Billions in the wallet: Egypt’s digital payment boom shows no sign of slowing

Until 2017, electronic payments were a largely untapped sector for investment. Back then, only 32 companies offered e-payment and other financial services. Since then, the field has grown more than fivefold, bringing the number to 177 companies, while investment opportunities continue to grow.

Although digital money transfer and payment services have become commonplace for about half of all Egyptians, according to data from the Central Bank of Egypt and market research organizations monitoring the sector, experts anticipate that even more citizens will join the digital finance sphere in coming years.

COVID-19: A turning point

Egypt now has around 50 million active mobile wallets, enabling users to conduct a wide range of financial transactions without touching cash. This marks a significant shift in how Egyptians manage their finances. Significantly, this shift is happening at pace. Just a few years ago, in 2019, the number of wallet users stood at only 15.2 million.

Last year alone saw a dramatic increase in the value of mobile wallet transactions, Tasneem Sherif, a financial analyst specializing in electronic payments at Arabeya Online Brokerage, told Al Manassa. “Total transactions leapt by 108% compared to the previous year, reaching around 2.7 trillion Egyptian pounds (approximately $53bn),” she said.

Several factors have contributed to nearly 50% of the population becoming comfortable with digital transactions. Among them is the widespread use of mobile phones—the 112 million registered SIM cards as of last January now outnumber the population.

According to Ahmed Abdel Nabi, head of research at Mubasher Financial Services, high population growth has also played a key role, especially as younger generations embrace this technology.

It’s not just citizen choice driving this trend. Since 2019, the government has implemented legal requirements mandating electronic payments. A law was passed requiring government agencies to collect service fees digitally. It also stipulates that large financial transactions, such as tax payments and insurance premiums, must be made electronically if they exceed a certain threshold.

The law came into effect around the same time COVID-19 lockdown forced millions of Egyptians to stay home for extended periods. According to a report by Sigma Capital, reviewed by Al Manassa, the pandemic served as a true catalyst for the adoption of cashless transactions. Lockdown compelled millions to rely on apps to meet basic needs, and they’ve continued to use them ever since.

Consumer needs = billions in revenue

When you transfer money using a digital platform, the payment company deducts a small fee, typically 1–3%, according to Sherif. That modest fee turns into billions in revenue as transaction volumes grow.

Financial disclosures from publicly listed e-payment companies on the Egyptian Exchange illustrate the potential. Fawry’s 2024 financial results, released in March, reported revenues of 5.5bn pounds (about $108m). Meanwhile, eFinance posted revenues of 5.2bn pounds (around $102m), according to its February release.

These two companies are among Egypt’s first-generation fintech firms. Founded in 2005, eFinance includes the National Investment Bank among its stakeholders (holding a 21.8% stake). Fawry followed in 2008 and has Alpha Oryx of the UAE as its largest shareholder (owning 12.2%).

The sector in Egypt now includes many other players, some of which have earned spots on Forbes’ list of the Middle East’s top 50 fintech companies—like Aman, a subsidiary of Raya Holding, founded in 2016.

Revenue growth is also driven by diversification beyond basic payments. Fawry, for instance, now offers banking services that account for 42% of its total income.

Still, digital payments remain the industry’s strongest performer. A Central Bank report shows that payments and transfers make up 36% of all electronic financial transactions, commonly referred to as fintech.

“eFinance has recorded a 40% compound annual growth rate since 2019, while Fawry’s stands at 44% over the same period,” Sherif said.

Despite the rapid expansion of digital payments, analysts argue the market is far from saturated. Sherif projects strong revenue growth for both companies, estimating eFinance will reach 14bn pounds ($274m) and Fawry 15.1bn pounds ($296m) by 2027.

Barriers to growth

While experts remain optimistic about the digital payments sector as a whole, and eFinance and Fawry in particular, several obstacles remain.

One of the main challenges is expansion to rural areas. Many villages lack reliable internet access, which limits growth outside urban centers, according to the Sigma report.

“Fintech companies and payment service providers are heavily concentrated in Cairo and Giza,” Sherif said. “About 67% of company headquarters are located in Cairo, 30% in Giza, and only 3% are spread across the rest of the country.”

eFinance is banking on its monopoly over government services as a growth opportunity. The company has enthusiastically highlighted government plans to collect 1.8 trillion pounds ($35bn) in taxes by 2025. However, the Sigma report warns that if government transactions represent the bulk of eFinance’s income, its growth will depend heavily on the state’s ability to collect those revenues.

Fawry, meanwhile, is facing rising operational costs, such as retailer commissions and cash collection expenses. Abdel Nabi believes that expanding into international markets could help offset these domestic costs.

“Fawry is well-positioned to compete in the Saudi market, thanks to the kingdom’s rapid tech advancements and government digital transformation,” he said. “This could help cover a significant portion of the company’s operating expenses in Egypt.”

Yet the biggest challenge for these companies remains persuading more Egyptians to digitize their finances—particularly small, informal transactions that often occur outside the state’s oversight.

Sherif predicts that by the end of this decade, digital payments could become a cornerstone of Egypt’s economy, with their total value reaching the equivalent of $104.2bn.