%80% 49% 50% 50% 55% 54% 56% 45% 45% 45% 50% 51% 55% 34 #stateofpayments

38. ACCEPTANCE RATIO TRAVEL The average acceptance across the Middle East has increased dramatically in 2015. This growth was largely fuelled by Egypt,Jordan and Kuwait however all countries studied saw impressive improvements. Egypt saw their largest improvements in the ecommerce sector which increased by 16% over last year. This is a very positive sign that the Egyptian population is becoming more comfortable using ecommerce services in their daily lives. Another notable area of growth is Kuwait’s marketplace services sector which increased by 11.1%. Overall, the increasing acceptance ratio means online payments are becoming more common and more accepted in the region. 100% 80% 60% 40% 20% 0 20152014 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 60% 50% 52% 39% 40% 55% 60% 52% 55% 55% 60% 50% 50% 63% 35#stateofpayments

39. ACCEPTANCE RATIO ECOMMERCE The average acceptance across the Middle East has increased dramatically in 2015. This growth was largely fuelled by Egypt,Jordan and Kuwait however all countries studied saw impressive improvements. Egypt saw their largest improvements in the ecommerce sector which increased by 16% over last year. This is a very positive sign that the Egyptian population is becoming more comfortable using ecommerce services in their daily lives. Another notable area of growth is Kuwait’s marketplace services sector which increased by 11.1%. Overall, the increasing acceptance ratio means online payments are becoming more common and more accepted in the region. 100% 80% 60% 40% 20% 0 20152014 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 69% 71% 50% 55% 50% 58% 43% 45% 39% 40% 37% 40% 50% 50% 36 #stateofpayments

40. ACCEPTANCE RATIO ENTERTAINMENT The average acceptance across the Middle East has increased dramatically in 2015. This growth was largely fuelled by Egypt,Jordan and Kuwait however all countries studied saw impressive improvements. Egypt saw their largest improvements in the ecommerce sector which increased by 16% over last year. This is a very positive sign that the Egyptian population is becoming more comfortable using ecommerce services in their daily lives. Another notable area of growth is Kuwait’s marketplace services sector which increased by 11.1%. Overall, the increasing acceptance ratio means online payments are becoming more common and more accepted in the region. 100% 80% 60% 40% 20% 0 20152014 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 60% 65% 53% 58% 52% 55% 45% 50% 50% 55% 50% 55% 52% 55% 37#stateofpayments

41. ACCEPTANCE RATIO MARKETPLACE The average acceptance across the Middle East has increased dramatically in 2015. This growth was largely fuelled by Egypt,Jordan and Kuwait however all countries studied saw impressive improvements. Egypt saw their largest improvements in the ecommerce sector which increased by 16% over last year. This is a very positive sign that the Egyptian population is becoming more comfortable using ecommerce services in their daily lives. Another notable area of growth is Kuwait’s marketplace services sector which increased by 11.1%. Overall, the increasing acceptance ratio means online payments are becoming more common and more accepted in the region. 100% 80% 60% 40% 20% 0 20152014 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 70% 78% 70% 75% 43% 45% 52% 55% 45% 50% 50% 55% 55% 58% 38 #stateofpayments

42. REFUNDS OVERVIEW Across the Middle East we observed a positive trend of reduced refund ratios with the biggest improvements occurring in Jordan (-31.7%), KSA (-25.5%) and UAE (-22.4%). These improvements were largely seen across all sectors however some of the most exciting improvements were in ecommerce. Within the UAE, KSA, Egypt and Kuwait the average improvement was -21%. Ecommerce has notable variance in refund behaviour within the region; in Egypt and KSA the refund ratio is improving, indicating consumers are more certain about their purchases where as in Lebanon their purchases may be more impulsive. 20152014 4% 3% 2% 1% 0 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 2.62% 1.95% 4.10% 3.44% 2.26% 1.81% 1.74% 1.80% 2.96% 2.02% 1.22% 1.19% 2.52% 1.96% 39#stateofpayments

43. REFUNDS UNITED ARAB EMIRATES Across the Middle East we observed a positive trend of reduced refund ratios with the biggest improvements occurring in Jordan (-31.7%), KSA (-25.5%) and UAE (-22.4%). These improvements were largely seen across all sectors however some of the most exciting improvements were in ecommerce. Within the UAE, KSA, Egypt and Kuwait the average improvement was -21%. Ecommerce has notable variance in refund behaviour within the region; in Egypt and KSA the refund ratio is improving, indicating consumers are more certain about their purchases where as in Lebanon their purchases may be more impulsive. 40 #stateofpayments 20152014 5% 4% 3% 2% 1% 0 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 2.00% 1.14% MARKETPLACE .60% .54% 5.00% 4.00% 4.02% 3.11% 1.00%1.00%

44. REFUNDS KINGDOM OF SAUDI ARABIA Across the Middle East we observed a positive trend of reduced refund ratios with the biggest improvements occurring in Jordan (-31.7%), KSA (-25.5%) and UAE (-22.4%). These improvements were largely seen across all sectors however some of the most exciting improvements were in ecommerce. Within the UAE, KSA, Egypt and Kuwait the average improvement was -21%. Ecommerce has notable variance in refund behaviour within the region; in Egypt and KSA the refund ratio is improving, indicating consumers are more certain about their purchases where as in Lebanon their purchases may be more impulsive. 41#stateofpayments 5% 4% 3% 2% 1% 0 20152014 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 1.80% 1.50% MARKETPLACE .30% .30% 5.00% 3.46% 3.00%3.00% 2.00% 2.50%

45. REFUNDS EGYPT Across the Middle East we observed a positive trend of reduced refund ratios with the biggest improvements occurring in Jordan (-31.7%), KSA (-25.5%) and UAE (-22.4%). These improvements were largely seen across all sectors however some of the most exciting improvements were in ecommerce. Within the UAE, KSA, Egypt and Kuwait the average improvement was -21%. Ecommerce has notable variance in refund behaviour within the region; in Egypt and KSA the refund ratio is improving, indicating consumers are more certain about their purchases where as in Lebanon their purchases may be more impulsive. 42 #stateofpayments 20152014 12% 10% 8% 6% 4% 2% 0 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 2.00% 2.00% MARKETPLACE .50% .20% 3.00%3.00% 12.00% 9.00% 3.00%3.00%

46. REFUNDS KUWAIT Across the Middle East we observed a positive trend of reduced refund ratios with the biggest improvements occurring in Jordan (-31.7%), KSA (-25.5%) and UAE (-22.4%). These improvements were largely seen across all sectors however some of the most exciting improvements were in ecommerce. Within the UAE, KSA, Egypt and Kuwait the average improvement was -21%. Ecommerce has notable variance in refund behaviour within the region; in Egypt and KSA the refund ratio is improving, indicating consumers are more certain about their purchases where as in Lebanon their purchases may be more impulsive. 5% 4% 3% 2% 1% 0 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 1.80% 1.50% MARKETPLACE .70% .50% 2.50% 2.00% 5.00% 4.00% 1.29% 1.05% 20152014 43#stateofpayments

47. 20152014 5% 4% 3% 2% 1% 0 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 1.00% 1.00% MARKETPLACE .22% .18% 1.50% 1.00% 4.00% 5.00% 2% 1.80% REFUNDS LEBANON Across the Middle East we observed a positive trend of reduced refund ratios with the biggest improvements occurring in Jordan (-31.7%), KSA (-25.5%) and UAE (-22.4%). These improvements were largely seen across all sectors however some of the most exciting improvements were in ecommerce. Within the UAE, KSA, Egypt and Kuwait the average improvement was -21%. Ecommerce has notable variance in refund behaviour within the region; in Egypt and KSA the refund ratio is improving, indicating consumers are more certain about their purchases where as in Lebanon their purchases may be more impulsive. 44 #stateofpayments

