Sunday 15 / December / 2024
Muscat: In a clear sign of shifting financial behaviours, mobile payments in Oman experienced a remarkable rise in 2023, marking a pivotal trend in the country’s move towards digital financial solutions. The surge reflects a broader transformation in the nation’s payment landscape, driven by the Central Bank of Oman’s ongoing efforts to modernise and secure the country’s payment systems.
The impressive growth in mobile payments is part of a larger vision aligned with Oman Vision 2040, positioning the Sultanate as a leader in the region’s digital financial evolution.
The Central Bank of Oman (CBO) has made significant strides in strengthening the national economy by adopting the latest technologies to enhance financial infrastructure.
As part of its commitment to creating a robust and efficient financial ecosystem, the bank has focused on advancing the National Payment System (NPS), which underpins a wide range of transactions across the country, from high-value fund transfers to everyday consumer purchases.
The NPS includes systems such as the Real-Time Gross Settlement (RTGS), Automated Clearing House (ACH), and the Mobile Payments Clearing and Settlement System (MPCSS), all of which play a key role in streamlining the nation’s financial operations.
In 2023, the MPCSS saw an extraordinary surge in mobile transactions, increasing from 4.9 million in 2022 to 40 million by the end of 2023.
This remarkable 700% rise in transaction volume highlights a rapid shift towards mobile payments, reflecting the growing demand for quicker, more secure ways to transfer money.
The value of funds processed through the MPCSS system also experienced a substantial jump, reaching OMR1.44 billion over a two-year period.
This significant growth signals a clear preference for mobile payments, which offer enhanced convenience and security, and are becoming an increasingly popular choice for both consumers and businesses across the country.
Meanwhile, the RTGS system, which handles large-value payments between financial institutions, recorded a 17% increase in transaction value, reaching OMR 209 billion in 2023. Although the number of transactions decreased, this is typical for RTGS, as it primarily handles fewer, higher-value payments. The system’s growth reflects a steady demand for secure, real-time settlement of interbank transactions, reinforcing Oman’s financial stability.
Retail payment systems also saw robust growth, with the total number of transactions increasing by 41%, reaching 395 million in 2023. The value of these retail payments rose by 16%, totaling OMR 31.9 billion in 2023. The surge is indicative of a broader shift towards digital payment methods, with Oman’s residents increasingly opting for electronic transactions for everything from everyday purchases to business dealings.
Card-based transactions
Card-based transactions on the OmanNet network also grew by 30%, reaching 329 million by the end of 2023, with a total value of OMR 6.4 billion. This rise is fueled by the widespread adoption of Point-of-Sale (POS) systems, which have become integral to the country’s retail environment.
The Automated Clearing House (ACH) system, which facilitates recurring payments such as salaries, also saw a notable 18% increase in both transaction volume and value in 2023. By the end of the year, ACH processed 21.9 million transactions worth OMR 13.5 billion, driven by the system’s ability to handle payments around the clock. The growth in ACH transactions underscores the growing reliance on digital systems for efficient, automated financial operations.
On the flip side, traditional payment methods, such as cheques, continue to see a decline in use. The number of cheques processed through the Electronic Cheque Clearing (ECC) system dropped by 1% in 2023 resulting in a total of 3.7 million cheques by the end of 2023. However, the value of cheques processed saw a slight increase, reaching OMR 10 billion, reflecting the ongoing, albeit shrinking, role of cheques in Oman’s financial ecosystem.
Notable increase in WPS
Further reinforcing the shift towards digital payments, the Wages Protection System (WPS) introduced by the Ministry of Labour has been instrumental in increasing salary-related transactions. In 2023, salary transactions grew by 3% in volume, and their total value rose by 4%.
The WPS has ensured the timely and secure transfer of salaries, contributing to greater financial inclusion and the adoption of digital payment solutions by businesses and employees alike.
These developments signal Oman’s growing embrace of digital payment solutions, which are transforming the country’s financial landscape. With mobile payments leading the charge, the Central Bank’s efforts to modernise payment systems and enhance financial infrastructure are playing a critical role in shaping Oman’s economic future.
Decrease in ATM transactions
OmanNet has witnessed significant changes in its electronic payment channels over the past year. Transactions via ATMs decreased by 11% in 2023, compared to a 15% drop in 2022, indicating a shift away from traditional cash-based systems. In contrast, digital payment channels experienced notable growth, with point-of-sale (POS) transactions increasing from 68% in 2022 to 74% in 2023. This surge is likely driven by the expanded utilisation of POS software and the growing acceptance of digital payments.
Meanwhile, e-commerce transactions saw a slight decline, dropping from 17% in 2022 to 15% in 2023. This change reflects evolving consumer preferences, with a growing interest in alternative payment methods.
