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Coronavirus: Bahrain sees fintech take-up surge amid Covid-19 crisis
Covid-19 has spurred the use of financial technology in Bahrain, which could boost the industry in the country and wider Gulf region
Bahrain’s mobile payment app has seen a huge surge in take-up during the Covid-19 coronavirus pandemic as the country’s population is driven to digital payments.
Restrictions introduced to try to reduce the global health crisis are bringing financial technology (fintech) and other digital technologies to the fore as consumers change their day-to-day behaviour and businesses alter how they operate.
For example, use of BenefitPay, the island nation’s national smartphone payments app, has surged by over 1,000% during the pandemic. Today, there are over 444,000 registered users, which is about 28% of Bahrain’s population.
Dalal Buhejji, senior manager for financial services at the Bahrain Economic Development Board, said Bahrain has not had a strict lockdown, but has put in restrictions such as social distancing and encouraging people to work from home.
She said the minimum value needed to make a transaction on BenefitPay had been reduced to encourage its use during the pandemic. “In the past, it was more of a luxury to use digital banking, but now that Covid-19 is here, people feel they have to interact online and we have seen an uptake in digital payments,” said Buhejji.
“Fintech is great, but it is only successful if people use it, and it has always been a struggle globally to get consumers to try the technology. The Covid-19 situation has accelerated take-up,” added Buhejji.
Dalal Buhejji, Bahrain Economic Development Board
Major events bring with them changes in consumer behaviour. For example, had it not been for the global financial crisis of 2008, many of today’s fintechs might not be around. It was a combination of traditional banks cutting back their services and consumers looking for alternatives that built an audience for fintech.
Covid-19 will have a similar effect on the take-up of digital technologies across the world, including fintech. Daniel Dawson, head of card research at RBR at consulting firm RBR, said the pandemic and the social distancing rules brought in to limit its spread had “shone a spotlight” on the benefits of contactless payments.
“This will only accelerate growth in contactless as consumer preference for more convenient payments persists long after the crisis subsides,” he added.
The Bahrain Economic Development Board is currently attempting to increase fintech development in the country and attract international fintechs to its shores.
Buhejji said the Covid-19 pandemic could spur an increase in fintech use in Bahrain and the wider Gulf region. In its efforts to make Bahrain a regional fintech hub in the Gulf region, the state’s central bank introduced a regulatory sandbox, in 2017, which provides a testbed for fintech startups.
The central bank is offering international fintechs a gateway into the Gulf Cooperation Council (GCC) block of countries.
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