48. REFUNDS JORDAN Across the Middle East we observed a positive trend of reduced refund ratios with the biggest improvements occurring in Jordan (-31.7%), KSA (-25.5%) and UAE (-22.4%). These improvements were largely seen across all sectors however some of the most exciting improvements were in ecommerce. Within the UAE, KSA, Egypt and Kuwait the average improvement was -21%. Ecommerce has notable variance in refund behaviour within the region; in Egypt and KSA the refund ratio is improving, indicating consumers are more certain about their purchases where as in Lebanon their purchases may be more impulsive. 45#stateofpayments 20152014 10% 8% 6% 4% 2% 0 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 1.00% 1.00% MARKETPLACE .30% .10% 9.00% 6.00% 1.50% 1.00% 3.00% 2.00%

49. REFUNDS QATAR Across the Middle East we observed a positive trend of reduced refund ratios with the biggest improvements occurring in Jordan (-31.7%), KSA (-25.5%) and UAE (-22.4%). These improvements were largely seen across all sectors however some of the most exciting improvements were in ecommerce. Within the UAE, KSA, Egypt and Kuwait the average improvement was -21%. Ecommerce has notable variance in refund behaviour within the region; in Egypt and KSA the refund ratio is improving, indicating consumers are more certain about their purchases where as in Lebanon their purchases may be more impulsive. 46 #stateofpayments 20152014 3% 2% 1% 0 AIRLINES TRAVEL ECOMMERCE ENTERTAINMENT 1.00% 1.00% MARKETPLACE .12% .10% 2.00% 2.47% 1.50% 1.40% 1.50% 1.00%

50. REFUNDS AIRLINES Across the Middle East we observed a positive trend of reduced refund ratios with the biggest improvements occurring in Jordan (-31.7%), KSA (-25.5%) and UAE (-22.4%). These improvements were largely seen across all sectors however some of the most exciting improvements were in ecommerce. Within the UAE, KSA, Egypt and Kuwait the average improvement was -21%. Ecommerce has notable variance in refund behaviour within the region; in Egypt and KSA the refund ratio is improving, indicating consumers are more certain about their purchases where as in Lebanon their purchases may be more impulsive. 47#stateofpayments 20152014 3% 2% 1% 0 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 3.00% 2.00% 1.29% 1.05% 2.00% 1.80% 1.50% 1.00% 1.50% 1.40% 3.00%3.00% 1.00%1.00%

51. REFUNDS TRAVEL Across the Middle East we observed a positive trend of reduced refund ratios with the biggest improvements occurring in Jordan (-31.7%), KSA (-25.5%) and UAE (-22.4%). These improvements were largely seen across all sectors however some of the most exciting improvements were in ecommerce. Within the UAE, KSA, Egypt and Kuwait the average improvement was -21%. Ecommerce has notable variance in refund behaviour within the region; in Egypt and KSA the refund ratio is improving, indicating consumers are more certain about their purchases where as in Lebanon their purchases may be more impulsive. 20152014 5% 4% 3% 2% 1% 0 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 5.00% 3.46% 2.50% 2.00% 1.50% 1.00% 3.00% 2.00% 1.50% 1.00% 3.00%3.00% 5.00% 4.00% 48 #stateofpayments

52. REFUNDS ECOMMERCE Across the Middle East we observed a positive trend of reduced refund ratios with the biggest improvements occurring in Jordan (-31.7%), KSA (-25.5%) and UAE (-22.4%). These improvements were largely seen across all sectors however some of the most exciting improvements were in ecommerce. Within the UAE, KSA, Egypt and Kuwait the average improvement was -21%. Ecommerce has notable variance in refund behaviour within the region; in Egypt and KSA the refund ratio is improving, indicating consumers are more certain about their purchases where as in Lebanon their purchases may be more impulsive. 49#stateofpayments 20152014 12% 10% 8% 6% 4% 2% 0 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 4.02% 3.11% 3.00% 12.00% 9.00% 4.00% 5.00% 9.00% 6.00% 2.00% 2.47%2.50% 5.00% 4.00%

53. REFUNDS ENTERTAINMENT Across the Middle East we observed a positive trend of reduced refund ratios with the biggest improvements occurring in Jordan (-31.7%), KSA (-25.5%) and UAE (-22.4%). These improvements were largely seen across all sectors however some of the most exciting improvements were in ecommerce. Within the UAE, KSA, Egypt and Kuwait the average improvement was -21%. Ecommerce has notable variance in refund behaviour within the region; in Egypt and KSA the refund ratio is improving, indicating consumers are more certain about their purchases where as in Lebanon their purchases may be more impulsive. 2% 1% 0 20152014 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 1.80% 1.50% 1.80% 1.50% 1.00%1.00% 1.00% 1.00% 1.00%1.00% 2.00%2.00%2.00% 1.14% 50 #stateofpayments

54. REFUNDS MARKETPLACE Across the Middle East we observed a positive trend of reduced refund ratios with the biggest improvements occurring in Jordan (-31.7%), KSA (-25.5%) and UAE (-22.4%). These improvements were largely seen across all sectors however some of the most exciting improvements were in ecommerce. Within the UAE, KSA, Egypt and Kuwait the average improvement was -21%. Ecommerce has notable variance in refund behaviour within the region; in Egypt and KSA the refund ratio is improving, indicating consumers are more certain about their purchases where as in Lebanon their purchases may be more impulsive. 20152014 1% 0.8% 0.6% 0.4% 0.2% 0 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR .30% .70% .50% .22% .18% .30% .10% .12% .10% .50% .20% .60% .54% .30% 51#stateofpayments

55. SEASONALITY AIRLINES TX NUMBERS Throughout 2015 there has been positive growth at both country and industry levels. Shopper behaviour has shifted slightly with regards to seasonality with major purchases taking place at different times in 2015. Airlines saw an increase in both the number of transactions and overall volume and the distribution of transactions across the year shifted dramatically. In 2014 we saw selective months signiﬁcantly outperforming others, while in 2015 we saw a healthier distribution. New trends were also observed in the ecommerce sector with a spike in November shopping relating to the holiday season and promotions during those times. 4,475 16k 12k 8K 4K 0 -4k -8k -12k -16k JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC -8,339 -8,479 739 -6,437 -1,227 -2,280 -1,984 2,036 9,328 1,231 10,934 2015 52 #stateofpayments

56. SEASONALITY AIRLINES TX VOLUME Throughout 2015 there has been positive growth at both country and industry levels. Shopper behaviour has shifted slightly with regards to seasonality with major purchases taking place at different times in 2015. Airlines saw an increase in both the number of transactions and overall volume and the distribution of transactions across the year shifted dramatically. In 2014 we saw selective months signiﬁcantly outperforming others, while in 2015 we saw a healthier distribution. New trends were also observed in the ecommerce sector with a spike in November shopping relating to the holiday season and promotions during those times. $12m $9m $6m $3m 0m $-3m $-6m $-9m $-12m -9.8m 0.68m -3.4m 1.8m 5.3m 9.3m 10.8m 5.3m -4.8m -5.9m -0.47m -8.7m 2015 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 53#stateofpayments

57. SEASONALITY TRAVEL TX NUMBERS Throughout 2015 there has been positive growth at both country and industry levels. Shopper behaviour has shifted slightly with regards to seasonality with major purchases taking place at different times in 2015. Airlines saw an increase in both the number of transactions and overall volume and the distribution of transactions across the year shifted dramatically. In 2014 we saw selective months signiﬁcantly outperforming others, while in 2015 we saw a healthier distribution. New trends were also observed in the ecommerce sector with a spike in November shopping relating to the holiday season and promotions during those times. 35k 30k 25K 20K 15k 10k 5k 0 -5k -10k -15K -20K -25k -30k -35k 17,777 -25,389 -21,267 -12,637 -11,256 -2,780 4,724 4,844 15,905 13,952 8,683 7,446 2015 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 54 #stateofpayments

