Adoption of a broader range of digital payment methods is accelerating in Morocco and the technology fuelling the future of payments is already here. This is according to Mastercard’s New Payments Index 2022.
In addition to being aware of solutions like digital cards, biometric payments, BNPL (Buy Now Pay Later), and open banking, consumers in Morocco are increasingly and actively using these solutions in their everyday lives.
Mastercard’s New Payments Index 2022 found that 75% of people in Morocco have used at least one emerging payment method in the last year. They include 24% who have used a digital money transfer app, 20% who have used a tappable smartphone mobile wallet and 10% who have used a BNPL installment plan.
Consumers are also making purchases in increasingly diverse ways, for example through voice assistant and through social media apps.
Usage of digital payments increasing, use of cash declining
While traditional payment methods still have traction, one in ten (11%) consumers in Morocco indicated they used less cash in the past year. By contrast, over half (53%) of Morocco consumers increased their use of at least one digital payment method in the last year, including digital cards, SMS payments, digital money transfer apps and instant payment services. These behaviours are expected to continue, with comfort and security key to growing adoption.
The Index confirmed security is top of mind when deciding what payment methods to use, globally and in Morocco (46%). In the country, security is followed by considerations for ease of use and rewards. Highlighting sustainability as a key driver in the region, 30% of Morocco consumers said they also consider social and environmental benefits.
“As Moroccan consumers become more aware of the benefits, speed and convenience of new technologies, we’re also seeing wider adoption of new digital payment methods. Mastercard’s New Payments Index keeps a finger on the pulse of how consumer confidence is growing within the secure digital economy, and as Morocco’s cashless economy grows, so too will prosperity for its people, businesses and whole ecosystem,” said Mohamed Benomar, Country General Manager, MENA West, Mastercard.
The Mastercard New Payments Index 2022 further shows:
High awareness of Buy Now, Pay Later (BNPL) Installments as a budgeting tool
The majority of consumers in Morocco have heard of BNPL with 74% saying they are familiar with the concept, and over a third (39%) are already comfortable using it today. Consumers want the flexibility and convenience of BNPL, but with the sense of security associated with a trusted provider like a bank or payment network.
Those that have used BNPL find it useful for emergency and big-ticket purchases, as well as increased purchasing power. Consumers also find BNPL useful for unique use cases, including as a budgeting and financial planning tool.
Receptiveness to more direct Account-to-Account (A2A) payments
The majority of consumers are seeking greater agility to optimize bill payments, prioritizing control, flexibility, convenience, and integrated payment technologies. Most consumers are open to direct account-to-account payment options, by linking their account to a merchant site for future purchases. 76% of Morocco consumers using account-to-account payments, have maintained or increased their usage in the last year.
Two thirds (64%) of consumers agree they are interested in a bill payment option that allows them to change the date they pay their monthly bills, mostly due to an irregular income. Bill payment options that allow them to pay over a period using a buy now, pay later solution (61%) was also of interest, as well as automatic payments for their household bills (61%).
Consumers turning to fintech, and indirectly open banking, to accomplish everyday finance needs
Consumers are relying on digital finance options for their everyday financial tasks, with the benefits of open banking like speed, convenience, and transparency. About two thirds (66%) know about open banking, and are using it to pay their bills, do their banking, secure or refinance loans, and make BNPL payments.
Over half (51%) of consumers in Morocco feel safe using apps to send money to people or businesses from their phone.
Biometrics offer convenience and security at checkout, though data access concerns remain
Consumers recognize the convenience that biometrics can offer, with over half (53%) agreeing it is easier to make payments using biometrics than a card or device. The potential for security optimization is also evident to consumers, with over half agreeing biometrics tech for payments is more secure than two factor authentication.
While consumers do have some concerns about what entities have access to their biometric data, they are still open to using it given the time it saves, and over half (52%) have used biometrics for at least one purchase in the last year. Three in four (75%) consumers have used or plan to use their fingerprint to make a payment, which was followed by other biometric methods like facial recognition, palm or hand, retina scans.
Emerging payments have strongest traction among more digitally native generations
Younger generations have gone more digital in their purchasing and payments behavior, and their engagement in and usage of emerging digital payments engagement is accelerating at a faster rate than older audiences. While security and data privacy remain a concern for them, it is less heightened than for older audiences, and they are more likely to perceive digital tools as secure.
In Morocco, Gen Z is less likely than Millennials or Gen X to use cash or make in-person purchases and payments. They are proactively seeking out new payment methods, and around a third of Gen Z and Millennials are likely to have obtained a new digital payment alternative (e.g. digital wallet, click-to-pay account).