Report on the Advancement of Digital Payments in Egypt and Alignment with Sustainable Development Goals

A new report, ‘Value of Acceptance: Understanding the Digital Payment Landscape in Egypt,’ reveals significant growth in the nation’s digital payment ecosystem, particularly among Small and Medium-sized Businesses (SMEs). This transformation is a critical driver for achieving several United Nations Sustainable Development Goals (SDGs), fostering inclusive economic growth, building resilient infrastructure, and promoting strong partnerships.

Key Findings on Digital Payment Adoption Among Egyptian SMEs

Accelerated Growth and Merchant Interest

• Over half (53%) of surveyed merchants have implemented digital payment systems within the last two years, indicating an accelerated adoption trend.
• A significant 55% of merchants who currently operate on a cash-only basis have expressed interest in adopting digital payment technology.
• Over three-fourths (77%) of all surveyed SMEs believe that digital payment technologies will be a primary engine for their future business growth.
• More than half (55%) of Egypt’s cash-only merchants intend to acquire Point of Sale (POS) systems.

Business Impacts and Satisfaction

• Over 80% of merchants currently utilizing digital payments report satisfaction with the card acceptance process.
• More than 75% of these merchants have observed a positive impact on their business revenue.
• Over two-thirds of the same group report an increase in customer footfall since adopting digital payments.

E-commerce as a Catalyst

Egypt’s thriving e-commerce market is a major factor fueling investment in digital payment infrastructure.

• A majority of surveyed merchants (59%) have newly embraced online payment systems.
• Over half (53%) now accept payments via social media platforms, reflecting a shift in consumer-business interaction.

Contribution to Sustainable Development Goals (SDGs)

SDG 8: Decent Work and Economic Growth

The expansion of digital payments directly supports SDG 8 by empowering the SME sector, which is a cornerstone of Egypt’s economy. This is achieved through:

• Enhancing revenue, operational efficiency, and business sustainability for SMEs.
• Facilitating the integration of thousands of small businesses into the formal economy, which improves access to funding, legal protections, and tax incentives, thereby promoting decent work.
• Driving the growth of SMEs, which is a primary mechanism for job creation and sustained economic growth.

SDG 9: Industry, Innovation, and Infrastructure

The shift towards digital transactions is building a resilient and innovative financial infrastructure, a key target of SDG 9. This includes:

• The widespread adoption of modern financial technologies such as POS systems and secure payment gateways like CyberSource.
• The introduction of innovative and accessible solutions like ‘Tap to Phone,’ which lowers the barrier to entry for even the smallest merchants.
• The development of a comprehensive, end-to-end payment ecosystem that strengthens the foundation for a robust digital economy.

SDG 10: Reduced Inequalities

By promoting financial inclusion, the digital payment revolution helps reduce inequalities within the country. Digital solutions provide small and micro-enterprises, often operated by underserved populations, with access to the formal financial system. This empowerment enables broader participation in the economy, enhancing their ability to operate, sustain, and grow their businesses, thereby reducing economic disparities.

SDG 17: Partnerships for the Goals

The progress in Egypt’s digital payment landscape exemplifies the power of multi-stakeholder partnerships, central to SDG 17. The collaboration between Visa, a private sector leader, and the Micro, Small and Medium Enterprises Development Agency (MSMEDA), a government entity, is a critical step. This partnership leverages combined expertise to provide SMEs with training, technology, and support, aligning with national digital transformation goals and accelerating progress toward sustainable development.

Strategic Requirements and Future Outlook

Addressing the Needs of SMEs

To continue this positive momentum, the ecosystem must address the specific needs of SMEs. Key requirements include:

1. Value-Added Services: SMEs are seeking integrated solutions that go beyond basic transactions, such as loyalty programs, enhanced security, and access to data-driven insights to boost operational efficiency.
2. Simplified Solutions: For cash-only businesses, there is a demand for simple, user-friendly digital solutions that maintain the ease of cash, supported by educational programs to address misconceptions.
3. Incentives and Support: Targeted incentives and comprehensive support, including training in digital marketing and financial management, are necessary to facilitate the transition to digital payments and formalization.

Commitment to a Digitally Inclusive Economy

Both public and private sector leaders have affirmed their commitment to this transformation. Visa aims to support the entire ecosystem, from individuals to businesses, to unlock the full potential of digital payments. MSMEDA is focused on empowering entrepreneurs through training and technology, helping them join the formal sector and benefit from national development laws. This collaborative approach ensures that the growth of digital commerce is inclusive and contributes to a stronger, more resilient Egyptian economy.