58. SEASONALITY TRAVEL TX VOLUME Throughout 2015 there has been positive growth at both country and industry levels. Shopper behaviour has shifted slightly with regards to seasonality with major purchases taking place at different times in 2015. Airlines saw an increase in both the number of transactions and overall volume and the distribution of transactions across the year shifted dramatically. In 2014 we saw selective months signiﬁcantly outperforming others, while in 2015 we saw a healthier distribution. New trends were also observed in the ecommerce sector with a spike in November shopping relating to the holiday season and promotions during those times. $12m $8m $4m 0m $-4m $-8m $-12m -12.1m -9.7m -5.5m -6.7m -2.9m 5.7m 10.8m 9.0m 5.5m 0.76m -0.16m 5.3m 2015 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 55#stateofpayments

59. SEASONALITY ECOMMERCE TX NUMBER Throughout 2015 there has been positive growth at both country and industry levels. Shopper behaviour has shifted slightly with regards to seasonality with major purchases taking place at different times in 2015. Airlines saw an increase in both the number of transactions and overall volume and the distribution of transactions across the year shifted dramatically. In 2014 we saw selective months signiﬁcantly outperforming others, while in 2015 we saw a healthier distribution. New trends were also observed in the ecommerce sector with a spike in November shopping relating to the holiday season and promotions during those times. 200k 160k 120K 80K 40k 0k -40k -80k -120k -160k -200k 46,953 -69,854 -72,958 18,467 -35,760 -27,008 1,815 -37,754 -39,470 21,805 180,913 2015 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 12,851 56 #stateofpayments

60. SEASONALITY ECOMMERCE TX VOLUME Throughout 2015 there has been positive growth at both country and industry levels. Shopper behaviour has shifted slightly with regards to seasonality with major purchases taking place at different times in 2015. Airlines saw an increase in both the number of transactions and overall volume and the distribution of transactions across the year shifted dramatically. In 2014 we saw selective months signiﬁcantly outperforming others, while in 2015 we saw a healthier distribution. New trends were also observed in the ecommerce sector with a spike in November shopping relating to the holiday season and promotions during those times. $40m $30m $20m $10m 0m $-10m $-20m $-30m $-40m -12m -13.6m -8.1m -3.5m -6.6m -4.5m -4.4m 2.5m 39.7m -1.4m 5.2m 6.9m 2015 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 57#stateofpayments

61. SEASONALITY ENTERTAINMENT TX NUMBER Throughout 2015 there has been positive growth at both country and industry levels. Shopper behaviour has shifted slightly with regards to seasonality with major purchases taking place at different times in 2015. Airlines saw an increase in both the number of transactions and overall volume and the distribution of transactions across the year shifted dramatically. In 2014 we saw selective months signiﬁcantly outperforming others, while in 2015 we saw a healthier distribution. New trends were also observed in the ecommerce sector with a spike in November shopping relating to the holiday season and promotions during those times. 10k 8k 6K 4K 2k 0k -2k -4k -6k -8k -10k 5,407 -2,858 -570 1,464 -1,693 -4,533 -2,295 -6 1,028 2,386 6,893 -5,219 2015 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 58 #stateofpayments

62. SEASONALITY ENTERTAINMENT TX VOLUME Throughout 2015 there has been positive growth at both country and industry levels. Shopper behaviour has shifted slightly with regards to seasonality with major purchases taking place at different times in 2015. Airlines saw an increase in both the number of transactions and overall volume and the distribution of transactions across the year shifted dramatically. In 2014 we saw selective months signiﬁcantly outperforming others, while in 2015 we saw a healthier distribution. New trends were also observed in the ecommerce sector with a spike in November shopping relating to the holiday season and promotions during those times. $4m $3m $2m $1m 0m $-1m $-2m $-3m $-4m -0.59m -0.47m 0.07m 0.14m 0.08m -0.83m 0.08m 0.30m -0.30m -0.26m 2m -0.27m 2015 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 59#stateofpayments

63. SEASONALITY MARKETPLACE TX NUMBER Throughout 2015 there has been positive growth at both country and industry levels. Shopper behaviour has shifted slightly with regards to seasonality with major purchases taking place at different times in 2015. Airlines saw an increase in both the number of transactions and overall volume and the distribution of transactions across the year shifted dramatically. In 2014 we saw selective months signiﬁcantly outperforming others, while in 2015 we saw a healthier distribution. New trends were also observed in the ecommerce sector with a spike in November shopping relating to the holiday season and promotions during those times. -8,529 -9,902 -6,201 -4,120 -1,317 -325 378 3,850 4,369 7,683 7,750 10k 8k 6K 4K 2k 0k -2k -4k -6k -8k -10k 6,364 2015 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 60 #stateofpayments

64. SEASONALITY MARKETPLACE TX VOLUME Throughout 2015 there has been positive growth at both country and industry levels. Shopper behaviour has shifted slightly with regards to seasonality with major purchases taking place at different times in 2015. Airlines saw an increase in both the number of transactions and overall volume and the distribution of transactions across the year shifted dramatically. In 2014 we saw selective months signiﬁcantly outperforming others, while in 2015 we saw a healthier distribution. New trends were also observed in the ecommerce sector with a spike in November shopping relating to the holiday season and promotions during those times. $1m $.80m $.60m $.40m $.20m 0 $-.20m $-.40m $-.60m $-.80m $-1m -1m -0.82m -0.70m -0.40m -0.03m 0.54m 0.55m 0.81m 1m -0.11m 0.74m -0.54m 2015 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 61#stateofpayments

65. Understand the population that is Driving Innovation

66. 100m 80m 60m 40m 20m 0 POPULATION A large portion of the Arab World is concentrated within the population centers of Saudi Arabia and Egypt. Though these two markets represent some of the greatest opportunity for ecommerce in the region, both present unique challenges for businesses. Within Saudi Arabia the mobile web is becoming the go to platform for day to day browsing and ecommerce alike, but with roughly 1 in 2 Saudi’s still concerned over online payment security, businesses need to better communicate their security features if they want to succeed. In Egypt desktop browsing remains king with roughly 3 out of 4 shoppers using the platform to complete their online shopping. Credit card access continues to be a barrier for online shopping in the country and 40% shoppers claim it prevents them from exploring online shopping. Overall populations in the Arab World are continuing grow increasing by 2.1% over 2014. KSA QATAR 30.8m 31.5m JORDAN 6.6m 6.7m 2.1m 2.2m 2014 2015 UAE 9.0m 9.1m EGYPT 89.5m 90.6m KUWAIT 3.7m 3.9m LEBANON 4.5m 4.6m 63#stateofpayments

67. 40m 30m 20m 10m 0m 8.5m 8.2m 20.8m 19.6m 31.4m 28.3m 3.1m 2.9m 3.6m 3.3m 3.2m 2.9m 2.0m 1.9m INTERNET USER Internet users continue to grow at a rapid pace, increasing by roughly 13.1% over the previous year. Egypt continues to be the largest internet market in the region followed by Saudi Arabia and Morocco. Though these countries represent over ¾ of the regions internet users, internet penetration remains relatively low; ranging between 35% for Egypt and 65% for Saudi Arabia. In contrast countries like the UAE, Qatar, and Kuwait have seen further internet penetration and now represent some of the region’s most mature internet populations. As more users move online expect to see more pressure to develop the Arab World’s ecommerce industry. 2014 2015 UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR 64 #stateofpayments

68. 20m 15m 10m 5m 0m UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR ONLINE BUYERS In line with the growth of the region’s online population the number of online buyers has increased by nearly 14% over 2014 values. This increase is a positive sign that ecommerce is continuing to gain traction across the Arab World. Egypt continues to represent the region’s largest online population with an 18 Million customers taking advantage of online shopping opportunities. Despite this large number of online shoppers, when looked at in terms of proportion of population Egypt remains behind all other countries studied. Leading the region, the UAE has the highest number of online buyers as a proportion of the population with just over 70%. Interesting, when looking at the number of online buyers as a portion of the internet users in a country, it is Kuwait that comes out a head with 82% of its online population shopping online. 7.0m 6.8m 12.0m 10.6m 17.7m 15.2m 2.6m 2.4m 2.1m 1.6m 1.3m 1.6m 1.2m .94m 2014 2015 65#stateofpayments

69. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0 82.1% 41.3% 46.1% 49.1% 36.9% 55.2% TWITTER FACEBOOK GOOGLE+ LINKEDIN INSTAGRAM PINTEREST WORDPRESS FLICKR YOUTUBE IDONOTUSESOCIALMEDIA 15.2% 5.8% 4.4% 6.1% SOCIAL NETWORKS UNITED ARAB EMIRATES Just like other areas of the world, the Middle East has embraced social media. It is estimatedthat between 85% and 90% of the region’s online population use social media daily representing a potential audience of nearly 100 million people. With such a massive number of potential customers browsing daily it’s no wonder businesses are scrambling to improve their social presence. The popularity of social networks varies across the region. Facebook remains the Middle East’s most popular network however its presence is notability weaker in the KSA and Kuwait. A fairly new entrant to the social media landscape, Pinterest is gaining popularity across the region led by a 21% usage rate in Qatar. 66 #stateofpayments

70. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0 64.5% 54.6% 44.7% 24.8% 52.2% 52.4% TWITTER FACEBOOK GOOGLE+ LINKEDIN INSTAGRAM PINTEREST WORDPRESS FLICKR YOUTUBE 6.6% 3.2% 5.1% 5.2% SOCIAL NETWORKS KINGDOM OF SAUDI ARABIA Just like other areas of the world, the Middle East has embraced social media. It is estimatedthat between 85% and 90% of the region’s online population use social media daily representing a potential audience of nearly 100 million people. With such a massive number of potential customers browsing daily it’s no wonder businesses are scrambling to improve their social presence. The popularity of social networks varies across the region. Facebook remains the Middle East’s most popular network however its presence is notability weaker in the KSA and Kuwait. A fairly new entrant to the social media landscape, Pinterest is gaining popularity across the region led by a 21% usage rate in Qatar. IDONOTUSESOCIALMEDIA 67#stateofpayments

71. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0 93.4% 60.5% 70.4% 32.1% 35.8% 6.7% 66.4% TWITTER FACEBOOK GOOGLE+ LINKEDIN INSTAGRAM PINTEREST WORDPRESS FLICKR YOUTUBE 9.4% 5.2% 1.4% SOCIAL NETWORKS EGYPT Just like other areas of the world, the Middle East has embraced social media. It is estimatedthat between 85% and 90% of the region’s online population use social media daily representing a potential audience of nearly 100 million people. With such a massive number of potential customers browsing daily it’s no wonder businesses are scrambling to improve their social presence. The popularity of social networks varies across the region. Facebook remains the Middle East’s most popular network however its presence is notability weaker in the KSA and Kuwait. A fairly new entrant to the social media landscape, Pinterest is gaining popularity across the region led by a 21% usage rate in Qatar. IDONOTUSESOCIALMEDIA 68 #stateofpayments

72. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0 76.5% 49.0% 51.4% 38.0% 51.8% 61.2% TWITTER FACEBOOK GOOGLE+ LINKEDIN INSTAGRAM PINTEREST WORDPRESS FLICKR YOUTUBE 11.0% 5.1% 3.5% 7.5% SOCIAL NETWORKS KUWAIT Just like other areas of the world, the Middle East has embraced social media. It is estimatedthat between 85% and 90% of the region’s online population use social media daily representing a potential audience of nearly 100 million people. With such a massive number of potential customers browsing daily it’s no wonder businesses are scrambling to improve their social presence. The popularity of social networks varies across the region. Facebook remains the Middle East’s most popular network however its presence is notability weaker in the KSA and Kuwait. A fairly new entrant to the social media landscape, Pinterest is gaining popularity across the region led by a 21% usage rate in Qatar. IDONOTUSESOCIALMEDIA 69#stateofpayments

73. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0 93.4% 53.0% 43.0% 50.3% 49.7% 47.7% FACEBOOK GOOGLE+ LINKEDIN INSTAGRAM PINTEREST WORDPRESS FLICKR YOUTUBE 14.6% 4.6% 2.0% 2.6% SOCIAL NETWORKS LEBANON Just like other areas of the world, the Middle East has embraced social media. It is estimatedthat between 85% and 90% of the region’s online population use social media daily representing a potential audience of nearly 100 million people. With such a massive number of potential customers browsing daily it’s no wonder businesses are scrambling to improve their social presence. The popularity of social networks varies across the region. Facebook remains the Middle East’s most popular network however its presence is notability weaker in the KSA and Kuwait. A fairly new entrant to the social media landscape, Pinterest is gaining popularity across the region led by a 21% usage rate in Qatar. IDONOTUSESOCIALMEDIA TWITTER 70 #stateofpayments

74. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0 88.5% 46.0% 54.0% 44.1% 37.5% 51.0% TWITTER FACEBOOK GOOGLE+ LINKEDIN INSTAGRAM PINTEREST WORDPRESS FLICKR YOUTUBE 10.3% 3.4% 5.1% 4.9% SOCIAL NETWORKS JORDAN Just like other areas of the world, the Middle East has embraced social media. It is estimatedthat between 85% and 90% of the region’s online population use social media daily representing a potential audience of nearly 100 million people. With such a massive number of potential customers browsing daily it’s no wonder businesses are scrambling to improve their social presence. The popularity of social networks varies across the region. Facebook remains the Middle East’s most popular network however its presence is notability weaker in the KSA and Kuwait. A fairly new entrant to the social media landscape, Pinterest is gaining popularity across the region led by a 21% usage rate in Qatar. IDONOTUSESOCIALMEDIA 71#stateofpayments

75. 84.8% 47.7% 55.0% 49.7% 52.3% 60.9% TWITTER FACEBOOK GOOGLE+ LINKEDIN INSTAGRAM PINTEREST WORDPRESS FLICKR YOUTUBE 21.2% 6.0% 4.0% 6.6% SOCIAL NETWORKS QATAR Just like other areas of the world, the Middle East has embraced social media. It is estimatedthat between 85% and 90% of the region’s online population use social media daily representing a potential audience of nearly 100 million people. With such a massive number of potential customers browsing daily it’s no wonder businesses are scrambling to improve their social presence. The popularity of social networks varies across the region. Facebook remains the Middle East’s most popular network however its presence is notability weaker in the KSA and Kuwait. A fairly new entrant to the social media landscape, Pinterest is gaining popularity across the region led by a 21% usage rate in Qatar. IDONOTUSESOCIALMEDIA 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0 72 #stateofpayments

76. 60% 40% 66% 34% 62% 38% 78% 22% 73% 27% 72% 28% 66% 34% UAE KSA EGYPT KUWAIT LEBANON JORDAN QATAR BUYERS BY GENDERS Male shoppers continue to buy more online than women. This trend is most pronounced in Egypt where men account for nearly 80% of all online transactions. The UAE shows more female inclusion in the online economy with females accounting for 40% of all online transactions. With the online economy becoming a critical aspect of day to day life, it should be a focus of Arab governments to help extend these technologies to the entire population. 73#stateofpayments

77. AGE GROUP UNITED ARAB EMIRATES 30-34 year olds now represent the largest ecommerce market in the Arab World. Brands looking to succeed in Middle Eastern markets will have to ensure that large portion of their marketing efforts appeal to them. Firms in Saudi Arabia, Egypt, and Lebanon should also look to target the younger 18-25 bracket as this age group accounts for a substantial portion of the online shopping population. One notable outlierfound in our demographics research is Qatar’s older, 40+ age group appears to be veryactive in the ecommerce space. Companies that look to target this demographic may want to explore Qatar for further ecommerce expansion. 18-25 26-35 36-40 41-50 51+ 23% 17% 23% 13% 24% 50% 40% 30% 20% 10% 0 74 #stateofpayments

78. AGE GROUP KINGDOM OF SAUDI ARABIA 30-34 year olds now represent the largest ecommerce market in the Arab World. Brands looking to succeed in Middle Eastern markets will have to ensure that large portion of their marketing efforts appeal to them. Firms in Saudi Arabia, Egypt, and Lebanon should also look to target the younger 18-25 bracket as this age group accounts for a substantial portion of the online shopping population. One notable outlierfound in our demographics research is Qatar’s older, 40+ age group appears to be veryactive in the ecommerce space. Companies that look to target this demographic may want to explore Qatar for further ecommerce expansion. 18-25 26-35 36-40 41-50 51+ 26% 14% 21% 17% 22% 50% 40% 30% 20% 10% 0 75#stateofpayments