1. Which SDGs are addressed or connected to the issues highlighted in the article?

SDG 8: Decent Work and Economic Growth

• The article focuses on the growth of small and medium-sized businesses (SMEs) in Egypt, which are described as “one of the main pillars of economic growth.” The adoption of digital payments is directly linked to positive impacts on revenue and business growth, contributing to overall economic development. The partnership with the Micro, Small and Medium Enterprise Development Agency (MSMEDA) aims to empower this sector, supporting productive activities and entrepreneurship.

SDG 9: Industry, Innovation and Infrastructure

• The core topic is the adoption of digital payment technology, which is a key component of modern financial infrastructure. The article discusses the development of a “comprehensive end-to-end payment ecosystem” and the introduction of innovative solutions like “Tap to Phone,” secure payment gateways, and integrated services. This push for digital transformation and reliance on “modern technology” directly aligns with fostering innovation and upgrading infrastructure.

SDG 17: Partnerships for the Goals

• The article explicitly highlights the collaboration between Visa, a private sector entity, and the Micro, Small and Medium Enterprises Development Agency (MSMEDA), a public government agency. This public-private partnership is presented as a crucial element in achieving the goals of digital transformation and financial inclusion for SMEs. Bassel Rahmy, CEO of MSMEDA, states that this collaboration “represents a strong addition to MSMEDA’s efforts to support and empower owners of micro, small and medium enterprises.”

2. What specific targets under those SDGs can be identified based on the article’s content?

SDG 8: Decent Work and Economic Growth

1. Target 8.3: “Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services.” The article is a case study for this target, detailing how access to digital payments (a financial service) helps SMEs grow, enhances operational efficiency, and helps “thousands of these projects join the formal sector.”
2. Target 8.10: “Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all.” The initiative described in the article, led by Visa in partnership with a government agency, aims to expand access to digital financial services for a previously underserved segment (cash-only SMEs), thereby strengthening the overall financial ecosystem.

SDG 9: Industry, Innovation and Infrastructure

1. Target 9.3: “Increase the access of small-scale industrial and other enterprises… to financial services, including affordable credit, and their integration into value chains and markets.” The article discusses providing SMEs with access to digital payment solutions, lending solutions for “crucial capital,” and integrating them into the “digital economy” and “digital commerce landscape.”
2. Target 9.c: “Significantly increase access to information and communications technology (ICT) and strive to provide universal and affordable access…” The report’s findings on the accelerated adoption of digital payments, the interest from cash-only merchants, and the rollout of user-friendly solutions like “Tap to Phone” all point to an increase in access to and use of ICT for commerce.

SDG 17: Partnerships for the Goals

1. Target 17.17: “Encourage and promote effective public, public-private and civil society partnerships…” The article is centered around the partnership between Visa (private) and MSMEDA (public) to achieve shared objectives of economic growth and digital transformation. The collaboration is described as a “necessary step toward empowering this vital sector.”

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3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Target 8.3 & 9.3: Formalization and Growth of SMEs through Access to Financial Services

• Proportion of businesses adopting digital payments: “Over half (53%) of merchants surveyed have implemented digital payments in the last two years.”
• Demand for digital payment systems among cash-only businesses: “55% of cash-only merchants are interested in adopting the technology,” and “more than half (55%) of Egypt’s cash-only merchants reporting they intend to acquire POS systems.”
• Business performance metrics: “more than three-fourths report a positive impact on revenue, and more than two-thirds report the same for footfall.”
• Business owner sentiment on growth: “over three-fourths of surveyed SMEs (77%) believing digital payment technologies will power business growth.”
• Integration into the formal economy: The article mentions that the initiative “helps thousands of these projects join the formal sector.”

Target 8.10 & 9.c: Access to Financial Services and ICT

• Adoption of e-commerce payment methods: “over half of surveyed merchants newly embracing online payments (59%) and accepting payments via social media (53%).”
• Customer satisfaction with digital services: “over 80% are satisfied with the card acceptance process.”
• Availability of accessible technology: The mention of providing “simple, user-friendly digital solutions” and specific tools like “Tap to Phone” implies an effort to measure and improve the accessibility of technology for small merchants.

Target 17.17: Effective Public-Private Partnerships

• Existence and nature of the partnership: The article itself, detailing the collaboration between Visa and MSMEDA, serves as qualitative evidence. It describes the partnership’s goals, such as providing “comprehensive support to business owners,” facilitating “financial transactions,” and offering “training to help them adopt modern market tools.”

4. Table of SDGs, Targets, and Indicators

Source: ffnews.com