79. AGE GROUP EGYPT 30-34 year olds now represent the largest ecommerce market in the Arab World. Brands looking to succeed in Middle Eastern markets will have to ensure that large portion of their marketing efforts appeal to them. Firms in Saudi Arabia, Egypt, and Lebanon should also look to target the younger 18-25 bracket as this age group accounts for a substantial portion of the online shopping population. One notable outlierfound in our demographics research is Qatar’s older, 40+ age group appears to be veryactive in the ecommerce space. Companies that look to target this demographic may want to explore Qatar for further ecommerce expansion. 18-25 26-35 36-40 41-50 51+ 23% 14% 18% 25% 20% 50% 40% 30% 20% 10% 0 76 #stateofpayments

80. AGE GROUP KUWAIT 30-34 year olds now represent the largest ecommerce market in the Arab World. Brands looking to succeed in Middle Eastern markets will have to ensure that large portion of their marketing efforts appeal to them. Firms in Saudi Arabia, Egypt, and Lebanon should also look to target the younger 18-25 bracket as this age group accounts for a substantial portion of the online shopping population. One notable outlierfound in our demographics research is Qatar’s older, 40+ age group appears to be veryactive in the ecommerce space. Companies that look to target this demographic may want to explore Qatar for further ecommerce expansion. 18-25 26-35 36-40 41-50 51+ 33% 15% 19% 9% 24% 50% 40% 30% 20% 10% 0 77#stateofpayments

81. AGE GROUP LEBANON 30-34 year olds now represent the largest ecommerce market in the Arab World. Brands looking to succeed in Middle Eastern markets will have to ensure that large portion of their marketing efforts appeal to them. Firms in Saudi Arabia, Egypt, and Lebanon should also look to target the younger 18-25 bracket as this age group accounts for a substantial portion of the online shopping population. One notable outlierfound in our demographics research is Qatar’s older, 40+ age group appears to be veryactive in the ecommerce space. Companies that look to target this demographic may want to explore Qatar for further ecommerce expansion. 18-25 26-35 36-40 41-50 51+ 25% 15% 18%17% 25% 50% 40% 30% 20% 10% 0 78 #stateofpayments

82. AGE GROUP JORDAN 30-34 year olds now represent the largest ecommerce market in the Arab World. Brands looking to succeed in Middle Eastern markets will have to ensure that large portion of their marketing efforts appeal to them. Firms in Saudi Arabia, Egypt, and Lebanon should also look to target the younger 18-25 bracket as this age group accounts for a substantial portion of the online shopping population. One notable outlierfound in our demographics research is Qatar’s older, 40+ age group appears to be veryactive in the ecommerce space. Companies that look to target this demographic may want to explore Qatar for further ecommerce expansion. 18-25 26-35 36-40 41-50 51+ 19% 18% 27% 17% 19% 50% 40% 30% 20% 10% 0 79#stateofpayments

83. AGE GROUP QATAR 30-34 year olds now represent the largest ecommerce market in the Arab World. Brands looking to succeed in Middle Eastern markets will have to ensure that large portion of their marketing efforts appeal to them. Firms in Saudi Arabia, Egypt, and Lebanon should also look to target the younger 18-25 bracket as this age group accounts for a substantial portion of the online shopping population. One notable outlierfound in our demographics research is Qatar’s older, 40+ age group appears to be veryactive in the ecommerce space. Companies that look to target this demographic may want to explore Qatar for further ecommerce expansion. 18-25 26-35 36-40 41-50 51+ 23% 19%19% 11% 28% 50% 40% 30% 20% 10% 0 80 #stateofpayments

84. 4% 8% 14% 22% 32% 19% Less than $266 $266 - 532 $533 - 1065 $1066 - 2665 $2666+ Prefer no to say/Don’t know INCOME LEVEL UNITED ARAB EMIRATES The spread of income distribution remains fairly consistent across Qatar, Kuwait, the UAE, Saudi Arabia and Lebanon. These countries all see a large proportion of their population fall within the higher income brackets. Qatar tops our list with 67% of respondents identifying in the top two income brackets. Egypt and Jordan on the other hand have a larger proportion of consumers that fall into the lower end of the income spectrum. For Egypt 68% of respondents identiﬁed in the sub $1,065 per month brackets; in Jordan this number was 56%. For businesses looking to break into the various countries across the region it will be important to understand the income landscape and provide products tailored the countries average income level. 50% 40% 30% 20% 10% 0 81#stateofpayments

85. 10% 14% 15% 22% 17% 22% Less than $266 $266 - 532 $533 - 1065 $1066 - 2665 $2666+ Prefer no to say/Don’t know INCOME LEVEL KINGDOM OF SAUDI ARABIA The spread of income distribution remains fairly consistent across Qatar, Kuwait, the UAE, Saudi Arabia and Lebanon. These countries all see a large proportion of their population fall within the higher income brackets. Qatar tops our list with 67% of respondents identifying in the top two income brackets. Egypt and Jordan on the other hand have a larger proportion of consumers that fall into the lower end of the income spectrum. For Egypt 68% of respondents identiﬁed in the sub $1,065 per month brackets; in Jordan this number was 56%. For businesses looking to break into the various countries across the region it will be important to understand the income landscape and provide products tailored the countries average income level. 50% 40% 30% 20% 10% 0 82 #stateofpayments

86. 22% 26% 20% 10% 5% 17% Less than $266 $266 - 532 $533 - 1065 $1066 - 2665 $2666+ Prefer no to say/Don’t know INCOME LEVEL EGYPT The spread of income distribution remains fairly consistent across Qatar, Kuwait, the UAE, Saudi Arabia and Lebanon. These countries all see a large proportion of their population fall within the higher income brackets. Qatar tops our list with 67% of respondents identifying in the top two income brackets. Egypt and Jordan on the other hand have a larger proportion of consumers that fall into the lower end of the income spectrum. For Egypt 68% of respondents identiﬁed in the sub $1,065 per month brackets; in Jordan this number was 56%. For businesses looking to break into the various countries across the region it will be important to understand the income landscape and provide products tailored the countries average income level. 50% 40% 30% 20% 10% 0 83#stateofpayments

87. 5% 5% 14% 30% 29% 17% Less than $266 $266 - 532 $533 - 1065 $1066 - 2665 $2666+ Prefer no to say/Don’t know INCOME LEVEL KUWAIT The spread of income distribution remains fairly consistent across Qatar, Kuwait, the UAE, Saudi Arabia and Lebanon. These countries all see a large proportion of their population fall within the higher income brackets. Qatar tops our list with 67% of respondents identifying in the top two income brackets. Egypt and Jordan on the other hand have a larger proportion of consumers that fall into the lower end of the income spectrum. For Egypt 68% of respondents identiﬁed in the sub $1,065 per month brackets; in Jordan this number was 56%. For businesses looking to break into the various countries across the region it will be important to understand the income landscape and provide products tailored the countries average income level. 50% 40% 30% 20% 10% 0 84 #stateofpayments

88. 5% 8% 14% 30% 32% 11% Less than $266 $266 - 532 $533 - 1065 $1066 - 2665 $2666+ Prefer no to say/Don’t know INCOME LEVEL LEBANON The spread of income distribution remains fairly consistent across Qatar, Kuwait, the UAE, Saudi Arabia and Lebanon. These countries all see a large proportion of their population fall within the higher income brackets. Qatar tops our list with 67% of respondents identifying in the top two income brackets. Egypt and Jordan on the other hand have a larger proportion of consumers that fall into the lower end of the income spectrum. For Egypt 68% of respondents identiﬁed in the sub $1,065 per month brackets; in Jordan this number was 56%. For businesses looking to break into the various countries across the region it will be important to understand the income landscape and provide products tailored the countries average income level. 50% 40% 30% 20% 10% 0 85#stateofpayments

89. 5% 19% 32% 28% 7% 9% Less than $266 $266 - 532 $533 - 1065 $1066 - 2665 $2666+ Prefer no to say/Don’t know INCOME LEVEL JORDAN The spread of income distribution remains fairly consistent across Qatar, Kuwait, the UAE, Saudi Arabia and Lebanon. These countries all see a large proportion of their population fall within the higher income brackets. Qatar tops our list with 67% of respondents identifying in the top two income brackets. Egypt and Jordan on the other hand have a larger proportion of consumers that fall into the lower end of the income spectrum. For Egypt 68% of respondents identiﬁed in the sub $1,065 per month brackets; in Jordan this number was 56%. For businesses looking to break into the various countries across the region it will be important to understand the income landscape and provide products tailored the countries average income level. 50% 40% 30% 20% 10% 0 86 #stateofpayments

90. 3% 13% 5% 25% 42% 12% Less than $266 $266 - 532 $533 - 1065 $1066 - 2665 $2666+ Prefer no to say/Don’t know INCOME LEVEL QATAR The spread of income distribution remains fairly consistent across Qatar, Kuwait, the UAE, Saudi Arabia and Lebanon. These countries all see a large proportion of their population fall within the higher income brackets. Qatar tops our list with 67% of respondents identifying in the top two income brackets. Egypt and Jordan on the other hand have a larger proportion of consumers that fall into the lower end of the income spectrum. For Egypt 68% of respondents identiﬁed in the sub $1,065 per month brackets; in Jordan this number was 56%. For businesses looking to break into the various countries across the region it will be important to understand the income landscape and provide products tailored the countries average income level. 50% 40% 30% 20% 10% 0 87#stateofpayments

91. Inside the mind of today’s Arab shoppers

92. SHOP OFFLINE RESEARCH ONLINE, SHOP ONLINE RESEARCH OFFLINE, SHOP OFFLINE RESEARCH ONLINE, SHOP ONLINE OR OFFLINE DEPENDING ON PRICE RESEARCH ONLINE SHOP ONLINE RESEARCH OFFLINE 17% 21% 2% 31% 29% UAELEA DS ONLINE SHOP PINGBY The role the internet plays in consumer shopping remains varied. 17% of shoppers say they complete their entire shopping journey online and 67% are doing their research online. For many users the cost of an item is a major consideration when choosing between purchasing online or offline, 29% of shoppers say price is the deciding factor. This is particularly true for the UAE where 39% of shoppers say the price of a product affects whether they buy online. Across the Middle East online shopping continues to grow with 61% of the population shopping online. The UAE is leading the region with 71% of the country shopping online; both Jordan and Morocco remain behind with 50% of the population remaining offline. SHOPPING BEHAVIOUR INTHE REGION ONLINESHOPPING INTHEARABWORLD CONSUMER SURVEY INFOGRAPHIC Understanding the unique demographics and habits of consumers across the Middle East is a powerful tool for businesses within the region. This year we’ve collected a range of information you can use to better adapt to the Middle East’s unique consumerbase. With data coveringthe offlineto onlinetransition, preferred payment options, as well as securityand privacy concerns, this infographic provides everything you need to better understand the Middle Eastern ecommerce market.

93. Online shoppers in the region are slowly increasing their purchase frequency with 53% of the population making at least one purchase per month. Though still lagging behind more developed online marketplaces, this is a positive sign that conﬁdence in Arab ecommerce is continuing to grow. KUWAITI SHOP VIA MOBILE 56% EGYPTIANS SHOP VIA MOBILE 42% 67% DESKTOP 24% TABLETS 49% MOBILE ONLINE SHOPPING FREQUENCY 7% 9% 16% 21% 14% 34% TWICE A MONTH ONCE A MONTH TWICE A WEEK ONCE PER WEEK ONCE IN 2 MONTHS ONCE IN 3 - 6 MONTHS 53%PURCHASE AT LEAST ONCE PER MONTH

94. DEVICE OF CHOICE FOR ONLINE SHOPPERS The introduction of tablets and smartphones has opened a range of innovative shopping experiences around the world and the Arab market is no exception. Mobile devices are quickly becoming a staple of ecommerce with nearly 50% of customers using their phones to complete their online shopping. In countries with high smartphone penetration such as Kuwait, mobile based shopping has been adopted by 56% of the population. In contrast Egypt currently only has 42% of its population shopping via mobile devices. ONLINE SHOPPING IS COMFORTABLE 8% FITS MY BUSY LIFESTYLE 4% EASY RETURNS 4% OTHERS 2% PRODUCT VARIETY 27% UNIQUE STUFF 23% BETTER PRICES 33% WHYDO YOU SHOP ONLINE? Online shopping can offer many advantages over traditional brick and mortar stores. For the Arab world, the wide variety of products is a major driver for shopping online. Other important factors include the ability to ﬁnd ‘niche’ products and overall better deals. Surprisingly ‘convenience’ does not appear to be a consideration for Arab shoppers. 89#stateofpayments

95. Arab shoppers are buying a range of products and services online. Mobile phones proved to be the most popular products with 45% of shoppers claiming to have bought their device online. Flight tickets also remain a common product with clothing, bill payments and watch purchases rounding out the top 5. WHATTYPE OF PRODUCTS ARE ARAB SHOPPERS BUYING 38% UTILITIES BILLS 40% CLOTHES 44% FLIGHT TICKETS 45% MOBILE PHONES 33% WATCHES 24% BAGS 26% LAPTOPS 26% SHOES 29% HOME APPLIANCES 31% PERFUMES 3% OTHERS 13% HOME FURNISHINGS 15% COLLECTIBLES 19% CAMERAS 21% BOOKS 23% TABLETS, PCS 12% TVS 12% VIRTUAL GOODS 8% HOME DXB - HYD 3:26

96. TOP FIVE PRODUCTS BYCOUNTRY MOBILE PHONESEGYPT UTILITIES BILLS LAPTOPS TABLETS CLOTHES 61% 38% 37% 35% 34% UAE FLIGHT TICKETS CLOTHES MOBILE PHONES UTILITIES BILL WATCHES 55% 43% 42% 36% 35% KSA CLOTHES FLIGHT TICKETS WATCHES MOBILE PHONES UTILITIES BILL 41% 40% 38% 38% 38% KUWAIT FLIGHT TICKETS UTILITIES BILLS PERFUMES CLOTHES MOBILE PHONES 55% 48% 39% 36% 35% WHAT SITES ARE POPULAR INTHE ARAB WORLD 90#stateofpayments Souq.com has found the most success in the region with nearly 75% of shoppers going to the site for their shopping needs. Despite minimal support in the region Amazon is the number two site, likely a result of their vast inventory and range of niche products. 40% 74% 20% 6%8% 4O% 21% 14% 12% OTHERS

97. With better prices bringing more Arab shoppers into the online realm, it’s no surprise that when it comes to completing the transaction price has the biggest influence. Fifty five percent of shoppers say that the ‘best deal’ impacts their final decision. Past experience with the website as well as product reviews and recommendations from friends also affect a shopper’s decision to buy. While ads and email marketing have some impact, price and third party reviews are what influence shoppers. WHAT INFLUENCES ARAB SHOPPERS BEST DEALS PRODUCT REVIEW FRIENDS RECOMMENDATION HOWSHOPPERSAREINFLUENCED 55% 39% 31% 13% 13% 17% 1% ADVERTISMENTS TV ADS GOOGLE ADS FACEBOOK ADS OTHER CHANNELS EMAIL SUBSCRIPTION 14% PAST EXPERIENCE WITH THE SAME WEBSITE 41%

98. For many shoppers, the offline experience keeps them from exploring online shopping options. The ability to touch and interact with the product before buying remains an important aspect of the shopping experience for many shoppers. Though it’s difficult to replicate product interactions in the online space, providing better return policies and more on site discounts can easily be translated to an ecommerce platform. PREFER TO TOUCH THE PRODUCT BETTER RETURN POLICIES 55% 36% OTHERSNO SHIPPING FRUSTRATION 30% 2% IN-STORE DISCOUNTS 29% NO PRODUCT DISAPPOINTMENT 45% INSTANT GRATIFICATION 32% QUALITY TIME WITH FAMILY & FRIENDS 27% Reviews play an important role in the online shopping experience globally and this trend is also apparent in the Arab world. With 9 out of 10 people checking reviews before making an online purchase, they have the potential to make or break a sale. While over 90% of individuals rely on reviews to aid in their decisions, only 60% regularly give feedback after a purchase. This leaves 60% of consumers informing 90% of future shoppers. REVIEWS MATTERTO ONLINE SHOPPERS 9/10PEOPLE CHECK REVIEWS BEFORE ONLINE PURCHASE LEARNING FROM OFFLINE SHOPPING BEHAVIOUR 91#stateofpayments

99. PAYMENT, SECURITY& PRIVACY Cash on Delivery continues to be the most popular payment option in the region with 50% of shopper preferring this method of payment. This preference is most prevalent in Egypt where 70% of the shopping population prefers Cash on Delivery. The more ecommerce friendly credit card method is beginning to close the gap, with the UAE seeing 1/3 of shoppers selecting credit card as their preferred payment method. With credit card penetration growing year on year cash on delivery will begin to fade. Cash still dominates offline shopping however with 80% of offline shoppers preferring to pay with cash at brick and mortar locations. This trend is most prominenet in Egypt where 91% of offline transactions are settled with cash. HOW DO ARAB SHOPPERS WANTTO PAY WHAT INFLUENCES ARAB SHOPPERS CASH ON DELIVERY CREDIT CARD PREPAID CASH CARDS DEBIT CARD NET BANKING CREDIT CARD INSTALMENTS PLAN OTHER 51% 26% 8% 6% 5% 3% 1% PROCEED TO CHECKOUT 91% OF EGYPT SHOPPERS SELECT CASH 33% OF UAE SHOPPERS SELECT CREDIT CARD

100. Privacy and security remain major concerns for shoppers across the region. While there have been dramatic improvements over the last ﬁve years, conﬁdence in online shopping is still lower than in more mature markets. SECURITY& PRIVACY HOW CONFIDENT ARE YOU THAT YOUR PERSONAL INFORMATION IS KEPT CONFIDENTIAL 36% 24% 22% 11% 7% QUITE CONFIDENT MODERATELY CONFIDENT EXTREMELY CONFIDENT SLIGHTLY CONFIDENT NOT AT ALL CONFIDENT HOW CONFIDENT ARE YOU THAT YOUR PAYMENT INFORMATION IS SECURE 35% 23% 22% 12% 9% QUITE CONFIDENT MODERATELY CONFIDENT EXTREMELY CONFIDENT SLIGHTLY CONFIDENT NOT AT ALL CONFIDENT HOW OFTEN DO PRIVACY CONCERNS PREVENT A PURCHASE 29% 29% 16% 14% 12% MOST OF THE TIME ABOUT HALF THE TIME ONCE IN A WHILE ALWAYS NEVER

101. Those shoppers that remain offline cite not having a credit card and a lack of trust in the payment systems as their main reasons for not embracing online shopping. In Egypt for example low credit card penetration continues to disrupt ecommerce with 39% of the population remaining offline due to a lack of credit card. The Kuwaiti population exempliﬁes online payment trust issues with 56% of shopper claiming they do not trust online payments. For businesses, communicating security features and educating consumers remains critical to the success of ecommerce in the region. At the same time banks need to ﬁnd solutions that enable more consumers to participate in the digital marketplace. As these two critical issues are addressed a greater shift to ecommerce will be seen across the region. HOWTO BRINGTHE REMAINING ARAB SHOPPER ONLINE WHAT DO YOU THINK ABOUT THE 3D SECURE SYSTEM? 3D Secure is an internationally recognised security standard for online credit card payments which has recently made its way to the region; It adds an additional security layer for online credit and debit card transactions and aims to prevent online fraud. Though still new to the region the security feature is resonating well with the population. It is proving most popular in the UAE, KSA and Kuwait where well over 50% of shopper say it makes them feel more secure. Egypt is still catching up however with only 43% of the population feeling more secure and 36% concerned about entering banking details on a 3rd party site. HOW DOES 3D SECURE IMPACT SHOPPER CONFIDENCE? I LIKE BECAUSE MORE SECURE HATE FORGETTABLE MORE PASSWORDS 52% 29% 19% 50% UAE, KSA & KUWAIT SHOPPERS FEEL SECURE USING 3D SECURE LOCAL ONLINE SERVICES ARE NOT GOOD 11% OTHERS 10% DON’T TRUST ONLINE PAYMENTS 44% DON’T HAVE CREDIT CARDS 35% WHY DON’T YOU SHOP ONLINE DONT TRUST 3RD PARTY SERVICES 92#stateofpayments

102. Overcoming E-Commerce Challenges in the Middle East

103. FAILURE FROM 3D SECURE In the ongoing fight to prevent fraud, credit card companies and banks are working with online retailers to implement 3D secure technologies – namely Verified by Visa and MasterCard Secure Code. 3D Secure offers an extra layer of protection for both cardholders and merchants. It works byrequiring customers to enteran additional password aftercheckout completion to “verify” that they are the cardholder. CHALLENGE Even with the extra security benefits, 3D Secure has seen mixed responses from retailers. Adding an additional step to what is for many already a complicated process means online businesses are being forced to make a tough decision; adopt 3D secure technology and risk abandoned sales or avoid the technology and take responsibility for fraudulent transactions. So how can you determine if it’s right for your business and how can you minimize the impact 3D Secure has on your conversion rate? 94 #stateofpayments If you are startups or any business that don't have resources, you could go for 3D Secure option, you could tie up with 3rd party who helps you monitor transaction that's one of the possible solution, if you are a big merchant you can definitely hire your own team, integrate with a PSP who helps you monitor you transaction, you can connect with specialized 3rd party solution provides you a tool to help you in your risk management to save your conversion rate and don't forget 3D secure is not your only protection against fraud. MAARID FAZILI - Risk Manager / PAYFORT http://stateofpayments.com/sop16_vp/maarid_video.html http://stateofpayments.com/sop16_vp/maarid_video.html

104. FAILURE FROM 3D SECURE POSSIBLE SOLUTIONS It’s important to rememberthat your business’s particular situation will vary according to a unique mix of industry, markets, preferred card types, customer payment preferences, mobile/desktop experience, and many more. To remain competitive while implementing 3D secure technology we encourage merchants to consider a dynamic approach, which includes the following points: Take the time to customize your strategy: The first and most important step to effectively implementing 3D secure is to customize which transaction types should be routed through the technology. Take some time to think about what transactions pose the highest risk for your business and consider implementing 3D Secure as an extra security layer just for those specific purchases. Make sure you educate your shoppers: As we discussed above, one of the main reasons 3D Secure has a high rate of abandonment is that shoppers are unaware of the process and become concerned it is a security threat. Merchants who work to proactively educate their shoppers about 3D secure and the security benefits it brings are far less likely to experience the drop off. Regularly re-evaluate: As your businesses continues to grow and expand to new markets, you’ll likely need to accept different card types, and roll out new products, what works today may not necessarily be valid tomorrow. This is also true for attempted fraud, as fraudsters constantly change tactics in an attempt to beat the system. PAYFORT INSIGHTS Unfortunately 3D secure has proven to be an obstacle for many merchants across the region. But as difficult as it has been, it is important to recognize the importance security plays in the online marketplace and how neglecting these technologies can lead to larger trust issues in the region. Overall businesses should be prepared to help consumers adapt and work with them to integrate better security options. 95#stateofpayments

105. CREDIT CARD PENETRATION Credit card penetration across the MENA region varies wildly between countries. Some countries such as Kuwait have nearly ubiquitous adoption with 97% of the population claiming to have access to a credit card while others, such as Egypt, see credit card penetration levels in the single digits. Other countries across the region see varying levels of adoption; the UAE has card penetration of 89%, KSA and Qatar ~45%, while Lebanon falls towards the lower end with 15%. CHALLENGE With all that said, on average the MENA region remains behind many areas of the world of the in terms of credit card usage. As a large percentage of adults across the Middle East still do not utilize a bank account, online retailers in the region are often forced to accept cash payments for online transactions. This brings a range of challenges for merchants such as: Unexpected Returns – These comes as a loss for merchants when customers change their mind between the time of purchase and the time of delivery. Fear of Theft – The agents responsible for delivery a required to handle large amounts of cash making them targets for potential thefts. Slow Payments – COD payments take substantially more time to reach a company’s bank account, particularly if you are using third party services for collection. Though for many businesses, credit card penetration isn’t something that they can address directly, there are opportunities for improving the landscape. 96 #stateofpayments For us we saw opportunity in the restrictions to allow people to pay the way they want to pay and just cater to local, Arabian or emerging market mentality. FOUAD JERYES - Co-Founder / CASH Basha One of challenges is to convert the local payments methods such as: Fawry in Egypt, Sadad in Saudi Arabia, KNet in Kuwait and others in all the Arab world to the online world. AHMED ORABY - Ecommerce Manager / Nile Air http://stateofpayments.com/sop16_vp/fouad_video.html http://stateofpayments.com/sop16_vp/fouad_video.html http://stateofpayments.com/sop16_vp/ahmed_video.html http://stateofpayments.com/sop16_vp/ahmed_video.html

106. CREDIT CARD PENETRATION SOLUTION For businesses, working with banks to encourage a wider range of credit card solutions is a strong first step. It is important that businesses communicate demand and offer their insight into was modern consumer need to access the online market place. Finally, educating consumers on credit card payments and lobbying payment gateways to innovate on their behalf should be a top priority of all ecommerce businesses. In the meantime ecommerce businesses need to work hard to understand what solutions which are preferred locally. Credit cards may not be popular but e-commerce businesses are already making significant headway in introducing alternative payment solutions to the region. PAYFORT INSIGHT The Middle East is still finding its comfort level for digital forms of payment. With a large portion of the population still without bank accounts it is likely that a portion of the population will remain inaccessible for some time. At the same time, it is interesting to see that while some resist digital, another portion of the Arab World is very eager to embrace it. As result businesses will need a diverse range of payment products if theywant to tap the full potential of the Arab market. As merchants grow they should constantly be identifying gaps in their payment services and working with gateways to find the best solutions for customers and online businesses alike. 97#stateofpayments

107. FRAUD AND RISK TOLERANCE As consumers continue to demand simpler solutions and push towards ‘ease of use’, security is becoming a more difficult challenge for big and small businesses alike.Today’s consumers are placing more value on speed and convenience, leading to a ‘convenience culture’ that is driving the cashless revolution. Whether it’s using contactless cards to payfora coffee, ora one-click purchase on Amazon, quick and easy is winning the war over secure. CHALLENGE Unfortunately, as the new convenient technologies become widely accepted, risks to both businesses and consumers grow in parallel. In the case of ecommerce and online payments, the risks have materialized primarily in the form of identity theft and fraud. Fighting fraud and safeguarding transactions remains a mineﬁeld, with each payment type bringing its own risks. Whether the transaction is made using the well-established credit card or more novel technologies like the virtual wallet, security remains a constant concern. What can you do to safe guard your business and how can you minimize daily risks of accepting online payments? 1000100001 98 #stateofpayments ATISH THAPA - Business Head OTA / Musaﬁr If I really had to choose to pick a problem so Fraud and Risk would be the biggest challenge that I see right now in regards of online payments specially where 3D secure system is not in place but I could see lot of banks now opting for OTP which is one-time password generation. MOHAMMAD AL-ANSARI - VP / Flyin The most challenge in my opinion the acceptance ratio where the issuers sometimes reject the cards without a clear reason and all that affect the acceptance ratio. If you have a potential with a good revenue weekly so I could say that 65% of it roughly might be rejected sometimes for no clear reasons or sometimes less awareness from clients... http://stateofpayments.com/sop16_vp/atish_video.html http://stateofpayments.com/sop16_vp/atish_video.html http://stateofpayments.com/sop16_vp/mohammed_video.html http://stateofpayments.com/sop16_vp/mohammed_video.html

108. FRAUD AND RISK TOLERANCE POSSIBLE SOLUTION The steps you need to take to safeguard your business will depend on a range of factors including the products you provide, frequency of transactions, and whether you deal in the B2B or B2C space. While you will need to constantly monitor and re-evaluate your risk management procedures to stay safe; implementing the below strategies will give you a strong foundation to build off of. Educate and train your staff on e-commerce risk: As we mentioned above, the amount of risk your business faces will depend largely on internal practices as well as the fraud detection and preventiontools you use. It is importantthat everyone in yourorganization understands that online transactions can pose a risk to your business and that they are trained to follow established risk management procedures. Focus on risk reduction: A well designed sales order process is an essential tool to help you address a wide range of risk concerns. Make sure you clearly label all required fields in your online payment acceptance form and verify all cardholder information that you receive from your customers over the internet. Develop internal fraud prevention structure: For many businesses in ecommerce, the success and profitability of your organization depends on your internal fraud management strategies. Developing a strong risk management structure, that incorporates transaction controls and fraud prevention tools, will greatly reduce fraud-related losses. Ensure PCI compliance: The Payment Card Industry(PCI) Data SecurityStandards (DSS) provide standard procedures and tools to help ecommerce businesses protect sensitive account information. To comply, you will need reliable encryption capabilities for data transmission and if you are storing cardholderinformation, effective internal controls. Be sure to check the DSS regularly and review your own security measures frequently. PAYFORT INSIGHT The move towards more streamlined shopping experiences has put a lot of pressure on merchants. Today’s consumer expects a faster and easier checkout while simultaneously enjoying more security. With such a focus on speed and convenience, it is difficult for merchants to meet the needs of shoppers without making some compromises. Businesses that can afford the investment to develop secure databases will likely stand to benefit from features like ‘One Click Checkout’ and detailed user profiles. Those that can’t must be careful not to sacrifice security in the interest of convenience. Establishing trust toward ecommerce and digital should be a priority for all merchants in the region. 1000100001 99#stateofpayments

109. MOBILE PAYMENT Over the past 5 years, the proliferation of mobile devices, particularly smartphones and tablets, has transformed the way people interact with the internet. Through streamlined mobile websites and dedicated applications, consumers have more control than ever over how they shop. Now this rapidly growing technology is poised to dramatically change the payment ecosystem, bringing new players such as mobile operators and handset manufacturers into the mix. CHALLENGE While mobile payments bring a lot of exciting opportunity for consumers, this fledging payment method is causing mixed responses amongst businesses. Difficult challenges such as perceived security threats, cross platform support, and slow user adoption make it difficult to justify the investment. Unfortunately failure to adopt is not an option and ignoring new payment methods can quickly put companies at a competitive disadvantage. As we’ve seen with many modern technologies, the landscape often shifts rapidly and with little warning. To stay ahead businesses need to be prepared for quick changes and remain aware of how mobile payment technology is evolving. 100 #stateofpayments ANKIT SHUKLA - Relationship Manager / PAYFORT ATISH THAPA - Business Head OTA / Musafir Mobile penetration has grown up in the middle east thanks to the compatibility & users of the smart phones as well as the credit card penetration which is really high and that’s for simple reasons: Confidence Increased, More Responsive & a lot of choices given to customers. In my opinion and based on my experience with Merchants that Mobile payments are the biggest advantage plus the biggest challenge in the ecommerce industry and there are 3 main challenges for mobile payments which are: Security, Awareness and cross border payments. http://stateofpayments.com/sop16_vp/atish_video.html http://stateofpayments.com/sop16_vp/atish_video.html http://stateofpayments.com/sop16_vp/ankit_video.html http://stateofpayments.com/sop16_vp/ankit_video.html

State of Payments 2016

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State of Payments 2016